Business & Technology Nexus

Dave Stephens on technology and business trends

Indirect Procurement Risk Factors

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How do you know when your Indirect Procurement implementation & processes have drifted off course? Here are some singals that should be worrying:

  • The volume and or dollar volume of ordering has hit a plateau or is marginally declining & is not close to your overall spend
  • Business groups are being "cut" from your central system and being moved to dedicated systems (i.e. Marketing, Consulting, Research)
  • Employees you talk with are generally unhappy with the system and openly discuss among themselves way to end-around it

So what is the cure? First, don't be quick to blame it on lack of executive support or your lax corporate culture. Even if more executive support would have helped, it won't help you right now. Instead, start with the employees and document their concerns with the Procurement tools you've deployed.

If buying patterns have changed dramatically, discover the trigger. Has your business changed?

If you've simply hit a plateau well below your goal, drill down into the data. Are there additional areas of buying you now need to bring online? Are they somehow intrinsically more difficult to manage? (e.g. variable rate services)

Above all, be realistic of what you expect from the users of your Procurement system. Make sure you understand the process and system deficiencies from their point of view. They won't tolerate a slow, lumbering experience that makes them jump through hoops to do simple tasks like buying. They have bigger things to worry about.

You should also be monitoring utilization by organization and business function. Is usage and compliance high in corporate but low in regional offices? If so, there may be valid barriers to adoption you are not yet aware of.

Usage of procurement systems drives ROI & makes the difference between a so-so project and a success. Consider assigning someone from your team (or yourself) as a "customer relations" person. Have your IT or business analyst liason customize your system and streamline your processes.

And remember, people and culture change is slow work. Don't expect to sprint to success.

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Written by Dave Stephens

05/15/06 7:12 AM at 7:12 am

Posted in Opinion

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