8 Pitfalls to Avoid While Implementing Procurement Technology

The success of any transformation project like most major IT projects depends on how well it is implemented. While the software evaluation often involves multiple rounds of demos, workshops, proof of concept pilots etc., the implementation process is relegated to a check-box afterthought during the evaluation process.

“A McKinsey and University of Oxford research suggests that on average, large IT projects run 45% over budget and 7% over time, while delivering 56% less value than predicted. Some can put the whole organization in jeopardy”

Here are 8 points to bear in mind before implementing a Procurement technology solution:

1. Procurement Cloud Solution vs On-Prem

One of the factors that determine the total cost of ownership of your procurement software is its implementation model. Usually, there are two implementation models: Cloud and On-premises; both have their advantages and disadvantages.

You may want to consider the following points before deciding on On-prem VS cloud software

Cost Differentiators –

An in-house on-prem tool requires extensive investments in hardware, IT infrastructure, personnel support, implementation resources and upgradation.

User Experience –

SaaS solutions have uniquely designed UIs, features an ecommerce-like interface with a suite-wide consistency, easy to navigate and a fresh User Experience, driving high adoption rates.

(Click to Read more about Zycus Dewdrops )

Strategic Differentiators

SaaS is configurable and scalable as per organization’s requirements. Support for internal tools requires additional resource allocation while organizations can benefit from SaaS provider’s dedicated support available 24×7, in most cases.

Integration Differentiators –

Some solutions provide a flexible integration support with external ERPs resulting in rapid value realization. Such integration efficiencies are not feasible for an in-house tool unless all modules have been built ground-up. (Click to Read more about Zycus Integration)

Technology Differentiators –

Cloud offering undergoes regular upgradation, maintenance, and strict security compliances as per governmental and internal regulations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. How much customization is too much customization?

Managing configurations and personalization ahead of time ensures that users can get the most value from the software from the beginning.

In early 2000’s, SaaS disrupted heavy on-prem installations, but it offered one size fits all in the name of best practice

However, SaaS could also fit the gap of not being customizable with a best-in-class App Store that could enable customization, while still retaining all the benefits of cloud solutions. This way, you can tweak your cloud software based on vertical, category or geography, as needed.

3. Should interface with other applications in the IT landscape

Survey conducted by strategic consulting firm ThinkStrategies found ~80% of respondents stating that integration was either highly or somewhat time consuming and therefore a top concern during SaaS buying process

You may want to integrate the procurement system with your backend ERP so that you carry out most of your procurement operations from a specialized software, while you retain your ERP as the system of records (SOR) or the single-source-of truth.

And to execute the integrations, what better than the case where the provider owns the responsibility of end-to-end integration services with the help of middleware. This will ensure minimum dependency on your internal/captive IT teams and transfer the ownership of integration-as-a-service to the provider. (Click to Read more about Zycus Integrations)

4. How will you scale in the future?

Commonly, there are two types of licenses provided by the vendors – one-time license and subscription license.

It is imperative to take notes on how much of your staff that will have access to the system. The more users that have access, the more money you will spend on implementation.

Negotiating on the flexibility upfront is the key to scaling optimally in cases of a ramp ups (or ramp downs).

Ultimately, if your system is unable to support your bottom line, then it’s not the best software for your company.

5. Be the change agent

The rise of world class user-interfaces is now giving way to a world where extensive month-long hand-holding trainings becomes redundant.

Although software’s purpose is to make your business run more efficiently, the end users will need some training to use them. It is imperative to have a solid training model that will not only enable the end users adopt the solution better, but also needs to upskill them from career growth standpoint.

Know more about Zycus University.

Different facets of the change management are typically as shown below:

6. Measure progress and achieve milestones

The result of a successful implementation is not just when you Go-Live with the software in the budgeted timeline, but it is when you start realizing the value out of the newly implemented solution, as illustrated below:

The implementation services partner must include the Value KPIs needed to measure and validate the success of the program.

7. Be wary of hidden implementation costs

Software implementation budgets are the most complicated part of software selection and implementation process. The estimated costs always exceed in most of the cases. Even a well-planned budgeting can overrun. Many times, this can happen because of some of the software and company related issues and unexperienced consultants.

Let’s look at top areas where there are more chances of budget overrun:

  • Testing
  • Data conversion
  • Hardware and storage / Maintenance
  • Customer dissatisfaction

8. Be prepared on the usual points of failure in implementation

Here are the most common reasons found for failures of procurement software implementations:

  • Lack of clear objectives
  • Software is just a technology enabler
  • Choosing the wrong procurement software
  • Low User Adoption

In summary, the companies that defy these odds are the ones that master key dimensions that align IT and business value. Choosing the right approach can make the difference between a failed implementation and stellar success!

Click here for a detailed Procurement Solution Implementation white paper. Contact Zycus for more information.

 

Giridhar Chakravarty

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Giridhar Chakravarty

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