Recently, the Next Level Purchasing Association has been reviewing some of the available procurement software systems in the market. This has really been due to the fact that we have read and heard (loudly, I might add!) numerous questions from our students and their executive leaders concerning, “what is the best procurement software system you have ever seen?”
Face it, in my position that is a rather loaded question! The beauty of a particular procurement software system is in the eyes of the beholder so to speak. But much further beyond that clichéd statement lays a more important answer, which I will give towards the end of this post.
At the recent 2014 NLPA Conference, one of our speakers, Ron Nawojczyk from Oracle, brought up some interesting statistics about failed software ERP implementations during his presentation “Coaching to Win: How to Get Your Users to Drive Your Procurement System to Victory”. In his presentation, according to Panorama Consulting, 66% of ERP project implementations fail and, according to AMR Research, end-user adoption is the #1 reason for failed implementations.
Now while I was listening to Mr.Nawojczyk presentation, I started thinking about how many failed ERP project implementations I had witnessed in my previous career in IT. The number caught me quite by surprise; 5 in the past 15 years, which includes 2 failed ERP initiatives at one company!
In the 5 cases I witnessed firsthand, there were other significant issues that contributed to the failures besides end-user adoption, but these other issues eventually circled right back to end-user adoption.
So what allowed these failures to occur? From my perspective there were two main issues.
The first issue that stood out was that organizations were ill-prepared to purchase the right system. In defense of the vendors, they highlighted the features of their systems and those who were involved in the discovery process did not always communicate their specific needs (or were unaware of their specific needs). In 2 cases, I saw modules purchased and installed that were never going to be used anyway. So to this statement you ask, “where was procurement”? My reply is simply, “good question”. For some reason, in these 2 cases, procurement wasn’t invited to the table for discussions and negotiations with these vendors!
When you fail to appropriately address the needs of the front-line user, it is exceptionally hard to get buy-in on an ERP system, procurement system or any other system for that matter. Change within an organization is difficult enough to implement without apathy immediately creeping in because you are making the users’ lives harder, at least through their eyes.
The second issue was an apparent lack of leadership championing the systems. Whether you call it “sticking your neck out”, “putting your reputation on line”, etc., nobody was willing to be a true leader and take responsibility for implementing the system.
Alright, so you’ve read this far because I promised you at the beginning that I would tell you the best procurement software I have ever seen, right? So here it goes, it is hands down by far the following: It is the one that has 100% buy-in and commitment from C-level executive management as well as end-users.
While 100% buy-in may be an unrealistic expectation, executives need to market and sell the procurement system to their team. They absolutely must share their vision with their organization as to why the system has been selected and as to when they will be expected to start using it with no exceptions.
Now, while this may sound like a harsh, “our way or the highway” type of attitude, it really isn’t if sold properly. The end-users need to have their say at the table as well, so why not task your front-line users to participate on discovery teams alongside more senior members of the organization?
In the vendor selection process, a cross-functional team can review vendors and weed out systems by vendors that potentially over-promise and under-deliver. IT can offer their knowledge as to the ability to integrate the new procurement system with current ERP, AP and other legacy computer systems. The procurement department can perform a total cost of ownership (TCO) analysis and negotiate appropriate Service Level Agreement’s (SLA’s) to mitigate risk. Dedicated super users can receive extensive training and become the subject matter experts of the procurement system and go-to person(s) for others within the organization who do not use the system on a more frequent basis.
When senior leadership takes the ball and champions the cause, there is far greater likelihood the procurement software implementation project will be a success. While you may lose some non-adopters along the way, your business will be far better off when a successful plan is drafted, reviewed and implemented with a leadership champion at the helm.
So, in your opinion, what is the best procurement software system you have encountered?