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Investing in Procurement Technology – What Happens When the Technology Goes Awry?

By Roshnee
In Contract Management
Jun 28th, 2013
0 Comments
4521 Views

This time around we thought of taking a case study approach to understand how correct technology can make lives easy for procurement. But first let’s see how investing in an incorrect technology affects an organization.

Investing in Procurement TechnologyTake the case of this leading global manufacturing giant with revenues exceeding $10bn, headquartered in the US which had invested in Sourcing, Contract Management and Spend Analysis solution.

The procurement team was in for a shock when,

  • A decentralized sourcing process involving several different sourcing systems spread across global geographies processing tens of thousands of sourcing projects were unable to handle complex and large sourcing events resulting in long sourcing cycle time. This blocked the visibility of the procurement top brass into the existing sourcing process.
  • The contract management solution which had thousands of user licenses had a poor adoption rate on account of complex user interface. Additionally, the solution did not have stakeholder based access control which exposed them to data security risks. The rudimentary search functionality led to contract duplication and non standardized terms and conditions while creating contracts.
  • The multi-billion spend data flowing through a homegrown data warehouse, gave extremely low visibility to procurement, especially in the indirect categories which resulted in crucial savings opportunities being missed out.  Non standardized commodity price tracking system in the homegrown Spend Analysis tool gave the sourcing execs a tough time as they were not able to take advantage of favorable commodity market scenarios.

These are really serious problems for an organization that is global and has invested millions of dollar in implementing the technology to support procurement.

So what kind of technology should the manufacturing giant have invested in?

Stay tuned as we will discuss this question in the next blog post.

 

About "" Has 160 Posts

Roshnee works with the content leadership team of Zycus. She regularly writes on procurement - trends and best practices, sometimes taking the off beat path to bring in a fresh perspective. She also drives the branding activities of her company. In her free time she enjoys hot cuppa coffee with the latest fiction book. She is an MBA in Marketing and a graduate in commerce.

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