Can you define the X-Factor? And no, I don’t mean the US/UK singing competition that has spawned countless spin-offs and a production line of hit-and-miss musicians. What we are talking about is someone or something with a special talent or quality, making them stand out from the crowd.
If you are a sports fan you might think of LeBron James, Steph Curry, Usain Bolt, Megan Rapinoe or Lionel Messi. It’s that person who walks onto the pitch and causes a crackle of anticipation in the crowd as to what might happen next. Outside of sport, it might be a band you would go the extra mile to see, or the actor you wouldn’t want to miss seeing on TV.
When it comes to the business world, the X-Factor is slightly more difficult to find or define. But that doesn’t mean it doesn’t exist. We just need to work a little harder to shine a light on what the X-Factor is in procurement, and then show it off to the wider population.
In procurement, much of the research into the so-called X-Factor has focused on the individual. From Professional Advocacy and Gravitas, to Integrity and Innovation, the list of traits seen in procurement leaders is well defined. So once we swap the ‘I’ for the ‘us’, what traits would define the wider procurement profession?
Now the focus is on what procurement can deliver for organizations and within that is where we may discover our elusive quality. Irrespective of what procurement has done in the past and where the profession is heading in the future, there is a strong argument that cost savings will still be the key focus of procurement strategies.
Centralized procurement and supplier consolidation are just a couple of strategies that can positively impact the bottom line. However, in a digital world where technology is king, few cost savings can be achieved without effective and efficient management of data. And for this, procurement’s best bet is using world-class procurement software.
Rookie vs. Veteran Performers
At its core, procurement software is a solution that automates the functions of the traditional procurement or purchasing function. Raising purchase orders, receiving and receipting invoices and spend analytics – you know, all the time-consuming administrative tasks that you just love doing.
The issue is that, in a market that is saturated with options, which solution is going to fit your organization and turn in the world-class performances you need. Will you take a risk on the rookie solution? It’s fresh to the market and highly adaptable to your style, but it’s almost completely unproven in a competitive environment.
Or will you go for the veteran solution, brought to market by the big organizations, and proven time after time? However, these systems might be a bit set in their ways, struggle to adapt to a new working model and ultimately fail to deliver all of what’s promised.
Factors to the X-Factor
New or old, which of these solutions has the X-Factor to make you sit up and take notice? It comes down to what the constituent elements of a world-class procurement software solution are.
First and foremost, you want an integrated system that can be aligned to fit your needs, and that speaks to your existing IT infrastructure. Then you need to be looking at most, if not all, of the following elements being part of the offering before you can consider it to have world-class potential:
- Spend Analytics
- Order Management
- Risk Management
But how can you be sure this is world-class? Excellent players can score home runs, 3-pointers, winning goals and touchdowns, but world-class players understand how the game is moving and just how to put themselves in the right position to take that opportunity. For procurement, this is spend analytics.
Great spend analytics provide procurement departments with the ability to track and visualize their data in real-time and make better decisions. Accuracy is king, but get it right and not only do you reduce errors, eliminate unnecessary duplication and administrative process and speed procurement up, you can realize major savings.
And the return on your investment in the form of savings will make the difference between your procurement team being set for the big leagues and a seat at the strategic table, and being left behind in the minor leagues, drowning in admin and longing for your big break.
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