WeWork: Simplifying the Procurement Digital Ecosystem

WeWork's Global Head of Procurement discusses how to navigate the complex procurement digital ecosystem and create a roadmap for digitisation

When one platform isn't enough

In today’s rapidly evolving business landscape, where supply chain disruptions and technological advancements are reshaping industries, digitisation has become critical for procurement functions to remain competitive. The procurement technology market is set to double to US$12bn by 2028, but despite the many tools and software options available, it can be challenging for procurement leaders to make sense of it all.

In this article, Gary Levitan, Global Head of Procurement, Sourcing, Contingent Labour, & Supply Chain at WeWork, discusses the challenges of procurement digitisation. In his speech titled ‘When One Platform isn't Enough,’ Levitan highlights the need for procurement leaders to take a regimented approach in evaluating their procurement processes and selecting the right digital tools.

We delve into Levitan’s insights on how to navigate the procurement digital ecosystem, evaluate software solutions, and create digital solutions that promote good communication.

Gary Levitan of WeWork took to the stage at Procurement & Supply Chain LIVE London last year to discuss Procurement digitisation. The subject of his address was ‘When One Platform isn't Enough’.

Levitan is Global Head of Procurement, Sourcing, Contingent Labour, & Supply Chain. 

What’s your take on the procurement digital ecosystem?

The supply chain disruptions that we're going through now are creating opportunities for tools and processes, and it seems like there's a new tool or piece of software that is released almost every single day. 

At WeWork we're going through so much transformation.

The procurement technology market is still small. It's about US$6bn, but by 2028 analysts expect it to have doubled. 

That's actually pretty substantial growth. But still, that's not a giant software ecosystem market. 

The two key metrics on this that are important is that 60% of the market share is held by the top 10 providers. We're talking about tens of thousands of different tools and companies. Also, 30% of overall market share is held by one, SAP.

Really, procurement technology has been around only for 25 years or so, and today organisations are way more decentralised than back then. WeWork is a perfect example. There are many more people making purchasing decisions, and modern businesses require many different functions. We can't expect the tools and processes from the past to help us today.

There's a lot of companies that are too complex for an all-in-one ecosystem of tools. You simply can't analyse each part of your business to find what tool is best for you. So there's still a huge need for that. 

There are so many procurement software options. How do you make sense of it all?

There are so many different types of software platforms, tools and services that target the procurement function, and we’re not just talking large global organisations here. Any small procurement or supply chain function can be complex also. 

As procurement leaders, we get pitched by software vendors every day. We go to conferences, where we get pitched even more. How do you even begin to make sense of it all? 

I like to oversimplify everything. I categorise all functions within a procurement end-to-end process as being two basic buckets. It's either strategic or it’s transactional. 

Once you organise your function in those two buckets, you're now able to place a lot of these software pitches, tools and platforms into one or the other.

And then you start noticing which ones straddle strategic and transactional. But ultimately your strategic and transactional functions are not as related as some suppliers might make. They're pretty different needs and functions. 

So once you split things up like this it really helps you guide conversations when you’re being pitched.

How do you decide what is right for your organisation? 

At WeWork we’ve gone through so many transformations we've had to make such decisions multiple times and if I didn't have a regimented approach it would be a complete disaster.

One of the first things I did at WeWork was map out my vision for an end-to-end procurement and supply chain process. This is critical. If you're looking to digitise your organisation you need to know what the key functions are. You need to know how you’re going to get from where you are now, to where you need to be in order to deliver the value your CFO, stakeholders, and Wall Street needs you to deliver. 

What is each step you have to take? 

This is the key to evaluating tools. It’s extremely important. You might decide for example that there is no value in having a sourcing tool. I've been using email for 20 years and it works pretty spectacularly. 

If there is a sourcing tool out there that's going to provide value I'm thrilled to look at it. But if I don't need it then that makes the conversation more focused. 

How do you evaluate end-to-end solutions?

You take the same regimented approach to evaluating end-to-end ecosystems. If you don’t then you can end up paying for tools you don't need, because a lot of what you already have may be functioning well. 

Never lose sight of how you need to get from point A to point B. Work out where you need help and where you don't. This allows you to evaluate what's being pitched, and how to create a roadmap for your digitalisation.

How do you create a digital solution that promotes good communication?

Another thing I did at WeWork around digitalisation was to know exactly how all the component parts were going to communicate with each other. 

You need to create an elegant user experience for your stakeholders. As procurement professionals, you cannot have anything holding up decision making, or nobody's going to use it. They'll find ways to go around it. 

So you have to understand how each layer within your end-to-end process works together. You have a communication layer, a workflow layer, and then you have the financial control layer – typically your enterprise resource programme. 

So again, when you map out the communication layers in your process, it guides conversations around these different tools.

Is it important to map out use-cases?

Yes, map out and create every potential use-case workflow you have. At WeWork we have some pretty easy-to-understand and rigid workflows for certain types of decision-making requests. But we still have thousands that are not mapped out and that are pretty unclear. Now we're being more tactical about this, because if you’re evaluating a tool that is going deep into functionality, you need to test how it will potentially work.

But if you don't know the workflow these tools or services are going to support, you will miss something, and somebody will end up being unhappy, a stakeholder gets left out, or it might break the entire system. 

So a good way to get granular in analysing these tools is to have a clear idea of a day in the life of a user.

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