Editor’s Note: Today, we’re previewing the second report in a series of reports entitled CPO Game Changers – Volume 2: New/Improved Technology, sponsored by Zycus and available for download here (registration required).
In 2016, procurement organizations as a whole and Chief Procurement Officers (“CPOs”) in particular frequently find themselves in the untenable position of having to enhance their performance while maintaining the resources that they currently have. Many have reached a plateau in their performance, and are hard pressed to overcome such plateaus without an infusion of fresh staff and/or talent into their ranks. But this alone cannot propel CPOs and procurement teams over the obstacles that lay before them.
New and improved technology solutions that automate the source-to-settle process can be true game changers for understaffed and overwhelmed procurement organizations. Conversely, the lack of automation across core process areas, in this day and age, leaves CPOs and procurement organizations susceptible to the failures of the past and constrains each group’s ability to gain and maintain credibility and optimize operations and performance.
Given the large number of procurement transformations that have been heavily enabled, if not driven, by the usage of supply management technologies, it remains surprising to see the low market adoption rates of the different solutions, like spend analysis and contract authoring (spoiler alert: they are well below 50%, even for Best-in-Class organizations). Procurement leaders overseeing fully manual processes are not well-positioned to take on the challenges of the decade ahead. These leaders must understand that the solutions introduced over the past 15 years can no longer be dismissed as some sort of fad. They should reflect on the longer-term needs of the larger enterprise and understand that they most likely outweigh any short-term challenges that can arise from tackling new projects and introducing organizational change. Progressive leaders are not pulled kicking and screaming into the future; they embrace the changes that can help improve performance and position their teams for future success.
In a recent survey of 318 CPOs and other supply management leaders, Ardent Partners found that, despite low adoption numbers, a majority of respondents believe that deploying new or improved technology solutions is a game-changing strategy that can propel their organization to the next level of performance. CPOs that prioritize technology adoption as a top strategy have the pulse of market innovations and position their organizations to overcome performance plateaus. Over the past decade, supply management solutions have become generally more affordable, more usable, and easier to deploy. Ardent Partners research shows that procurement teams that are successful in deploying supply management solutions and driving user adoption see, on average, higher returns than other functional teams (i.e., HR, finance, etc.) do from their technology investments. Given this reality, CPOs should confidently push the case to automate the entirety of their processes and then focus the team on executing the deployment plan and generating a strong ROI.
Want to learn more about the value of procurement and AP technologies, and how to successfully adopt and implement them? Download the free report here (registration required).