Despite technology being a key piece of the puzzle, it’s critical to understand processes, profit centers, business activity, and risk before overhauling or applying large-scale implementations.
My current role as Director of Global Technology Sourcing at TORC Robotics is slightly different from previous roles. Rather than focusing on cost savings and implementing new technology for cleaning and viewing data, we're focused on strengthening process controls and mitigating risk.
Practitioners should review and understand how process controls and risk mitigations apply to the current business case. A holistic view of your business and its risks translates to both lone wolves standing up a procurement function and large, mature departments.
When looking for additional value sources in an organization, there are three fundamental types of risk:
1. Operational Risk—Assess whether you're buying the right product. Ask yourself: Is what you're buying going to do what you want it to do? For Torc, safety is primary, so it is critical that we get this piece right.
2. Financial Risk—Procurement must verify benchmark pricing to ensure it’s fair and market-correct.
3. Reputational Risk—It’s a business imperative to understand who suppliers are and if there’s an underlying ethical risk involved with working with them.
Only once procurement has a deep understanding of business and how to avoid risk in these three key areas should technology be reviewed, revised, or implemented.
One of the main factors that has allowed me to succeed in negotiations and technology implementations is ensuring my role is understood by stakeholders, and it’s something I urge all procurement practitioners to do. This is universal to any industry, business size and department size.
It’s challenging to know when to push and when to refrain from pushing if your role is not understood and you don’t have in-depth knowledge of business activities and stakeholders. Navigating relationships between stakeholders when it comes to technology will prove to be vital in any procurement function.
Furthermore, it's essential for procurement to understand how each department is using technology. Implementing an expensive end-to-end solution just to remove it and start over every few years is counterproductive, and you will find each department use may use a tool differently. That is true for technology we source for the business, and equally true for technology we source for our own use.
At a young company like Torc, we have to get it right the first time. We don’t have the luxury of wasting resources and starting over.
When considering new Procurement technology and tools, I would urge procurement to focus on a few main areas:
Your technology solutions are likely set up to prioritize reporting to the CFO or CPO, with end-user functionality secondary. Before deeming them inadequate, review the setup and see if something can be changed to improve the end-user experience without sacrificing the stuff that leadership needs.
If your technology solution is aligned with a complicated and lengthy process, it might not be the tool that’s broken. In this case, the process likely needs to be amended and simplified. A process is only as good as the person who wrote it, and over time, in large organizations, it can become overly complex.
It’s rarely worth it to start over with brand new technology, unless your solution is blatantly broken. I have a strong bias toward keeping whatever tools are already in place, and the reason is the amount of work needed to implement a new tech solution often outweighs what could be done to hone what’s already in use. How can you work with the pain points of your current tools and find solutions within those tools? Or perhaps there is a small-add on tool that can bridge the gap.
With wholesale procurement system swap-outs, the view is rarely worth the climb. Understand your tech stack before you start making changes, as you would for any technology solution you source for your business.
At FORGE Tech Sourcing 2024, we’ll be uncovering these topics, and more. Technology is critical to business, and will continue to evolve at breakneck speed. Join us at FORGE to learn how you can avoid being left behind and futureproof your team against redundant implementations.
