In theory, all the departments in an organization should harmoniously work together towards achieving a common set of goals. In real life, things are a bit more complicated, and often different departments don’t see eye to eye when it comes to achieving business goals.
In this article we are going to talk about the relationship between procurement and IT, in particular about getting the IT department on board with procurement’s transformation plans. Although both departments can agree on some common goals, like reducing costs and optimising processes, sometimes they have different opinions when it comes to the best approach.
The advantages of transforming your procurement through the implementation of a new procurement system are obvious for procurement: from increased visibility and control over spend through to improved efficiency and supplier relations. However, implementing a procurement system doesn’t create a positive change in procurement alone, it affects the whole organisation, IT included. IT can provide a much-needed support for procurement in selecting the right system for your organisations’ needs.
Does your IT department understand the need to implement a Procure to Pay / Source to Pay system? Moreover, how do you get IT to support your implementation project?
We believe it’s important to involve IT in the process of selecting a procurement system at an early stage. Besides making sure that the new system has all the features desired by procurement, you need to make sure it checks all the boxes for IT as well. From easy integration into your current environment, to reducing complexity and making sure your new system will achieve a high adoption rate, these are just some of the things the IT department is looking for in a new system.
Here are some tips for getting IT on board with your procurement transformation plans:
1. Understand why an ERP system is not enough
ERP systems are great for many processes and applications within a business, however, when it comes to procurement, spend management can get lost and cost saving opportunities might be missed.
Procurement has risen to the challenge of cost reduction, saving opportunities and supplier risk management but it needs the right tools and IT’s support to deliver.
So why can’t ERPs support these goals? The advancements in procurement cloud technology dedicated to Procure to Pay and Source to Pay operations support the modernisation of your IT department in a way that P2P ERP modules can’t. Modern procurement systems are able to keep up with new regulations, protect your company from security and supplier risk, and point out the areas in which you can make additional savings in a way that ERPs are not able to.
2. Consider a joint procurement – IT approach
One of IT’s goals is to ensure that any new system the company adopts doesn’t create integration issues with the current environment or adds unnecessary complexity. By working together and understanding the needs of your organisation, procurement and IT have the capacity to decide on the best system for your organisation’s needs.
IT is a critical part in any decision-making process for all technology needs. Involving IT early on in the process of selecting a new procurement system will help avoid disagreements later on in the project .
Although procurement holds the ‘wisdom’ when it comes to strategic purchasing decisions, IT has the technical knowledge that makes sure everything is going to work smoothly with the existing environment.
3. The complexity issue
One of the main reasons for IT not being on board with your procurement transformation plans is the concern for increasing complexity and having to integrate data points from different systems.
Bear in mind that even when implementing new modules from your ERP provider you might run into some complexity integration issues.
It’s natural to think that adding a new system to your environment will create additional complexity. By involving IT in the process of selecting a new procurement system and taking into account all the technical aspects of the process you can avoid the complexity issue.
When choosing a new procurement system, it’s important to look at a company’s existing unified suite, open APIs and its history of unifying the products from companies they’ve bought.
4. Building a strong procurement transformation business case
Last but certainly not least, we want to mention the importance of building a strong business case for your procurement implementation project; not only for getting support from your IT department but also because it will help you define the future state of our procurement organisation, from resources, processes and technology needed, and where procurement fits within the wider organisation.
Both procurement and IT are concerned with the ROI and savings opportunities they bring to the organisation. A good enough reason for them to join forces when it comes to developing the procurement transformation business case as it will affect both teams. Furthermore, combining data from both departments can help create a truly compelling business case.
We believe it’s important for both procurement and IT to understand the benefits of implementing a Procure to Pay / Source to Pay system and how that solution would create more value for the organisation, while helping take some of the strain off the IT department. If you would like to learn more about getting IT on board with procurement’s transformation project, get in touch with us at [email protected]