10 ways to ensure your procurement IT implementation will succeed
Ahead of ProcureTECH 2020, 26-27th February 2020 in Sydney, we share 10 tips to consider for a successful IT implementation - compiled from the expert contributions from last year's ProcureTECH conference in Melbourne by MC of that event, Jonathan Dutton, for FOCUS readers:
1. DATA is key
It doesn’t matter so very much which systems you are using or buying, the most important thing is that you are collecting relevant DATA – however incompletely. The software and AI of the future (even today) can do amazing things with data lakes of poor quality information.
Always collect DATA, don’t discount it, and never throw it out.
2. Meet your business needs first
Make sure your system solution meets the need of your business strategy first, your (real) customers second and your other stakeholders third – not the needs of the system itself (this is how it works), the vendor (this is how we do it) or even your IT department (this is how we want things).
One key question to ask yourself is – am I automating the right professional process here? Is it good enough? Does it meet our true business need right now? Could it in future? Bill Gates explained that IT was “brilliant at amplifying mistakes.” Take the chance to redefine your business process to meet your business needs, then automate that, rather than the process you happen to have today, as a legacy of business history and past needs.
If you are going to automate elements of your procurement process (rather than re-define it first), at least do it with your eyes open and in full knowledge of the imperfect path you are taking.
3. BYO user-interface
Since the 1990s it was IT heresy to even think of building a custom IT solution in-house. The overblown underdelivered IT projects of that decade killed the idea for years. Yet, today, in 2019, building simple portals in the cloud is easy. Tools abound and are relatively easy to use and are often free. Numerous ‘review’ websites guide you through options and choices. Even average IT departments often have capability in-house.
Simple tools (available either commercially or as open-source options) like Microsoft BI, Tableau or even SharePoint, Access or Excel can offer amazing functionality for analysing core data. Linking portals to legacy systems is also easier today with proven APIs, basic middleware and easy-to-build apps – some of which are free.
This approach opens a whole new potential IT strategy for buyers – putting bespoke user-friendly portals, that speak directly to your business and its finer needs, over clunky legacy systems, then filling in missing functionality with basic COTS (commercial off the shelf software) linked to the single sign-on (SSO) portal using the data from your other systems. What could possibly go wrong? Just one thing really …
Customisation. Detailed configuration of off-the-shelf software tailors the system to your needs more closely. Customisation, that is programming changes and bespoke functionality, is usually the road to ruin. Loose specs, miscommunications, scope creep, add-on functionality, new ideas and adjustments are a recipe for disaster – budget blow-outs and endless delays.
Investing in a new portal-based user-interface dashboard to better access & report on the data in your IT infrastructure better is one thing. Writing customised software for major systems is quite another.
4. Invest in your business case
Build your business case for IT investment around solving your identified business problem, or capturing an opportunity to build competitive advantage from the supply side – not to just “improve efficiency” …. as that is never enough to justify wholesale transformational IT projects.
Remember that transformation is a means to an end, not an end in itself: it needs a business case too – a strong one. Aim to try and spend ten hours planning and preparing for every one hour of the actual IT implementation curve.
5. Talk to the vendors
Lazy buyers send out truncated EoIs. These are often just a process to excuse a lack of market knowledge. Good category management or, in some cases, just good basic sourcing work, should tell you enough to long-list a viable pitch-list.
Take the chance to talk to the specialist IT vendors. They are experts in this area. They can tell you what others do, they can help you think through your NEEDS and your WANTS and help you formulate a business case about what will most likely work for you. Use these conversations to compare and contrast. Take the chance to get free expert help from experts in the field.
Go to expos, use the conferences, take up no-obligation free meetings at events like ProcureTECH. Learn and apply. That said, always check the affiliations of your procurement advisors and consultants. Many are being recruited as official or even unofficial re-sellers for procurement software. They should be genuinely agnostic.
6. Put A.I. to work
Artificial intelligence works. It loves dirty data, missing fields, legacy system feeds, data lakes and multiple APIs. And it learns as it goes. Simply, AI can clean dirty data, analyse patterns and extract insights from the data hidden within your portfolio of existing supply side systems to identify new saving opportunities.
A.I. can also add missing data to complete the picture. All accessible through modern, user-friendly and easy-to-use dashboards built on predictive analytics schooled on procurement data. It can also be used to track savings, identify questions of risk, including modern slavery risks, or even to identify then redirect spend to minority suppliers such as indigenous, social enterprise or women-led business enterprises.
A.I. can also:
interrogate data from multiple sources to track compliance of suppliers and contractors
incorporate feeds from external systems or data feeds/inputs from your suppliers.
7. Never launch with a BIG BANG
IT projects, however large or small, very rarely step up to the pressure of “Ta Dah” reveals. BIG BANG implementation projects don’t work in IT. There is simply too much that can go wrong: too many variables and too many detailed individual needs from one system solution. There are too many stakeholders with too many parochial viewpoints taken from 360 degrees around the project.
Take a three-step approach to success:
Build a strong business case, then plan and prepare thoroughly.
Under promise, then over-perform.
Build a phased roll-out, then gradually release new functionality in practical segments.
The idea that procurement transformation demands technological support is often correct. But that doesn’t have to mean a big bang solution. BIG BANGS often mean BIG FAILS.
8. Double your change management budget
In a last-gasp effort to make the square business case fit a round budget hole, many corporate line managers will cut “non-essential” aspects of the new IT project to wiggle through arbitrary budgets. Change management often gets the chop at this stage, along with training, nice-to-have functionality, new releases, maintenance and project management hours.
Change management should not be optional. Change is never easy – certainly not in everyday corporate life. Under-communicating a big project implementation with new technology, change processes and new ways of working can be the biggest contributor to failure. It empowers cultural resistance.
Remember, many IT implementations fail not because anything was wrong the technology, but for cultural reasons. Don’t underestimate the resistance to a new system among end-users.
9. Embrace RPA
Robotic process automation (RPA) is here. Procurement has a myriad of transactional and administrative tasks that are ripe for automation or robotic takeover – pointed out an inconvenient KPMG survey in 2015. A recent Deloitte survey estimated 24/7 robotic costs at 10% of the costs of an Australian based FTE person working just 37.5 hours per week.
Procurement leaders should embrace automation through RPA because typically under-resourced procurement teams have other, more important, strategic work to do that we often have little time for; tasks that computers cannot do well – like strategy, judgment and relationships. Like defining and implementing sustainable procurement plans, agile procurement strategies, procurement capability programmes and procurement technology projects!
We must shed work offering low returns on the investment in us, so we can take on work with high RoI.
10. Dedicate a Project Manager to your implementation
Nothing fails quite so spectacularly as a failed IT project. They can be glorious in their failure. Forrester were quoted as saying 75% of major IT projects in the USA ultimately ‘fail’. One essential ingredient for a successful project is good project management. Bad project management will ensure failure.
We live and work in a complex world. Managing complexity and a arrange of different outcomes for different users’ needs demands good project management. But who is best to be project manager – a procurement person, IT professional or business manager? Never the vendor, though. You have to own the thing.
Now in its seventh year, ProcureTECH is the region’s only event focused on those technologies that enable and assist the procurement function. Learn more: https://pasaprocuretech.com/
Jonathan Dutton FCIPS is a PASA brand ambassador & MC of PASA ProcureTECH