Change isn’t easy, especially when it comes to transforming how Procurement operates in an enterprise governmental agency or organization. Building a business case for change can help accelerate adoption of new technologies and processes that enable digital transformation and the many benefits that come with it.
In a recent webinar, Ivalua spoke with two leaders from top-performing Procurement agencies in the public sector and a subject-matter-expert practitioner:
During the webinar, they shared their insights and experiences around initiating change, and how they were able to execute successful digital transformation initiatives in their organizations.
(The interview has been condensed and edited for the purpose of this blog post. The full recording is available on-demand here).
Andrew: It probably sounds simplistic, but it’s been key to have executive support. We have been incredibly fortunate over the last several years to have very strong support and backing people at the highest levels of our administration, which we can rely upon as we put strategies together. Generating interest from executives has been helpful for capitalizing on our efforts to transform Procurement systems. We’ve also been able to get buy-in from peer states. For example, we were able to talk to the Commonwealth of Virginia, a pioneer in Procurement. Forging partnerships early on continues to pay dividends today.
Victor: We have a decentralized Procurement model, which means that my office oversees Procurement, but there are other agencies that actually do the purchasing. So, different agencies have developed their own practices and they don’t necessarily align with each other. We had to build a common understanding of the problem we were trying to solve, then get people to agree on the right way to solve it, so they could prepare for the associated changes to their practices. Our initial goal was to ensure that everybody was rowing in the same direction.
Dustin: Look at the organization from the perspective of every chair in your org chart, and also from that of other stakeholders, and determine what processes make sense for everyone. That’s one of the best places to start a conversation about what to automate. If you don’t have a good definition of the need and the destination, transformation projects can become a dog-chasing-the-tail exercise, focused on technology for the sake of technology as opposed to leveraging technology to meet a goal. Understanding the mission of the organization from all points of view, and getting people on the same page on how automation and modernization will help you carry forward helps to keep people together if the project becomes challenging part-way through.
Andrew: The key word is “cooperation.” We have always made sure to bring everyone along with us throughout the journey. About six years ago, we held a couple of kaizen events, during which we analyzed the agency’s Procurement process. We spoke with all of the state agencies that do Procurement about what was working and what wasn’t. This generated a lot of goodwill, because people felt like they had a voice. We applied those lessons learned and developed an RFP, then kept the feedback loop open. We bought agencies into the design process, as well, so they had a say in the system we developed. That way, they could explain to their peers the thinking behind the design.
Throughout the process, we’ve included people from these agencies on our steering committee that guides the direction of our Procurement program. We have monthly meetings and open dialogue. If we receive enhancement requests, we discuss them and determine if they make sense or not. We strive for consensus, so that everyone leaves the room in agreement. Our Procurement solution is a solution for the agencies, and we’re there to help make the system do what it’s supposed to do.
Victor: While reducing costs is important, it’s not the only not the only thing that’s important. We needed to figure out a way to manage spend, which required visibility into our Procurement process. Before we launched Passport — our digital procurement process — we had an inefficient paper-based system. My office oversees the Procurement process, but we had very little visibility across the various Procurement functions. We needed a system that would enable us to see everything together, and identify bottlenecks. During the transformation process, we were able to iterate on our system and roadmap, and create new efficiencies we didn’t know we could create.
Andrew: It’s helpful to explain the value of compliance. Even though it’s hard to quantify, executives can appreciate the value of avoiding internal audits and fines, and protecting our reputation.
From the employee’s perspective, standardization is key, and that can be accomplished by having a single platform. In Ohio, we had multiple systems with different passwords, and lots of silos. We told our employees, “What if you had one system to log into to gain complete visibility, and you could see how a sourcing event ties to a contract or purchase order?” Getting away from using multiple systems makes their lives easier and enables them to see connections between different Procurement events. Coming at it from that angle, we were able to generate excitement and support among employees.
Victor: Don’t focus on cost savings alone. A lot of times, you may lean into cost savings to garner support for transformation, but you should also be looking at the broader issue and finding the most strategic way to solve the larger problem. For us, it was ensuring that all vendors entered into the city through the same portal. We didn’t have that initially, so vendors were having a different experience from the beginning — even just signing up to do business with the city. We wanted to send everyone through the same portal, and build off of that starting point.
Andrew: To fast track modernization, you need to find out where you can get momentum. There’s so many different dials you can turn. Don’t strive to be perfect, because that ‘s really impossible. Implement continuous improvement. You may not be able to leverage every piece of functionality completely, but make sure you put in place what’s needed for a core transaction. Get the person in the door, then work on system adoption. Once people begin to see the value, the system will sell itself.
In Ohio, when we went live with Procurement solution, we started with a limited set of catalogs and data, with the goal of generating excitement then adding to the system. That’s been key for us, because if you do everything at once it can be overwhelming. If you chunk it up into increments, you can realize quick wins.
Ivalua’s comprehensive Source-to-Pay eProcurement solution can help you get on the path to Procurement transformation. With stress-free, pre-built integrations and quick deployment packages, you can get up and running fast and realize rapid time to value. Learn more about why Procurement leaders in forward-thinking public sector agencies choose Ivalua.
Jarrod McAdoo brings over 26 years of procurement experience to Ivalua as a product expert for the Analytics & Insights, Supplier Management, Spend Analysis, and Environmental Impact Center Solutions. A frequent thought leadership contributor for the Ivalua Blog, Jarrod has worked across multiple industries, including higher education, public sector, retail, manufacturing, and engineered products. Prior to his time at Ivalua, Jarrod held various roles in category and supplier management—including strategic sourcing and procurement team management where he led teams to implement shared service procurement models and Source-to-Pay systems. Jarrod holds a Masters in Business Administration (MBA) from Duquesne University and a Bachelor of Science degree from Carnegie Mellon University.