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CPO Challenge: Mapping Processes to Systems
The challenge of aligning processes to technology systems has been and remains a longstanding procurement problem and a major hurdle to success. This is one of the underlying reasons that the average procurement department has difficulty using solutions to drive business value. Whether or not budgets allow for process automation tools, organizations seeking to improve should start by getting their processes right. When looking at procurement processes independent of technology, we see that standardized sourcing and solid collaboration capabilities are both important Chief Procurement Officer strategies.
Given the large number of procurement transformations that have been heavily enabled, if not driven, by the usage of supply management technologies, it is continually surprising to see the relatively low market adoption rates of the different solutions. Lack of automation across core process areas, in this day and age, leaves 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. Procurement leaders overseeing fully manual processes are not well-positioned to take on the challenges ahead. These leaders must understand that the solutions introduced over the past twenty 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.
“There have been two major strategic drivers in the procurement transformations that we are leading: (1) Visibility where the essence of supply management is having a consistent, high quality view of all the goods and services spend and (2) Alignment that leverages technology to drive consistent workflow across the Sourcing and Procure-to-Pay (“P2P”) processes.” – Head of Procurement, Fortune 100 company
Certainly, technology alone will not win the day. Staffs must be oriented and open to the change issues surrounding new technology and the teams must be sufficiently staffed and trained in a way to ensure that real business value is generated and captured from the deployed technology.
While a holistic, linked, and fully-automated source-to-settle process remains the exception not the rule in today’s market, some of the top-performing procurement teams have attained this holy grail of procurement process linkage and most are getting closer to realizing this vision and realizing greater value from their efforts. With a streamlined source-to-settle process in place, organizations can work to refine their sub-processes, eliminate unneeded steps, and develop a more external focus. Organizations that lack any semblance of continuity and follow-through across their processes miss large opportunities and consistently, or in some cases, quite dramatically, erode the value of their work.
Many procurement groups are exposed by real, and sometimes deep, challenges across their people, process, and technology. It is incumbent upon the Chief Procurement Officers and leaders of these exposed organizations to challenge the status quo and make the decisions needed to improve their operations, their competencies, and their performance.