Procurement teams using legacy tools often struggle to reach full potential and maximize their business impact. They can unknowingly fall behind competitors who are automating processes and driving innovation with modern-day software-as-a-service (SaaS) e-sourcing strategies.
The benefits of modern solutions don’t stop at ease of use. According to a survey from Deloitte, 61 percent of procurement leaders delivered better year-over-year savings after ditching legacy systems and implementing newer tools.
Forward-thinking chief procurement officers (CPOs) are turning to modern technologies to provide insight into procurement impact and savings. In the process, they’re becoming the driver of enterprise-wide transformation. But with numerous options to choose from in today’s market, finding the right sourcing solution to achieve this transformation can be a challenge.
Here are three lessons that procurement leaders should consider as they look to re-tool with a modern sourcing solution that aligns with overall business strategy.
Simplify the Collaboration Process
The business landscape is evolving faster than ever, which means that savvy CPOs must proactively transform their teams to stay ahead. Sourcing teams often focus on cost savings, but in today’s competitive landscape, procurement must shift the focus to become more than an office of cost-cutting. CPOs must drive true business impact and collaborate to deliver strategic outcomes.
According to a study by McKinsey & Company, implementing collaborative processes and tools boosts productivity by 20-30 percent in global software development teams. When procurement leaders champion user-friendly tools that drive collaboration and innovation, they can increase the likelihood of positive results for their teams.
The sourcing team at VMWare, a global leader in cloud infrastructure and digital workspace technology, manages $2bn in annual spend. With that much money at stake, weak adoption of a sourcing tool is out of the question. After years of using a legacy tool — and realizing that the ROI was practically nonexistent — the team knew it had to make the switch to a simpler and more user-friendly e-sourcing tool.
In the evaluation process, VMWare prioritized a solution that was intuitive for sourcing teams and stakeholders alike. Once the team implemented a modern sourcing tool, collaboration quickly became a focal point for interactions among stakeholders, suppliers, and the procurement team, easing pain points both internally and externally.
Advocate for Better Stakeholder Engagement
Stakeholder engagement is an obvious and critical next step. The success of sourcing teams is based on trust and collaboration. Because knowledge-sharing allows for better alignment and direct insight into strategic business goals, stakeholders can help sourcing to prioritize projects and deliver results that drive success.
Once VMWare implemented a modern SaaS e-sourcing tool, stakeholders quickly jumped on board. Says Kelle Garcia, Center of Excellence manager for global strategic sourcing: “Our stakeholders are pleasantly surprised. Previously conditioned to using confusing and laborious tools, they have been delighted by the simplicity of the tool.” Stakeholders are now able to easily send requests and have instant access to projects and information. On top of that, the modern SaaS e-sourcing tool allowed VMWare’s internal stakeholders to quickly and efficiently find solutions through collaboration with the sourcing team.
Cultivate Data Awareness
Continual business impact isn’t possible without a culture of data awareness. By creating a central repository of sourcing truth from which the entire business can access information, CPOs can share insights in real-time and deliver valuable learning reports. In turn, data and insights gathered can highlight sourcing’s strategic importance, and allow procurement to grow an influential voice within the business.
Following implementation of the SaaS e-sourcing tool, VMWare saw a significant increase in completed projects. “Due to the ability to customize fields and obtain up-to-date, real-time reporting, we have doubled the number of projects taken to market,” Garcia says.
Collaboration, stakeholder engagement, and data awareness might seem unattainable for a procurement team with cumbersome legacy solutions, but when proper technology aligns with these strategies, it provides a clear pathway for business success.
“Our modern SaaS e-sourcing tool’s flexible and accessible interface is helping our whole team quickly go to market and collaborate with stakeholders,” says Garcia. “We’re positively influencing the perception of automated competitive bidding as simple and flexible. Even better, we’re no longer leaving money on the table due to lack of vendor and stakeholder adoption.”
By embracing modern SaaS e-sourcing tools, CPOs can strengthen their teams’ relationships with stakeholders and benefit from quality data insights, creating change across the enterprise.
Stan Garber is president and co-founder of Scout RFP, a provider of sourcing and procurement software.