The procurement technology platform is rapidly evolving, with new solutions coming up every day. However, the irony is that the fundamentals remain the same: automating the purchase order process to enable informed decision-making and savings.
As more and more options arrive, procurement leaders often get overwhelmed with the choice. The key is to focus on the fundamentals and avoid common mistakes to choose the right platform that meets your strategic objectives. This article discusses some key mistakes to avoid while evaluating procurement technology platforms.
- Not having clear business objectives
The first and most common mistake is not having clearly defined business objectives that the procurement technology platform should achieve. With unclear objectives, the platform choice becomes an ad-hoc decision instead of a strategic one.
Before starting your platform evaluation, clearly define the 3–5 business objectives you want to achieve through the technology intervention. For instance, your objectives could be to reduce Maverick spending by X%, reduce purchase order cycle time from Y days to Z days, get complete visibility into spend under management, etc.
Defining these objectives upfront will help you shortlist platforms that can truly enable these goals and measure success later. A platform looks great on the surface but may not have features to address your specific goals. Spelling out your objectives beforehand eliminates this risk.
- Getting Swept in the Hype
With new solutions launching almost every quarter, it’s easy to get swayed by messages that overpromise capabilities. Every platform vendor claims to be leading innovation in procurement, providing a best-in-class user experience and maximum value.
Don’t just go by the vendor’s hype or their media popularity. Rely more on demos, proof of concepts, and customer references to objectively evaluate if the platform delivers on its promises.
Ask for specific customer case studies and quantify the results delivered by the platform. If the vendor hesitates to provide credible customer evidence, it’s a red flag that their claims may be more hype than reality.
- Not Evaluating the Ease of Adoption
The success of any technology platform relies heavily on user adoption. If the end-users within the organization don’t embrace the platform, it fails to deliver the desired objectives.
Unfortunately, ease of use and user adoption are often an afterthought in the platform evaluation process. The features, integration capabilities, analytics etc. get more attention.
However, for a procurement technology platform to drive the intended productivity improvements, the interface and overall user experience have to be intuitive. It should not have a steep learning curve that requires months of training. Users across your organization should be able to get started instantly.
So do not ignore this critical aspect. Get demos, talk to users of the platform, and ensure its intuitiveness for rapid adoption.
- Customizability vs. Configuration Tradeoff
Procurement leaders get attracted to highly customizable platforms where they can tailor everything from the interface to analytics to their unique needs.
However, this extreme customizability often comes at the cost of higher IT involvement and long implementation timelines. Also, upgrading to new versions requires redoing all of the customizations.
Instead of full customization, look for a platform that gives you ample configuration options to meet your needs while also maintaining upgrade flexibility.
The ideal scenario is having 80% of functionalities covered through configuration alone. Only the remaining 20% of truly unique needs should require customization.
- Integration Hurdles
No procurement technology platform can deliver value in isolation. The platform needs tight integration with your existing systems, like finance ERPs, supplier portals, master data systems, etc.
Many otherwise promising platforms fall short on the integration aspect, as they may not offer required APIs or have rigid data models. This leads to cost and time overruns.
Be very critical when it comes to assessing the integration capabilities. Look for platforms that offer open APIs, have experience working with your key systems, and provide prebuilt adapters for quick connections.
If you ignore integration challenges during platform evaluation, they will come back to bite you during the implementation phase. Do your due diligence here.
- Overlooking data and analytics needs
Data, insights, and analytics are at the heart of driving more informed and faster procurement decisions. Yet many organizations implement procurement technology platforms that do not meet their analytics needs.
It may check features like e-sourcing, contracts, and spend visibility but come up short when it comes to actionable analytics, intelligent alerts, custom reports, self-serve data access, etc.
Clearly define the analytics and data requirements before your platform evaluation and ensure they are met adequately. After all, analytics is the fuel that will drive results from your technology investment.
- Not Prioritizing Security
With procurement platforms handling sensitive data like contracts, suppliers, invoices, etc., security should be non-negotiable.
Unfortunately, security is often not given adequate weight in the platform selection process. This leads to vulnerable systems open to cyber threats and leaks.
Scrutinize the security infrastructure and protocols followed by the shortlisted platforms. Look for features like role-based access control, strong encryption, regular audits, and compliance with security standards.
Do not compromise on security; otherwise, you risk compromising the entire organization through potential breaches on the procurement platform.
- Lack of Scalability
As your procurement needs grow from hundreds to thousands of users across business units and geographies, the platform should be able to scale seamlessly.
Selecting niche platforms that are not built for enterprise-wide scaling will cause headaches later. It may hit performance bottlenecks, be unable to handle increased data loads, and cause system outages.
Evaluate if the platform has the architectural robustness and cloud infrastructure to scale on demand. Just adding more point solutions as needs diversify leads to a fragmented experience.
- Limited supplier management
Best-in-class procurement technology platforms provide capabilities not just for your internal teams but also your suppliers.
Features like supplier portals, catalogue management, auctions, collaboration, and transactions help improve external stakeholder experiences.
Conclusion
Choosing the right procurement technology platform for purchase order process requires a thorough evaluation driven by your unique business objectives and needs. Avoid pitfalls like lack of clear goals, falling for hype, customizability overkill, integration hurdles, and inadequate analytics.
With smart platform selection focused on your key priorities and requirements, you can transform procurement into a strategic business driver. The mistakes outlined above must be avoided to pick and deploy the right solution that delivers maximum ROI.