How to Successfully Use Procurement Technology

The use of technology to make decisions that relate to procurement must be complemented with human rationale. It is vital that procurement professionals focus on the process both before and after the award of a contract, and not just on the tendering process. Before IT departments go to the market shopping for procurement technology, they should receive feedback and support from the procurement department in preparing their written requirements. Time and important soft skills need to be invested in this process to guarantee positive results.

Soft Skills & Technology

When mixing procurement technology with soft skills, it is important to get the basics right. This requires:

• A Common Operating Model - While it may seem tedious, moving to a form of automation is really worthwhile. This is because it will prove more cost-effective to run a business with a common operating model, rather than design your technology around different variables. It is important to keep regional differences as slim as possible.
• Understand Your Spending - It is impossible for a procurement team to successfully operate without fully grasping their spending. Every enterprise needs to embrace technology that can help them understand their expenditure, such that the human element of the procurement team is able to use this to make informed decisions.
• Segmented Supplier Base - Invest in procurement technology as a way of segmenting your supplier base, such that they receive varying treatment that is dependent on their segment.
• Training - In order to help your employees to grasp the basics of procurement, it is important to offer a technology training program. This may include certain basics such as not revealing to the supplier what the company's budget is.
• Supplier Performance Management Program - Many organizations manage their employees' performance. It is beneficial to also do this with your suppliers using procurement technology. For instance, host an annual conference where suppliers come to meet you executive team, thereby providing you with critical supplier feedback.

During the post-contract which occurs at the end of the process, it is important for procurement professionals to seek the very last drop of value they can get out of a contract. It is at this juncture that suppliers tend to get smarter as they realize that procurement teams have their processes for tendering and sourcing really tied together. Therefore, it is important for procurement professionals to ascertain that they are able to run operations smartly at both ends.

Scott Laxton is a Senior Consultant at GEP that is a leading procurement services company offering a unique blend of consulting, procurement technology and outsourcing. A detailed business information is worth reading at the GEP's website.