Have you ever wondered why, with the great advances we have made in digital technology – including AI, so many E-procurement initiatives still struggle to get the needed traction to achieve success?
No matter how great the technology, how well-versed the end-user procurement professional may be, or how perfectly an implementation goes, “siloed” implementation will undermine even the best-executed strategies.
The following discussion stream on LinkedIn regarding yesterday’s post on the technology adoption curve explains what siloed implementations are and how to avoid derailing procurement’s digital transformation efforts.
Great question, Jon! I’ll tell you a story:
I remember trying to implement a new CRM system for our sales team back in 2017. Whatever we tried, we couldn’t get the sales guys to change behaviour and adopt the system. It wasn’t until we used the CRM to report sales performance (weekly meetings, etc.) and calculate the sales reps’ commission that they fully adopted the tool.
The lesson is you have to make it in the interest of the individual user. People don’t use technology because they’re told to. They use it because it delivers tangible value in the day-to-day of their job. Which is why product-centric platforms, like Slack, do so well.
Thanks for the share of the great story, Nick Verkroost!
To your point about “making it of interest” to the individual user, this also extends to users and stakeholders in other departments.
Before implementing the online procurement solution for the DND
in the late 1990s and early 2000s, we did an enterprise-wide alignment with different departments.
It was an essential first step because the field service technicians were on a different system and had performance incentives that had a negative impact on the procurement department’s ability to achieve its objectives. The disconnect was that the techs were measured on how many service calls they could do daily. As a result, they would “sandbag” their parts order until they were finished at the end of the day.
Unfortunately for procurement, with MRO parts, the price would increase exponentially later in the day they were purchased. Furthermore, because most parts had to cross the border, the 90% next-day SLA contract requirement languished at 51%.
If we had just silo-implemented our solution without seeking end-user alignment across the board, no matter how well the system worked, procurement would have still underperformed.
Ref link: https://bit.ly/3oe5Vql
Thanks for the question, Jon W. Hansen.
We don’t see the TALC (the curve above) as an explanation for why adoption doesn’t happen – but rather why certain segments of the total addressable market or service obtainable market are unwilling or unready to adopt.
Within a segment that SHOULD adopt (e.g. the early majority for a company that has completely saturated the early adoption segment) presents resistance; our experience is that the product isn’t yet appropriate for that market.
The most common (but not the only) reason for this is product management that has incorrectly specified the MVP and subsequent iterations of the solution. This is where Agile should help – reordering of the backlog to identify those stories and epics with the greatest impact.
Marty Abbott, I am glad I came across your article in my research and look forward to future dialogues.
Regarding your comment about “incorrectly specified MVP,” can you elaborate?
Sure thing – any base or initial product (minimum viable product) that does NOT meet the needs of some portion of the intended section of the target market.
That could be “too little” of something – but more often, in our experience, it is having built the “wrong things” initially.
Underpinning is the notion that we should learn from markets – not attempt to enforce our views on them. Our jobs should be to find the best solution to quickly penetrate a market and iterate to get those features. It should NOT be to assume that we are correct and the market is “dumb”.
Marty Abbott: Well said, e.g., minimum product viability. When you talk about not attempting to “enforce our views” on the end user client, you are also on the mark. Such an approach reflects an equation-based versus the need agent-based model.
To your point, check out my reply to Nick Verkroost’s comment in this same discussion stream with the case reference and the issues with silo implementations.
Here is the outcome regarding the above case that supports your terrific insights – https://bit.ly/3oe5Vql
“By August 2003, a full production program was introduced and successfully tested. (In the test case, a major public sector organization realized a 23% cost of goods savings annually over a period of several years while simultaneously reducing the number of buyers required to manage the contract to 3 from an original 23. Delivery performance and product quality also improved dramatically.)”
The message is that you cannot implement an E-procurement solution in isolation from the different systems and objectives of other stakeholders within and external to the enterprise.
If you have more questions regarding siloed implementation or, have a story to share, please share them in the comments section below.
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Procurement Insights
“Siloed” Implementations: One of the main reasons E-procurement initiatives fail
Posted on September 28, 2023
0
Have you ever wondered why, with the great advances we have made in digital technology – including AI, so many E-procurement initiatives still struggle to get the needed traction to achieve success?
No matter how great the technology, how well-versed the end-user procurement professional may be, or how perfectly an implementation goes, “siloed” implementation will undermine even the best-executed strategies.
