KPMG: Mindsets around Procurement for SaaS must evolve

Many procurement organisations fail to see that digital transformation is about people & processes; the same myopia exists in their Software as a Service

A recent KPMG article by ERP Cloud Specialist, James Green, asks: "Why does it appear that procurement for Software as Service (SaaS) and related implementation partners, is stuck in an on-premises mindset?"

He continues: "Transforming to the cloud is more about adopting new ways of working, than configuring a technology solution. Your approach to procuring such systems may therefore need to change."

What Green is tapping into here is the misinformed idea that transformations are still, myopically seen as fundamentally technological in nature, when in fact true transformation is not about technology, but about people and processes, ie 'ways of working'.

Green recognises that a people-processes-centric approach is critical to procurement for SaaS.

He says:

"Large numbers of ERP / HCM cloud projects come to market with a combined procurement for Software and Implementation Partner.

"As migrations to cloud platforms are solution led programmes by design, the heavy focus on current system requirements seems to be a backward approach to selection.

"Selection processes that are mainly based on the technology capability do not address:

  • How key outcomes will be achieved.
  • How success will be measured.
  • How the organisation will be made ready to adopt the change.
  • How the operating model will be revised to embrace continual innovation."

Green holds that business outcomes should take precedence over simple functional requirements, that beyond simple tech, transformation and adoption though best practice is key, and that effective collaboration with suppliers will be a determining factor for transformational success rates. 

On the idea that technology should be de-centred in transformations, a recent Hackett Group article asked: "Should people be at the top of CPOs’ agendas?"

On this issue, Nicolas Walden, Senior Director of Hackett Group looked at the importance of investing in people when releasing intelligent procurement practices.

Walden believes that while technology will be a key enabler, it isn't a ‘silver bullet answer’.

He says: “I think we need to be led by the vision. What is procurement all about? Where are we going? Who do we need to be in the future to meet business requirements and provide business value?

"And so I see technology as just one of these tools. We need data, we need insights and analysis, and we need great people, and it’s that last part that I think many organisations neglect, and don’t invest enough time and energy into.

"There is this massive gap, the people aspect, new roles, new skills, new expertise, and new ways of working that I think too often gets missed.”

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