The chief procurement officer’s role is analogous to managing a household’s weekly shopping trip. You’re responsible for ensuring that you have everything you need to run smoothly, without wasting money on excess inventory. You’re running a lean domestic machine.
Now imagine it’s time for your weekly restock. You head for the door with an idea of what you need. Before you go, you glance under the sink for a last-minute assessment of the tools in your cleaning arsenal. At the store, you stock up on bulk dish soap and a few rolls of paper towels, “just to be safe.” When you get home, the items are shoved to the back of the pantry, with no visibility that you already had them.
Suddenly, your “just-in-case” supply is going to waste. But imagine what would happen if you simply installed two puck lights in the back of your cabinet that illuminated your stockpile, and prevented you from stocking up on things you already have.
In procurement, similarly small adjustments can bring visibility and order to repeatable tasks, saving time and money in the long run. But one single source of truth is essential to get started.
What’s in the Procurement Pantry?
Procurement is often thought of as the movement of physical goods, but for every enterprise that relies on technology to stay connected and organized, CPOs are also largely responsible for working with the IT team to both purchase and manage the organization’s software-as-a-service (SaaS) applications.
Today, cloud-based software has critical advantages, but managing these SaaS programs can be a logistical nightmare for the procurement department without a regulated process. With the wider adoption of a distributed workforce, it has become easy for nearly any employee to buy and deploy SaaS apps. Like the dish soap and spare paper towels, these items will get lost in the back of the procurement pantry without being recorded.
At the household level, the pantry can be cleaned out manually. But for someone who’s leading an enterprise with hundreds of SaaS applications and maybe thousands of employees who are able to "go shopping" whether authorized or not, it’s easy for things to get out of control.
According to a Snow Software survey cited by CIO Dive, 44% of IT leaders surveyed identified their biggest challenge as “employees adding new SaaS applications without notifying IT.” Post-COVID-19, IT leaders are struggling to manage their SaaS, even going so far as to implement asset-management teams to get control over application bloat. To herd the SaaS sprawl, CPOs have an opportunity to take charge of the discovery process and bring visibility back to the tech stack.
Getting Organized in 2023
It’s important for CPOs, in sync with IT, to build a structure to discover and manage “what’s in the pantry” (aka the shadow IT) before they can make any additional decisions. For teams bogged down with other requests, following are six things you can do right now to get a handle on your software suite.
Failure to properly manage SaaS at the enterprise level compounds over time, adding stress to already overloaded IT and procurement teams, and creating problems that can be difficult to untangle. Avoid improper data management by standardizing SaaS procurement. CPOs and CIOs should decide together who will own their SaaS management, in order to avoid hindering employee productivity with too many cooks in the kitchen.
Like running a busy household, CPOs and their procurement teams have a lot of moving parts to manage. But by bringing visibility to the SaaS stack through organized discovery and implementation, you can save on IT spend without having to cut back the essentials — promoting productivity and employee engagement throughout the organization.
Ritish Reddy is co-founder of Zluri.
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