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What we learned talking with over 400 procurement experts - Part II

Updated: Sep 18, 2022


In Part I we spoke about intake workflows and stakeholder drama. If you didn’t catch Part I you can find that here:





As a refresher, what we found was three-fold:
  1. Users are bypassing procurement due to an overly difficult process they do not see value in.

  2. Companies desperately need an effortless intake process with full visibility for all stakeholders.

  3. Business growth is being limited due to extraordinarily high decision times.


Documents: Did you send that over already?


This is actually two problems: Finding documents in your mailbox is very difficult and emails are lost when an employee leaves the company.


Seems obvious right?

Let's start with finding documents in your mailbox. Universally, we heard this was how the process has been done forever and it’s a major pain but nobody has found a better solution. I'll give an example for clarity.


Procurement is waiting on legal to approve a vendor. They know legal is waiting on final documentation from the vendor, but they have no idea if it’s been received. So the only way procurement will know the status is if legal manually sends an email update to procurement -OR- procurement manually sends an email to legal to ask.


This cumbersome process may have flown back in the 90’s but this is the 21st century.

One Silicon Valley company we spoke with has over 5,000 employees. There are teams of 25 or more people involved in approving every software request. At least half of those people are forced to reach out to each vendor directly and ask for the same exact document answer to a question.


Can you imagine the time wasted with all that back and forth? And the amount of re-work?


But that's not the only document retrieval issue. When an employee leaves the company their emails are typically lost in the nether. And when documents are stored there, I'll bet you can guess what happens. Poof. They’re gone.


Then another request is sent to the vendor for a document request. Manually. Hello more time delays. Goodbye performance bonus for decreasing decision times…


If this wasn't enough to drive procurement crazy, there's more.


 

Communication & Audit Trails: Who approved this anyway?


Listen to this - The procurement leader for a company in Seattle said the hyper-growth they were experiencing was causing extreme communication breakdown between departments when it came to purchase requests. Their language was a bit more colorful but you can imagine their frustration. And this sentiment was echoed at other larger organizations.

With that in mind, here's a riddle: If procurement didn’t approve a tool, how is the employee already using it?

Trick question! Nobody knows!

One issue that cropped up again and again were tools getting introduced to the company without formal approval.

This goes back to our communication troubles, yes, but there's also another culprit…freemium models. AKA the root of all shadow procurement evils and the bane of procurement's existence. (Too much? Didn’t think so)

Ah, the freemium model. Stop me if you've heard this before. An employee wants a new tool. Said employee gets a free version of the new tool. Employee adds users because they love the new tool. The new tool now costs money.


Great.


Procurement now gets brought in WAY after the fact and has to scramble to get the tool approved.


It shouldn’t be like ths.

But when an employee has been using a tool for free and gets upgraded, procurement gets put in a tough spot. Take the tool away and gain the ire of the employee. Or let the tool in, lose negotiation leverage and have potential security and compliance risks.


This was a particularly frustrating (and worrying) experience for the procurement teams we talked to because this put them in a position of policing the process and acting as a blocker. But everyone we spoke with wanted to be seen for what they are; a business partner that helps the company grow. The problem is there’s a large visibility deficit that needs to be addressed to correct this.

Because wouldn't it be nice to be included in the beginning, even if a tool is free? (We’ll talk specifics on this later)

First there’s another issue causing tools to slip through: lack of communication.

Here's a story we heard from a director of procurement at an Austin based company with 2500 employees. They just went public. The director was remembering a situation where an employee told him they were chatting with security and security signed off on a tool the employee wanted. It just so happens security approval was the last piece to the months-long decision process. Procurement hadn't heard back from security but the director knew the employee and took their word on the matter, promptly approving the tool. Except when security found out, they were extremely upset because they hadn’t formally approved the tool yet. They didn’t have their required documents and the company was out of compliance.

Whoops.

Turns out Security told the employee they were going to approve the tool when they got the required documents and the employee “misheard.” Now procurement, who was trying to do the right thing, looks really bad. The company was out of compliance and the employee was about to have a bad day.


And before you say you would never approve a tool without every stakeholder's explicit approval, this is an issue we heard at multiple organizations across all levels of expertise and company size. So as they say, never say never.

If you’re keeping score, both issues boiled down to communication. Employees dodged the process in the freemium model because it was a hassle and they wanted to start using the tool now, not 6 months from now. They didn’t know how procurement worked so they just avoided it altogether. And in the second scenario, procurement didn't verify if security approved because their primary mode of communication was email, not a centralized location.

They needed a better way to communicate and actually have an audit trail of what was approved.

And so we arrive at…


The Solution: About time


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