Defining and demonstrating ‘value’ is a constant challenge for procurement professionals. Whether you’re making a case for more staff or a digital solution, helping senior stakeholders understand the potential benefits of a procurement investment often feels much harder than it should.
This article outlines 8 ways to confidently communicate the value of a digital procurement investment. Put them into practice and you’ll find a much more receptive audience for your next proposal.
Creating a compelling narrative
Creating a compelling narrative is critical in being able to articulate value to your executive team. This should cover:
- Why the initiative deserves investment
- What the business outcomes will be
- How it will reach its target objectives
- When it will reach its target objectives
However, in order to fully engage senior stakeholders – many of whom operate outside of the procurement function – it’s important to explain the value proposition in terms they understand.
For example, what might a CFO want to hear? What value points might engage an IT head, or audit manager? The better you can tailor your narrative to different stakeholders and their personal definitions of ‘value’, the more successful your case is likely to be.
Here are 8 key themes you can use to articulate multidimensional value for different stakeholders:
- Customer Centricity
- Improving cadence, progress & reporting on direct customer impacting projects
- Enabling internal business partners to originate and progress demand easily
- Ensure efficient change management, adoption and utilisation
- Risk Management
- Ensure Effective Business Controls – Enabling Design & Operating Effectiveness
- Ensuring auditable compliance to regulation, legislation and policy
- Driving improved Supply Chain Risk Management
- Compliance to Information Security Standards
- Enable organisational commitment to Economic, Social and Environmental Sustainability
- Visualise key metrics across supply chain inclusion and diversity
- Digitise ethical workflow compliance (.e.g. Modern Slavery) pre-supplier onboarding
- Enable improved cycle times for key work processes
- Accelerate and guarantee user adoption and utilisation
- Digitise Procurement workflow, pipeline and resource management
- Innovation / Continuous Improvement
- Zero integration required
- Access to rapid product development upgrades
- Leverage industry specific workflow configuration and data visualisation
- Cost Optimisation
- Enable budget forecasting accuracy through real-time visualisation
- Demonstrate real-time cost/benefit analysis and realisation with enhanced data visualisation
- Leverage digital workflow to prioritise resources and provide immediate clarity against business objectives
- Supplier Relationship Management
- Enhance ‘Customer of Choice’ status with material supply partners
- Minimise compliance & reporting burden with enhanced workflow and visualisation
- Rapidly onboard new suppliers and re-certify existing suppliers
- Rapid implementation timeline
- Customised, turnkey solution with zero integration
- Enable category based Procurement strategy & broader business strategy
Articulating speed to value
Stakeholders will also want to know how fast the investment can deliver its proposed value, so don’t leave ‘speed to value’ out of the equation.
Increasingly, procurement departments are being expected to demonstrate value within the first 12 months – especially when part of a broader transformation strategy. With a digital investment, it’s therefore imperative to take into consideration all the time that will be required to:
– Configure the system for your organisational requirements
– Integrate it with your existing systems
– Onboard and train users
– Reach optimal utilisation
This should form a key part of your selection criteria, as stakeholders are unlikely to accept a solution that consumes months of cross-organisational resources before going live.
Adopt an opportunity mindset
Constantly justifying overheads and investments can become frustrating in organisations that don’t prioritise procurement, but it’s important to maintain an ‘opportunity mindset’ instead of giving in to negative pressure. Each business case is a chance to demonstrate leadership and the organisation-wide value procurement can bring.
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