Key considerations when choosing a technology solution

Technology is transforming the way organisational procurement is managed. From real time services, chat functionalities and machine learning implementation. There are a myriad of ways to make your organisation procurement department more agile, more effective and more competitive. But with so many technology providers to choose from, how can you ensure you select the one that will deliver the right solution for you? Which provider will convey real value?  Which one will measure up to your requirements and support you during implementation? 

This article sets out the key factors to consider when going through the process of choosing a supplier.

Expertise 

Another aspect to consider is the experience and knowledge of the provider, it is important to conduct a thorough market research in order to understand what is available. When considering a specific provider, it is essential to comprehend what credentials they hold. A good starting point would be to view the Gartner Magic Quadrant. This matrix allows for a comparison between Challengers, Leaders, Niche Players and Visionaries. This provides an overview of the market’s competitors.

Implementation strategy and effort

On a technical level, it is paramount to understand the viability of the solution and how it will fit with existing processes and systems. An organisation must assess how easy will the current users be able to understand and learn the new technology being implemented and how long this will take until its operational. An implementation of a new technology will certainly have an impact on organisational culture and how collaborators work and communicate with each other. Hence the importance to have a strong and consistent strategy during the whole implementation process. Throughout this stage it is crucial for the whole participants to be working toward the same objectives and focusing on achieving the same outcome, clear communication and collaboration along with transparency are key for a successful implementation strategy.  

IT Strategy 

Technology strategy should be one of the main focus when selecting your technology provider. When an IT strategy is well established, it fosters collaboration and helps align new and existing investments. Fundamentally, an IT strategy will help to avoid incompatible systems and internal technology gaps which would potentially lead to a loss in competitive advantage and business growth. A key part of an IT strategy is to delineate whether the business should follow a best-of-breed strategy or take a single-vendor approach. An organisation can purchase all of its systems from one single vendor and buy different packages and access the best vendor in each area – best-of-breed. For example, an organisation might purchase a procurement package from one vendor and a finance package from another. As opposed to a best-of-breed, a single-vendor approach is taken when an organisation uses one single package across all departments. However/Having said that, there is a clear trend towards a best-of-breed strategy. The reasons for such shift is clear: by having multiple solutions, organisations become less dependent on a single supplier and the process of shifting from one vendor to another becomes less painful. In addition, a single vendor might provide with a wide range of functionalities but will not hold extensive expertise across all areas. These factors along with the advances of technology and the capacity for different software solutions coexist and work in parallel has influenced this shift. However, the decision of a strategy needs to be made considering the financial impact, security issues and how the end user will be impacted by such a decision. 

Procurement Strategy and Operating Model

The procurement strategy needs to be well thought out in order to establish how procurement is done, it ensures that the company is procuring in a way which brings value and is cost-effective. In addition, it provides a clear set out plan for the future. A technology provider must be clear of this strategy and be able to develop a solution which will meet future processes and possible organization expansion. This way, the solution can provide with continuous improvements and empower the organization to gain a competitive advantage by establishing the appropriate procurement strategy. 

Sitting within the strategy, the company should be clear on its target operating model when choosing and communicating with a technology provider. A centralized procurement operating model will require different needs and ways for a solution to operate compared to a devolved procurement operating model.

Cost

When selecting a technology provider, cost will likely take an important role in the final decision. Firstly, determining a budget should take precedence. Several factors such as your current variable and fixed costs, return on investment of the new solution and the expected time to implement it and reap the benefits. 

Business requirements

All businesses are different and so too are their needs.  Make a list of what you want.  Consult key stakeholders, especially those who know the process, and define the functions and features you would like to see included so that the provider can come up with a customized solution that fits your requirements and your budget.