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Top 5 Insights On Procurement As Bandaid vs Strategic Move #InstasChat

Tech Finance Business

On Thursday, October 20th, our second #InstasChat went live with Bertrand Maltaverne as our guest. Bertrand is a prominent figure in the discussion on the future of procurement and regularly delivers insightful and powerful content on disruption, change and the need for digital strategy.

As ever, we focused on how things are and how they can be in what is a climate of rapid change and disruptive evolution promoted by digital transformation. One of the main things both our team and Bertrand agree on is the obvious lack of strategy when it comes to the digital transformation of procurement and finance.

Bertrand Maltaverne

When it comes to internal processes, companies seem to turn to technology as they might a bandaid or duct tape…to plug a leak, cover a sore, address a symptom. It is always on a silo-ed basis, always looking to tick a box or keep in line with what others are doing. And more often than not, the others are just doing what others before them did. Which means technology that’s at least 15 years old pervades and old processes abound. The people working within finance and purchasing are still working like it’s the 90s.

Here are some of the key insights on technology as a bandaid vs strategic move from our #InstasChat. We were joined by Philip Ideson, Hal Good, Buyers Meeting Point, Jon Hansen and more.

In case you missed it again, we are making it a regular event on your Twitter feed so keep your eyes peeled on our handle @instasupply

1. Procurement is NOT seen as a value generator!

Procurement is perceived as the low price department, cutting costs and never really generating value or revenue. So the focus when it comes to digital is always in sales and marketing, never in purchasing and finance.

B2B is playing catchup to B2C when it comes to efficiencies through technology. One of the reasons is that procurement isn’t there yet in terms of understanding Customer/Supplier of choice experience. Think about B2C, they’ve been hard at work figuring out what customers want and how they behave. They’ve been doing it for years! B2B needs to understand that when it comes to the internal processes of procurement, the formula is simple: Supplier Relationship Management x Stakeholder Relationship Management

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2. Procurement must focus on HOW it works

Moving away from its old ways of “end justifies the means”, procurement must look at how it functions and how its processes might be improved by technology. The value here is much greater than cost savings. It is all about agility, compliance, risk…

Technology enables organisations to lead the pack when it comes to evolution and development. It is more often than not that competitive edge that will make the difference in share prices and market share alike.

3. Understanding the WHY is key to successful tech integrations

The main reason behind failed tech integrations is that stakeholders and staff do not understand the “why?”. Why did you select that particular software, why are are implementing it, why now, who will champion it, who will see it through. Why is the single most important question here because it forces you to look in. It makes organisations look at their current processes and identify what’s working and what isn’t. They can identify pain points and together with the right tech partner, find solutions.

Many businesses will select software because: a) The CPO or the CFO has used it before in another organisation b) another business they know of is using said tech c) a particular software is cheaper than another even though it covers much less (see bandaid mentality)

4. Selecting the right tech is all about research & being brave

Research is clearly the basis of all good tech selection. Involving suppliers into the process may be a shortcut to this. Organisations can found out about a technology through trusted sources and potentially even ask for free trials for a first hand experience.

Gone are the days of a “blind” five year contract where you buy licenses and hope it all works as you need it to. The race to catchup with B2C has also meant that what is expected in B2B has been (slowly) changing. More information, more transparency, more trust.

And once a technology is implemented, procurement needs to be brave with it. Don’t buckle at the first sign or resistance. Persevere! After all, you are changing the way people work. But if you are making them work smarter, it’ll all be worth it.

5. A successful tech implementation is all about strategy

Coming back to the start, a digital strategy is an absolute must when it comes to integrating technology successfully. Even if it means it will take longer than expected, mind the details and make sure everyone knows why you are doing it and what the steps are.

Support is now a key offering when it comes to software so work with your tech provider to ensure it’s a true partnership. B2B or B2C, it’s all H2H (Human to Human) after all so aligning your needs with the complementary solution will ensure success. New technology is flexible technology and even if you are “all set” with the tech you currently have (guaranteed it’s at least 10 years old though), take a look at what else is out there. Complacency is not a synonym of competitiveness.

Insta Resources:

The future of Procurement is NOW, digital mastery is key for Procurement’s survival!

Future Proof Procurement

Don’t Replace People. Augment Them.

Procurement People: Live Long and Prosper!

Never Ask What They Want — 3 Better Questions to Ask in User Interviews

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