How To Avoid the Most Common Mistakes That Companies Make When Implementing New e-Procurement Software
Do you want a procurement solution that only half-works? Or that fails entirely after you’ve poured money into it?
Of course not! But unfortunately, that’s what a large percentage of companies end up with when they try to implement an e-procurement solution. About 66% of software solutions purchased by companies are never fully implemented. If you’re going to reap the benefits of a new procurement system, then you need to learn how to avoid pitfalls and make your implementation part of the 33% that works.
This starts with educating yourself on the most common mistakes companies make when implementation new e-procurement software. You can’t make a plan until you know what you’re up against. Armed with this information, you’ll be ready to avoid the most common mistakes that other companies make when implementing new e-Procurement software.
Why so many pitfalls?
It’s pretty well known in the IT/Software industry that 1/3 of implementation fail entirely. Another 1/3 get scaled back or have their scope changed or reduced. That leaves only 1/3 (or about 33%) being fully implemented.
There are a number of reasons for this low implementation rate. Sometimes it’s an issue of poor scoping on the part of the software provider. Sometimes it’s because the company purchasing software learns that the salesperson promised them features that don’t actually exist or wasn’t upfront about hidden costs. Other times it has to do with poor planning on the purchasing company’s part. There’s definitely not a one-size-fits-all answer to this issue.
What can you do?
Avoiding a failed implementation starts with two key actions: 1) making a plan, and 2) choosing a reliable software solution.
Making a plan covers your company’s side of the implementation equation. You need to do your homework to understand what type of procurement solution you need and then figure out how you’re going to get there. The better prepared your company is, the more a software supplier will be able to help you get what you’re looking for.
Choosing a reliable software solution means you can trust your supplier to hold up their end of the deal. When you’re working with a company committed to putting your needs first and seeing their implementation through to completion, then you have a strong ally to help you avoid implementation mistakes.
Having read all these cautions about failed e-Procurement solutions you might wonder whether or not it’s worth it to even try. Many businesses think so. Online procurement software offers instant access and heightened flexibility that makes it a popular choice. And you can make sure your company is reaping the benefits instead of dealing with a failed implementation if you do your homework by reading articles like this one.
The benefits of e-Procurement are many. They include tightened control, better organization, simplified reconciliation, lower cost, and easier updates to the system. There are some downsides, too, but most of them can be avoided if you’re working with a good software provider. For more information, click here to read an article about the pros and cons of online procurement software.
Where do you start?
You’re going to start by taking a close look at the procurement system your company is currently using. Identifying what works and what doesn’t in your current process will give you an idea what you need to look for in the new software solution. Make sure you talk with people who are actively using the system and get their feedback.
While you’re collecting feedback, make sure you talk with everyone who will be working with the new e-Procurement solution. Find out what they want and don’t want in the new system. This will help ensure the new solution addresses your company’s needs. It’ll also give users a sense of ownership in the new system’s success.
Which solutions will work best?
Once you have some idea of what you’re looking for, it’s time to start shopping for software solutions. You’ll want something that’s easy for employees to use on a daily basis and which you can customize to your business process. You’ll also need to find a software solution with outstanding customer service.
When you’re making a company plan for improving your procurement system, make Software-as-a-Service (SaaS) companies your first choice. That’s going to save you a lot of headaches and keep the burden off your own IT department. You really don’t want to deal with trying to set up the hardware infrastructure and maintain the software needed to do something like this in-house.
Why use SaaS companies?
There’s a definite cost benefit to choosing SaaS. According to a recent study by TripleTree and the Software and Information Industry Association (SIAA), a SaaS system is five to ten times less expensive than installed software. These savings come from a combination of lower upfront costs and lower maintenance costs.
SaaS companies will handle most of the implementation work for you and many are specifically designed to work with your existing ERP system. That means you’ll get to use a new SaaS system 50% to 90% faster than a new internal system. Plus, SaaS providers are experts in e-Procurement and will keep the system up-to-date for you. You’ll just have to select which SaaS company is the best fit for you. We’ll come back to this question at the end of the article.
How should you roll-out the new solution?
Once you have your plan in place and a supplier lined up, it’s time to start rolling out the solution. The SaaS company you’ve hired will handle most of the setup. It’s just up to you to keep things running smoothly on your company’s end.
You might consider rolling-out your new e-Procurement solution gradually. That means you’ll identify your most influential users and give them access to the system before everyone else. After the more highly skilled employees are familiar with the system, you can make it available to the rest of the employees. The ones who are already comfortable with the system will then be able to guide the entire purchasing department through a smoother, more successful roll-out.
When does the 80/20 rule apply?
Everything doesn’t have to be perfect all at once. The 80/20 rule can be a powerful ally in your quest to transform your procurement system. Aim for achieving 80% of your goals in the initial roll-out. Then you can work on the remaining 20% later. That’ll help ensure that you keep moving forward. You don’t want to get stuck on making sure it’s all perfect right off the bat.
Keeping the project moving forward helps keep-up enthusiasm for the new system. Also, the sooner people start working with the system the sooner you’ll start noticing anything that might need to be tweaked.
What role should your software provider play?
If you go with a SaaS company for your purchasing solution, then the software provider is typically responsible for providing the software and setting it up in your company. Unless you want your own IT department to have to take-over at some point, you’ll want to make sure the provider guarantees that they’ll take care of implementing the software they offer.
Ideally, you’ll find a software supplier that will work closely with your company to not only get the software working but also help you tweak functionality. A good supplier will be there during the initial adjustment period to make sure the solution does reach 100% of your goal by the time they consider implementation complete.
How do you know which provider is best?
Because the software provider is so influential in making your e-Procurement implementation a success, you want to make certain that you’re purchasing from a reliable supplier. Start out by looking for software the offers the functionality you need and which is compatible with your company’s ERP system. Once you’ve narrowed that down take a close look at their customer satisfaction guarantees.
There are quite a few SaaS providers out there for you to choose from. When you’re shopping around, look for software solutions that let you see what you’re getting before you buy. They should offer a demo that lets you see exactly how the system would work in your company. That’ll also give your employees that qualify as key users a chance to test out the software interface.
What does NextProcess offer?
NextProcess offers a full-feature e-Procurement system. We designed it to be flexible to your needs, so it will fit most companies’ goals for a new procurement system. And we’re committed to making sure your implementation goes through smoothly. We always provide both implementation and integration support. Our Project Managers will work closely with you to help find the configuration options that work best for your company’s goals and needs. We typically do not consider any implementation project finished (or at steady state) until 6 months after it goes live. You’ll be able to use the system and continue to tweak functionality during that timeframe.
The pitfalls that cause so many software implementations to fail aren’t an issue with NextProcess. We’re always closely involved with the setup of our software and we have a near perfect implementation rate. The only times we haven’t completed an implementation it’s been because the client backed-out due to an unexpected internal reason. Contact us today for a free demo of how our procurement solution can help your company.