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E-Procurement: 5 Steps to Convince Management to Invest

July 14, 2015 by Hillary Ohlmann

Discussing documentHave you ever found yourself at your desk, scratching your head, muttering to yourself that there has got to be a better way to do this? If you’re in procurement and you’re still using email and Excel to run requests and analyze bids, then you’re in luck - there is a better way!

The answer lies in e-procurement. There are a variety of solutions available to procurement departments of all sizes. Finding the fix to your frustrations is not the hard part, unfortunately. The hard part will be convincing upper-level management and the C-suite to spend the money. After all, you’re in procurement, not sales. However, you can take a few ideas from their playbook to help build the case for investing in e-procurement. Check out the steps below.

1. Put your gloves on the table.

Take a look at this short story from leadership guru Dr. John Kotter’s book “The Heart of Change.”

“A large organization had an inefficient purchasing process, and one mid-level executive believed that money was constantly being wasted with each of the organization’s factories handling their own purchases. He thought there could be tremendous savings from consolidating the procurement effort. He put together a “business case” for change but it went nowhere. His boss said that senior executives didn’t feel it was truly a big problem, especially with so many other daily challenges taking up their time.

So the manager had an idea: he collected the 424 different kinds of work gloves the factories collectively purchased and tagged each one with its different price and supplier. He carted the gloves in and dumped them on the boardroom table before a senior executive team meeting. He first showed the pile to his boss, who was taken aback by this powerful visual display of the waste inherent in having dozens of different factories negotiate different deals for the items they needed! The boss showed the CEO, who scrapped the meeting agenda to talk about procurement because what he was looking at was so memorable, so compelling, and so real. It galvanized the executives to action. Ultimately, they overhauled their procurement process and saved a great deal of money.”

It’s may not be enough to write out a logical argument as to why you need new procurement software. Use an appeal to emotions along with your argument. Show, don’t tell. Use visuals and personal stories to make your case to the management; help them feel your frustration. Then show them an example of how your job can be done better and more efficiently with the proper tools in place.

2. Show them the money.

According to a study done by the Aberdeen Group in 2013, the top strategic sourcing pressure was the corporate mandate to reduce costs and increase savings. One of the C-suite’s main concerns is the company’s bottom line, and one of the biggest benefits of e-procurement software is that it saves time. And as the old adage goes, time is money. Furthermore, a streamlined e-procurement platform will make it easier to manage more of the company’s spend. Once buyers free up some of their time by automating the RFx process, they’ll be able to spend more time negotiating improved pricing and contract terms.

3. Follow the leaders.

The Role of Strategic Sourcing
The Aberdeen Group study also found that over half of the Best-in-Class organizations surveyed considered strategic sourcing to be a critical component of their business practices. E-procurement is essential to strategic sourcing because it creates a streamlined, more standardized procurement process. Best-in-Class organizations know how to use their e-procurement software to minimize costs and maximize savings. Point out how your company could benefit from following the example of the leaders in your industry.

4. Try it out.

Have you ever heard a salesperson tell you to “try it before you buy it”? Like you would test drive a new car, test drive the new procurement software you hope to implement. Many of the new e-solutions, like DeltaBid, offer a free trial period. Sign up and look at the demo. Try running a few requests. Once you’ve seen the solution in action, you’ll be better able to sell the C-suite on its benefits. Plus, you can always get in touch with the company behind the solution to get a few pointers on how to convince those higher-up that e-procurement is, indeed, worth the investment.

5. Leverage employee buy-in.

If you are the head of a department or division, get the backing of those working under you. Listen to buyer complaints, and make sure the procurement solution you are hoping to implement solves some of your buyers’ most pressing issues. Show them how new e-procurement software will save them time and make their jobs easier by providing them with a centralized platform for tendering, communicating with suppliers, and comparing bids. Convincing the C-suite will be easier when you can show you have the impetus of your department behind you, thereby making compliance a sure thing once the solution has been implemented.

Have you already sold the C-suite in your company on the benefits of e-procurement? How did you craft an effective argument? Leave your ideas in the comments below!

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Hillary Ohlmann

Written by Hillary Ohlmann

Hillary is DeltaBid's resident writer, copy editor, researcher, and all-around procurement enthusiast. She holds a degree in Journalism and Spanish from UW-Madison.


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