How are top procurement professionals addressing today’s procurement challenges? What role do they give technology in reducing costs, adding value, and improving employee and customer experiences? These were some of the topics covered in a recent event held by Amazon Business, where procurement professionals had the opportunity to join a dialogue with leaders in their field. In attendance were Amir Jafari, VP of Finance and Corporate Controller at ServiceNow, and John Proverbs, Head of Procurement at KLA-Tencor. In this post, we highlight the part of the conversation that focused on change management in procurement.
What are some of the areas in procurement where change is happening quickly?
Jafari: We are focused on driving the adoption of automated technology with vendors and users. Adoption supports greater savings and risk compliance. Our goal is to get to a touchless system where human intervention is minimized.
Proverbs: It can be challenging to convince people of the importance of change and innovation in a company that has good profit margins, whether you’re talking about direct or indirect spend. At the same time, we have to change because our customers expect it, and because we’re constantly asked to do more with less. Becoming more efficient is critical, because we can’t directly manage every type of spend that’s out there.
Jafari: Where we saw the biggest challenges were with customization, where every person or department has their own way of doing things. We decided to look beyond point in time solutions. We evaluated the business as a whole in terms of geographic expansion, product growth, tail spend, and so on. Now we have an actual strategy—a vision—for every function within source to settle.
We built this strategy around a framework of care for our users. We want to deliver an experience that makes it easier for them to come into our world of procure to pay rather than “going rogue.” That brings everything together in one place so we can take care of compliance on the back end and drive efficiency through touchless systems.
How do you manage change in a way that drives adoption and maximizes value for your company?
Proverbs: I’ve been in the business of procurement for almost forty years, and it’s still really challenging to deal with legacy systems and legacy ways of doing things. It would be really cool if I could start from a blank piece of paper but we don't have that luxury. Change management is critical when people are used to doing things a certain way, especially in an environment where tail spend seems small relative to your margins.
We build change management into how we deploy new technologies and processes. It’s all about how we approach the audience. We try to be creative in how we go after them. We want them to be engaged, we want them to understand that source-to-settle is one, unified team. We’ve done soft launches so that we make sure we get the feel of the business before we do something. We've done campaigns so that people get a feel for what the bigger efficiencies are that they're going to gain. We’ll advertise it at certain management. I think it really depends on which platform you're rolling out whether it's on the procurement end, or sourcing for source to settle, or on the back end for accounts payable which again we would take a different approach.
Are they all corporate users? Are they users we have a relationship with? Are they spread across the dozens of countries where we do business? All those things play a role.
Proverbs: It’s important to look at all the levers you can pull but there are always two key sets of stakeholders: executives and users. The first one has to be your executive. You need executive buy-in for everything you’re going to do—top-level agreement, top-level support, help socializing it, and they are your group for escalation if other people don’t buy-in.
How does user experience help with procurement change management?
Proverbs: Twenty years ago, you put in SAP, everybody said fine, that’s the way we’re going to do it. Now you’ve got to make sure the customer experience is really good. If not, they’re not going to adopt. You have to make sure you’ve made their world better. They’ll always find a way around the process if they don’t want to do it. This is especially true for managing the tail.
Jafari: The user interface is the gateway to adoption across the user base. We want to develop systems where there is no training required to use it. That might be seen as contradictory to the way technology is typically deployed, where users are expected to adapt to whatever you give them. That encourages them to go around the systems, which is the source of a lot of the problems in the first place. Nobody trains me on how to use consumer apps. We shouldn’t need to in business-to-business, either.
Proverbs: You’ve got to get on the wave of disruptive innovation. Don’t fight it. I don’t know what it's going to look like in a few years, but personally I think it's a pretty exciting time to be in this space and there’s a lot to take advantage of.
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