Procurement Technology Success Secrets
By Charles Dominick, SPSM, SPSM2, SPSM3
What Are Procurement Technology Best Practices?
Procurement technology helps accelerate business improvements. Still, many procurement professionals struggle to get a procurement technology initiative started due to senior management reluctance to invest in it.
Senior management may also ask "'What happens if we [implement procurement technology] versus what happens if we don't?'" according to Linda Peyton, Project Manager of eSourcing and Contract Management Systems for Wolters Kluwer. "You have to calculate the value and communicate the benefits."
Being creative when communicating benefits can help. For example, if you estimate your savings attributable to eSourcing to be $1.5 million and your organization has a 10% profit margin, "then you calculate how many additional sales your sales department would have to generate to obtain that $1.5 million [in profit increase] and, I guarantee you, senior management will pay attention," Peyton claims. "If you can equate return on investment and cost savings to stock prices, that's even better."
Because eSourcing can produce a faster, more apparent ROI, it is often the first procurement technology tool implemented. However, that may not always be the most strategic approach.
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