Procurement Needs a New Operating Model, Part 3: Technology

Friends, we’ve arrived at the last chapter of our trilogy on the reinvention of the procurement operating model. In this segment, we’ll set our focus on digital transformation. For many organizations, the pandemic has accelerated digital efforts by years. Yet most consider their digital transformation is still a work in progress. A recent Boston Consulting Group survey revealed that more than a third of respondents felt that their organization lagged behind its competitors and only 30% of companies navigate a digital transformation successfully. If you are considering digitization of your Business Spend Management (BSM) process, please read on for some boardroom proven guidance.

This is the final part of the 3-part series about how companies must evolve their Procurement Operating Model to the next level, accelerate value creation, and make procurement become a competitive advantage to their organization.

In Part 1, we talked about how procurement has to evolve its PROCESS, moving to a much more agile, assertive, and proactive support model. In Part 2, we addressed the most essential resource, PEOPLE, and the need for talent to be much more diverse, have EQ, and be strong project managers ready to maximize value creation through innovation and cross-functional collaboration.

This final piece will focus on TECHNOLOGY, its key considerations, and why this is a critical element in next generation procurement organizations. While technology is an essential component of procurement’s future operating model, many procurement organizations are only at the beginning stages of their technology journey. Having the right technological landscape allows procurement to focus on value chain excellence (Level 4 procurement).

Since I have been in the position twice in my career to select a Source-to-Pay platform, I can share my personal experience and some of the lessons I’ve learned along the way.

Demand a Seat at the Table

While procurement excels at finding the right products, services, and resolving complex business challenges, we don’t necessarily do a good job of advocating for resources on our own behalf.
Fellow practitioners have often asked me how to secure tech investments and what I did to prioritize digitization of the Business Spend Management (BSM) process versus other strategic investments. My response is that we need to think carefully and strategically about primary questions such as:

• Why do we need to digitize?
• How does this support the strategic objectives of the company?
• Why is this important for the business, procurement, finance, and IT?
• Why is selecting a BSM platform a procurement decision and not an IT or finance decision?
• Why should procurement drive the BSM strategy?
• Who are the most important beneficiaries of digitizing BSM?
• Which platform offers the most significant ROI/adoption and drives the most amount of value?

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About the author:

Michael Van Keulen (aka “MVK”) is a passionate and seasoned procurement evangelist with a comprehensive track record of driving value through business transformation at global companies. MVK is currently the Chief Procurement Officer at Coupa Software, the global leader in cloud-based Business Spend Management software, where he is responsible for driving best-in-class procurement practices across the company, support business development and be a source for peers looking to elevate and (digitally) transform procurement.

MVK is especially passionate about building teams, driving value, organizational transformation, CSR, and diversity & inclusion.