The following discussion stream on LinkedIn regarding yesterday’s post on the technology adoption curve explains what siloed implementations are and how to avoid derailing procurement’s digital transformation efforts.
Nick Verkroost • CEO @ Canopy | Empowering procurement teams to get maximum visibility of their suppliers | Speaker & Board Advisor | 10+ years of scaling B2B tech companies
Great question, Jon! I’ll tell you a story:
I remember trying to implement a new CRM system for our sales team back in 2017. Whatever we tried, we couldn’t get the sales guys to change behaviour and adopt the system. It wasn’t until we used the CRM to report sales performance (weekly meetings, etc.) and calculate the sales reps’ commission that they fully adopted the tool.
The lesson is you have to make it in the interest of the individual user. People don’t use technology because they’re told to. They use it because it delivers tangible value in the day-to-day of their job. Which is why product-centric platforms, like Slack, do so well.
Jon W. Hansen Author, Sales Strategist and Ghostwriter: Creating the “write” words for you! Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Thanks for the share of the great story, Nick Verkroost!
To your point about “making it of interest” to the individual user, this also extends to users and stakeholders in other departments.
Before implementing the online procurement solution for the DND
in the late 1990s and early 2000s, we did an enterprise-wide alignment with different departments.
It was an essential first step because the field service technicians were on a different system and had performance incentives that had a negative impact on the procurement department’s ability to achieve its objectives. The disconnect was that the techs were measured on how many service calls they could do daily. As a result, they would “sandbag” their parts order until they were finished at the end of the day.
Unfortunately for procurement, with MRO parts, the price would increase exponentially later in the day they were purchased. Furthermore, because most parts had to cross the border, the 90% next-day SLA contract requirement languished at 51%.
If we had just silo-implemented our solution without seeking end-user alignment across the board, no matter how well the system worked, procurement would have still underperformed.
Ref link: https://bit.ly/3oe5Vql
Marty Abbott CEO, Co-Founder AKF Partners
Thanks for the question, Jon W. Hansen.
We don’t see the TALC (the curve above) as an explanation for why adoption doesn’t happen – but rather why certain segments of the total addressable market or service obtainable market are unwilling or unready to adopt.
Within a segment that SHOULD adopt (e.g. the early majority for a company that has completely saturated the early adoption segment) presents resistance; our experience is that the product isn’t yet appropriate for that market.
The most common (but not the only) reason for this is product management that has incorrectly specified the MVP and subsequent iterations of the solution. This is where Agile should help – reordering of the backlog to identify those stories and epics with the greatest impact.
Jon W. Hansen Author, Sales Strategist and Ghostwriter: Creating the “write” words for you! Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Marty Abbott, I am glad I came across your article in my research and look forward to future dialogues.
Regarding your comment about “incorrectly specified MVP,” can you elaborate?
Marty Abbott • CEO, Co-Founder AKF Partners
Sure thing – any base or initial product (minimum viable product) that does NOT meet the needs of some portion of the intended section of the target market.
That could be “too little” of something – but more often, in our experience, it is having built the “wrong things” initially.
Underpinning is the notion that we should learn from markets – not attempt to enforce our views on them. Our jobs should be to find the best solution to quickly penetrate a market and iterate to get those features. It should NOT be to assume that we are correct and the market is “dumb”.
Jon W. Hansen Author, Sales Strategist and Ghostwriter: Creating the “write” words for you! Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Marty Abbott: Well said, e.g., minimum product viability. When you talk about not attempting to “enforce our views” on the end user client, you are also on the mark. Such an approach reflects an equation-based versus the need agent-based model.
To your point, check out my reply to Nick Verkroost’s comment in this same discussion stream with the case reference and the issues with silo implementations.
Here is the outcome regarding the above case that supports your terrific insights – https://bit.ly/3oe5Vql
“By August 2003, a full production program was introduced and successfully tested. (In the test case, a major public sector organization realized a 23% cost of goods savings annually over a period of several years while simultaneously reducing the number of buyers required to manage the contract to 3 from an original 23. Delivery performance and product quality also improved dramatically.)”
The message is that you cannot implement an E-procurement solution in isolation from the different systems and objectives of other stakeholders within and external to the enterprise.
If you have more questions regarding siloed implementation or, have a story to share, please share them in the comments section below.
30
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