Procurement Foundry is always looking to stay on top of what is trending in our industry. One way we do this is by reading everything procurement-related. We even created our own Essential Procurement Reading List for 2022 to share some gems we’ve discovered with you.
Adding to the list, author Brad Veech’s book, Software: The Silent Killer of Your Company´s Budget, has been creating quite a buzz in the procurement community, particularly among procurement practitioners in the IT and technology space. The book gives readers knowledge and tools for how best to negotiate and manage your procurement software portfolio, without getting taken advantage of by your suppliers. Keep reading as we further dissect this interesting and useful procurement resource.
Specifically, we explore some of the book’s key points, particularly those regarding procurement software, and offer you some expert insights as food for thought.
Why You Need to Care About Procurement Software
Digital transformation is a major focus of all organizations at this point. According to the experts at Deloitte, high-performing CPOs are spending less time on transactional activities that software solutions take off procurement’s plate.
It would be pretty safe to say that everyone in 2022 has some form of tool or software that they rely heavily upon on their team, but managing them is another story entirely.
Software: The Silent Killer – Key Themes
Author Brad Veech, who clearly knows the importance of procurement software, is equally attuned to—and passionate about—the fact that purchasing it makes you a victim of a heinous crime: murder! The casualty here? Your budget… pronounced DOA, at least once that procurement software purchase check clears (or doesn’t).
Specifically, Veech attests that—in his own words, and not to mention the very title of his book—software is the “silent killer” of your company’s budget. He goes on to support this bold assertion with several key arguments, or themes, the first being that procurement software companies have created a one-sided business model.
Procurement Software Companies Have Created a One-Sided Business Model
Veech holds nothing back when he boldly points out the proverbial elephant in the room, explaining how one-sided today’s software relationships and contracts are. Software companies have secured the upper hand and an unfair advantage by creating original contracts for companies to purchase their solutions.
While this may seem benign, I assure you it is malignant in nature, as the majority of these contracts lock you into long-term agreements that have large annual increases and make it hard to get out of them without incurring significant penalties (read: a bunch of money owed for your freedom).
Veech goes on to explain that by leveling this playing field, you can turn the tables and gain the advantage over your competitors who do not understand the complexities of this most critical of contracts.
Level the Playing Field
Veech’s book offers some invaluable advice on how to negotiate new software agreements, and also touches on how to vanquish any vampirish annual renewals you are currently still victim to that persist in sucking the life out of you, and draining you financially every 365 days.
More and More Tech Sourcing Projects
In a recent episode of PF Topics in Tech, Brad Veech explained how more and more sourcing projects are becoming tech sourcing projects. Technology is part of everything we do, and that is not going to change. For example, retail store shelves used to be technology-free. Now we have digital signs, digital displays, price checkers, etc.
We are running out of things that don’t have technology, and that is also not going to change. Procurement is going to have more and more responsibility in this wheelhouse as society continues to evolve.
To learn more about procurement software and smart practices, read our article found here. You can also check out our must-read book list mentioned earlier, as well as join us in the next topics in technology event.
Michael Cadieux
Rich Young: 11/28/23 1:15 PM
Andrew Henson: 11/28/23 1:06 PM