Last week, we had a look at best practices in managing supplier and contract lifecycles, by Julien Nadaud, Chief Product Officer, Determine, Inc., who spoke at Ardent Partners’ third annual CPO Rising procurement executive summit in Boston last November. This week, we’re featuring questions asked and answers given during and after a panel discussion in which Julien participated.
I recently had the privilege of participating in Ardent Partners’ third Annual CPO Rising Summit. The calibre of Chief Procurement Officers (CPOs) and procurement professionals who attend this annual event is outstanding, and there is a considerable amount of shared learning. A number of challenges and issues were raised, most of which were echoed by many organizations in attendance. Here are some of the most pervasive:
Q: I do not have the technology tools I need, nor do I have executive support, and if it involves others departments it becomes way too difficult to implement a solution. What is my best strategy?
A: Start small and simple, and use the tools you have to provide procurement services to your internal customers — ideally with self-service and visibility. Once you start becoming integrated across business processes and showing the value procurement brings, it is way easier to get more internal support in order to expand and add more services.
Q: My supplier master data is in SAP and my contracts are managed by legal; this means I can only focus on transactions, not tactical or strategic procurement.
A: Automating transactions by implementing a P2P solution is also a very good way to start a procurement transformation. From there it makes sense to add supplier and performance management once integration with SAP is complete. Connecting execution purchasing agreement in a contract repository is also an easy move, especially if there is integration with an internal document management tool.
Q: We do not manage purchasing contracts because it is too time consuming and complex. What shall we do to improve processes and lower risks?
A: First, a purchase order is a contract that is usually more important than anything else. Correctly managing POs in a P2P solution is critical (avoiding no-po invoices). Attach your general conditions to each PO by default — especially for services procurement. Then if a supplier disagrees with the terms, you can start negotiating a master agreement. Templates are ideal for that, and you should try to limit changes in the terms as it can very easily generate inconsistent or even contradictory terms if there are too many changes. Having a clause management tool is the ultimate goal, but very few organizations are ready for it.
Future-proofing procurement.
Procurement transformation isn’t a waiting game. Staying ahead and staying competitive requires adapting and leveraging technology, trends and best practices to proactively transform the procurement function for a successful future. This means having parallel paths in the realms of strategy, tools and organizational (stakeholder) mandate. As I learned at CPO Rising 2018, leading procurement professionals are eager to embrace the coming changes, and the most successful already have.
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