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

Updated: Sep 29, 2023

In Part II we spoke about document woes and communication roadblocks. Now, at long last, the gripping finale is here with Part III.

If you didn’t catch Part II 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.

The Solution: About time

Everything we spoke about has been how procurement handled their process for decades. DECADES!

And to be fair, many smart individuals we interviewed have tried to remedy these issues. Primarily this has been in the form of modifying PO and P2P systems for software purchase requests. But their efforts yielded less than stellar results. Employees still bypassed the system because it was either a time sink, difficult to use or they didn't have access to the PO/P2P system.

And if we’re being honest, not every employee can have access to the legacy PO/P2P’s that are out there. It’s extremely cost prohibitive.

So what's a company to do?

Well, solving the problem isn't easy. But let’s tackle this in steps.


Step 1: Simplify Intake Workflows

Solving the intake workflow issue starts with preventing information overload for employees who make purchase requests. Don’t ask unnecessary questions and don’t ask repeat questions for each department. Ask it once, and only when required.

I can hear Legal (and Infosec) shouting from here but trust me on this one, just because you can ask a question doesn’t mean you should. The goal is to have a process that is used by everyone in the organization. That means they not only need access, but they have to want to use the system in place because it facilitates their request and provides them value, not makes it more difficult.

Bottom line: Avoid question sprawl at all costs.

And this is where market insights become very valuable. The requester should be able to see the main features of the tool they are requesting and who the primary competitors are just by filling out the intake form. That way, if what they need the tool for isnt a main feature or there are competitors they should try first, the intake process isn’t seen as red tape, it’s seen as a guiding hand to expedite approval. This helps the user feel more engaged and more likely to want to use the intake process versus being forced to because, “That’s the policy.”

Once you decide what questions are necessary, make them dynamic. Here’s what I mean. If the purchase price is below $500 and the business unit is within budget, does finance really need to manually approve the request? Or can the finance questions be skipped and the purchase auto approved for FP&A purposes? If so, this reduces the workload and speeds the process along.

But let’s not forget, finance is only one piece of the approval process. While finance may be happy if a tool is within budget, the cheaper or free tools out there generally have a higher chance for security breaches. IT & Security will undoubtedly need to take a closer look. And if you’re using a homegrown form, they don’t have the flexibility to handle a complex process that includes a combination of auto-approvals and traditional questions.

When looking at procurement departments, they should be able to change workflows on their own with no-code functionality and not have to reach out to IT or bring in developers for every change request. In effect, procurement should be empowered to do their job efficiently and be able to focus on higher leverage activities like sourcing and negotiation. Then they can serve as true business partners driving innovation with state of the art solutions.

Here’s a perfect example why no-code workflows are needed. A procurement officer at a fortune 10 company shared with us that he's frustrated with the number of regulations and guidelines he needs to change and follow on a yearly basis. And if he can’t follow the guidelines exactly, there is some (not much) room to show a good faith effort that he tried. As you might expect, changing regulations and guidelines requires frequent modifications to workflows and he can't afford the time it takes to bring in IT. No-code configuration in a centralized location where he can change everything (or only one thing) by himself as the need arises is a perfect fit for his organization.

Lastly, every person involved in purchase requests said, without fail, poor user adoption plagued their intake efforts. They stated usability and user experience were key to getting employees to actually go through a formal approval process, especially for freemium tools.


Step 2: Centralize your Approvals

Rather than back and forth email chains between departments, have a central location where approvals or requests for more information can be seen by everyone, including the employee wanting the tool.

This way, every stakeholder can work in parallel and the business units don't have to email procurement asking what the hold up is. They can see when the company is waiting on vendor documents or teams are negotiating terms of service. What’s more, they can see what the expected ETA is and know how to deploy their resources towards that ETA.


Step 3: Have A Centralized Document Repository

Approval delays come in many forms, including missing documents. If you're in procurement and you are wondering why legal hasn’t approved the tool yet, you shouldn’t have to send them an email.

Have the redlining documents in a document repository. Then you'll know why legal hasn’t approved. They haven't gotten the document yet. While you're at it, have the security certificates in there as well. And the NDA. And everything else…

I'm not sure how we got to a point where all these required documents were stored in email or separate applications but it's time to put them in one location. (Shameless plug, Opstream does this)


Step 4: Centralized Communication

Noticing a trend yet? Everybody needs to work in the same space. Centralize is the name of the game. Employees making purchase requests, Procurement, IT & Security, Legal, Finance, everybody. Even the vendor. (Though the vendor only needs to see pertinent info)

Here's a question, if vendor risk and procurement need the same document, why ask the vendor twice and add time delays? View the document in the document repository & communicate with other departments in a centralized platform.

Because in 3 years when a vendor is up for renewal you'll be thankful you decided to implement a single area for team communication. Or I guess if you really want to desperately search through emails for required documents and comments that could work too…

The days of being forced to relay critical information back and forth through email chains are long behind us, if you want them to be.

But here’s the beauty to all this, teams can implement some or all of these strategies on their own and make a huge impact. And when they do, that gives them time to focus on creating real value with high leverage activities like sourcing and negotiating.

You can do this on your own. But if you need (or want) a solution now instead of building one 12 months from now, give us a shout. Streamlining procurement is what we do.


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