Efficiency and cost cutting are everything in procurement, and when you implement changes to improve these, it’s inevitable that you’re going to cause some disruption. To keep the project on course and transition smoothly, you need a solid change management programme. Without one, your procurement transformation project can really come off the rails. Below is a look at the various major reasons you need well-planned change management in place to carry out a procurement transformation project.
The immense reach of procurement across organisations
Procurement may be one department or one function, but it has enormous reach across all organisations and businesses. When embarking upon a change management programme, steadfast planning is necessary because the programme will entail implementing new ways of working, new processes and new technologies to encourage greater efficiency. A process that doesn’t meet the end-user requirements or isn’t well designed will be difficult to adopt. Note that procurement transformations affect all stakeholders, so it’s important to get them to buy into the project to make it a success.
The conflict that change causes
Get ready for conflict because change has always encountered resistance. That’s something that will never change. A good change management programme can anticipate the resistance to change and incorporate a strategy to help deal with any opposition, ensure a steady adoption of new technology and procurement practices and also a smoother organisational change.
Note that although people may have become comfortable with the status quo, it doesn’t mean they don’t want change… odd as this may sound. It’s important, therefore, to maintain the focus on the reasons why change needs to happen.
The compliance that change management will drive
Procurement professionals and departments can’t just spend the organisation’s money any way they wish. They must do so within certain rules and regulations, and new rules and regulations are entering the industry often. It’s essential the organisation avoids fines or penalties for not complying, which calls for solid change management to navigate the challenges of regulations and compliance.
A process that can adapt smoothly and rapidly to changes in regulations can mitigate risk and generate confidence. Having good tech in place that alerts procurement teams to potential compliance risks and suggest solutions can protect the organisation against the financial damage of non-compliance.
The technological change transformation involves
The use of cloud technology, digital documents and the automation of business processes have had a major impact on how organisations conduct procurement. They’ve changed how people communicate and how they work together. They’ve reduced costs, and they’ve created more options for businesses to acquire the best goods and services at the best prices.
Advances in technology create a need for change and, by extension, a need for good change management. If you’re using Microsoft Excel, email and other manual tools for your procurement processes but are transitioning to a software tool or software as a service (SaaS), a well-organised change management programme will facilitate a smooth, effective implementation and configuration. It’s also important for minimising disruption to business operations, achieving the best return on your investment in technology and on promoting adoption throughout the business.
The identification of potential synergies during restructuring or reorganisation
If you’re restructuring the organisation or conducting a merger or acquisition as part of a procurement transformation project, change management is essential because you’ll be changing the supplier base across several regional networks. An acquisition will establish a new pathway for sourcing goods, and divestitures will change the demands of customers. Change management during an acquisition identifies potential synergies, modifies supplier agreements and manages compliance issues arising from the changes.
The assistance with supplier management that change management provides
Supplier performance has become crucial to monitor in procurement, and organisations have to evaluate cost, delivery, quality and other aspects before choosing a supplier (or deciding to remain with one). A good change management programme can offer insight into ongoing improvement efforts and visibility into supplier performance indicators. This reduces the exposure of the organisation in vendor relationships.
Procurement transformation projects are complex, but they’re also one of our major areas of expertise. If you’re looking to transform your procurement operations, take a look at our procurement transformation service and contact us for more information. We’ll be happy to discuss your project with you and help you transform your procurement processes for the better.