A Four-Step Formula for Better IT-Procurement Collaboration

Over the past few years, technological developments like cloud-native platforms, artificial intelligence-driven solutions, and robotic process automation have been upgraded from “nice to have” to “must have” within the procurement function. Technology now drives procurement and has pushed a dramatic re-engineering of its processes. As a result, the CPO’s remit has changed as well ― much less tactical and much more strategic; more collaborative, especially with finance; and more accountable for direct bottom-line impact.

Frankly, some procurement organizations have found it hard to keep up with the pace of change. Transformation and technology implementation can be slow and difficult. In a recent survey by The Hackett Group, 84 percent of respondents said that digital transformation would fundamentally change the way procurement services are delivered over the next three to five years; but only 32 percent said that they actually had a digital transformation strategy in place.

Enter the CIO. As procurement and finance teams strive to create greater value for the business by harnessing new, disruptive digital technologies, the CIO’s organization has a key role to play in enabling and catalyzing this digital transformation.

CIOs are expected to contribute to the enterprise’s competitive edge by identifying and deploying new technologies, developing integration strategies, ensuring scalability and security, and maintaining sufficient flexibility to allow for the fostering of enterprise innovation.

Experts at GEP share four proven ways in which CIOs and other IT leaders can collaborate with CPOs and other procurement leaders to drive greater enterprise-wide value.

 Align Technology to Business Needs

Develop a strong understanding of procurement and finance function objectives and the key technological challenges faced by these key business partners. While there could be competing priorities, it is important to drive the decision-making process based on an elevated understanding of the overall business strategy and align the enterprise’s tech capabilities with business goals.

 Agree on the Business Goals

It’s critical to work closely with procurement and finance teams to have a clear understanding of expected outcomes from a technology standpoint. CIOs must also identify key performance indicators and establish processes to measure progress on a regular basis in addition to revisiting business goals with procurement periodically, to identify any course correction that may be needed to realign with new goals.

 Pool Knowledge to Identify the Best Solution

An ideal solution from a tech point of view may not be the best from procurement’s standpoint, and vice versa. It’s important that buying decisions be made together with input from CPOs and senior procurement leaders, who likely have perspectives derived from experience within their respective functions. CIOs in turn can help procurement identify and deploy new technologies powered by artificial intelligence, big data, IoT, blockchain, etc. Procurement solutions that incorporate these technologies ― such as the GEP SMART unified source-to-pay software platform ― accelerate digital transformation. They amplify productivity, boost accuracy and savings, and deliver next-level performance.

Once the best solution has been identified, the success of deployment largely depends on close collaboration between the IT and procurement organizations. Mutual support helps achieve the right balance between speed and efficacy, as well as optimal management of the change process which yields higher adoption rates and faster delivery of results.

 Create a Larger Ecosystem

Disparate systems and disjointed point solutions fail to provide a holistic picture of progress ― or lack thereof ― toward business goals. CIOs must look at deploying a cloud-based, end-to-end solution that enables fluid, cross-functional flow of information between procurement, enterprise buyers, suppliers, and the finance team, operating from multiple locations across the globe. Fluid information flow, both internally and with external stakeholders, boosts transparency and reduces the requirement of constant coordination, allowing process improvements and facilitating informed, more effective decision-making. The larger procurement and supply chain ecosystem resulting from a cloud-based source-to-pay solution also facilitates supplier integration, superior supplier performance management and savings tracking.