How to lead the transition to a best-of-breed ecosystem in procurement

DPW roundtable in partnership with HICX

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Discussion attendees:

Carmen Erhardt
Director Corporate Purchasing 
Henkel
Anne Watine
Global Head of Procurement Excellence
Sanofi
Mark Smith
VP Digital & Talent Supply
bp
Ragnar Lorentzen
CCO
HICX
Lauren Feery
Global Procurement Transformation Director
Diageo
Christophe Villain
Global Head of Supply Chain & Procurement Technology
Nestlé
John Stannard
Digital Procurement Manager
AstraZeneca
Ruji Mahmud
Sector Procurement Head, Efficient Natural Resources
Johnson Matthey
Matteo Pondi
Head of SCM Process Excellence
Vodafone
Alexei Burns
Chief of Staff to CPO, Strategy, Planning & Performance
Centrica
Arjan de Jong
Head of Procurement Solutions & Analytics Procurement Excellence
Vattenfall
Costas Xyloyiannis
CEO
HICX
 



Bringing together an integrated portfolio of best-of-breed solutions can help procurement functions give their organizations exactly the right tool for each job. But how can procurement leaders best deal with the many challenges a best-of-breed approach involves?

Many procurement functions around the world are undertaking a major shift in
how they use technology. They are letting go of their previous ambition of having
a single do-it-all suite that works end-to-end and meet all their needs. They are instead starting to bring in a range of different applications and platforms from
different suppliers in order to get the very best tool they can for each key task.
This is known as a best-of-breed approach.

The reasons for following a best-of-breed approach are clear enough: as well as
offering performance improvements, using a specific tool with specialized
functionality for each job can help procurement functions drive better user
experience, which can increase adoption and so increase ROI on technology
spend.

And this switch isn’t just being driven by procurement professionals. Colleagues
within the business will frequently want the best tool they can get so that they
can avoid having to make do with the suboptimal performance and experience
that a more general, less specialized tool may deliver, especially if it was
originally selected for its strengths in a wholly different area.

However, taking the best tools of the present moment and combining them into
a coherent, reliable package is far from straightforward. For one thing,
procurement leaders must now deal with the continual and often complex
integration of new tools. Bringing together tools and technologies built by
different companies and operating in different ways can also cause serious data
challenges. And while many of today’s latest applications offer consumer-level
user experience, combining a dozen of them into a single package can
potentially lead to a confusing and disjointed experience unlikely to leave users
happy.

To explore how leading procurement functions are tackling these challenges, we
brought together procurement leaders from a number of high-profile businesses.
Leading the conversation was Ragnar Lorentzen, Chief Commercial Officer at
supplier management platform provider HICX.

The roundtable covered a wide range of ideas and approaches, and while there
was no unanimity on how organizations can best proceed, there were many
fascinating ideas and insights for those taking on this challenge. Here is just a
small selection.

Four key points for procurement leaders trying to succeed with best-of-breed

1. Really get to know the business, so you know what’s really needed

When it comes to putting together a portfolio of the right tools for your
organization, one thing remains clear: you really do need to know the business.
Exciting new tools and technology, and the benefits they promise, will always create interest across the enterprise. But access to the latest platforms and apps can be seriously expensive, and the associated integration costs can all also rapidly add up.

To make sure the right tools are bought at the right time, as one of our participants explained, procurement teams must know exactly what their business is trying to achieve: “We start from our business ambition, and this for us is a very clear roadmap defined by the board,” he said. “We start from there and decline it into a clear roadmap for our function, and for the digital environment that the function needs to have. That’s why in certain areas we willnot engage, and in others we will accelerate.”

2. Make agility and adaptability core to your best-in-breed strategy

It is no secret that the business world is changing more rapidly and less
predictably than ever before, so businesses have to stay on their toes. Whether
it’s changing conditions in the market, new consumer demands, a revolutionary
new technology or new competitor: an unexpected challenge or opportunity is
always around the corner, so businesses must be able to pivot their strategy
quickly and at short notice.

With the opportunity to buy in solutions as required, a best-in-breed approach
should help procurement functions to support business agility more generally.
But as they source new tools and platforms, procurement leaders must keep that
need for flexibility continually in mind.

As one participant explained, “We need to be able to change the tool or change
the strategy as quick as possible. So we need tools that can be live tomorrow
and that I can dismiss in five months.”

3. Develop a strategy to sell the benefits of broader investment

For procurement professionals, the benefits of a fully integrated best-in-breed
solution can seem obvious enough. As one of our participants pointed out, when
you get all these cutting-edge tools working together seamlessly, not only do you
get the benefit from each tool, but you also get a multiplier effect from them
working well together.

But the benefits of a fully integrated solution may not be clear to those in the
business. So procurement leaders must put together a strategy to convince their
organizations to make those investments that may not immediately be noticed
by users, but which by bringing everything together can lead to huge cumulative
benefits for the business as a whole.

Our roundtable participants had much advice and experience to share on this
front, including recommendations to:

  • Put together videos and visuals to tell the story of the benefits of integration

  • Identify stakeholders with the vision and courage to drive this type of transformation

  • Link broader procurement investments to the solution to specific business problem

  • Get suppliers of these kinds of solutions to deliver presentations to your business

4. Make the most of the tools you have so you can invest when opportunities arise

The change to following best-of-breed approaches is part of a broader shift for
procurement away from its traditional primary focus on savings. But business
being business, there will always be cost pressures and an imperative to drive
increased ROI and value for money.

Given the scale of the investment required for businesses to get access to the
latest and best technology and tools, you cannot let your focus slip once an
investment has been made. As one of our participants stressed, CPOs need to
stay on top of how the tools they already have are being used.

When a tool is not delivering its promised benefits, procurement leaders need to
find a way to cut its cost, to cut it out completely, or to change how it is being
used so that it starts to generate the expected value. In this way procurement
leaders can ensure that resources are used as efficiently as possible, so that
when unforeseen opportunities arise, there will be resources available to invest.

And when it comes to best-of-breed solutions, keeping alert to new opportunities
is vital, because much of the very best of today’s technology will soon be
outperformed and outclassed by the platforms and apps of tomorrow.



This event is held in partnership with HICX

The HICX platform was launched in 2012 and quickly gained traction in Europe and North America, with Global 2000 companies who saw the platform for Supplier Data Management as transformative for Procurement, Finance and Shared Services. Unlike most companies in the space which focused on hard coding a single process, we focused on creating a platform – why? In today’s fast paced global economy your requirements today are not going to be your requirements tomorrow, if you cannot quickly adapt software to fit your needs it will quickly become a legacy platform. www.hicx.com

DPW

DPW is the global innovation and mission-based ecosystem for digital procurement. We are driven by our purpose: To unlock the true power of procurement through excellence in digital.
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