Hear about procurement leader Sören Petsch's philosophy on learning from IT processes, his tactical approach to automation, and his journey to automate CommerceHub's procurement function.
Technology and procurement automation promise relief from repetitive tasks that burn daylight… but the road to implementation can be daunting. Where do you start, and where should the journey take you?
Sören’s unique combination of finance and procurement experience brings a fresh perspective to procurement. He champions procurement as an enablement tool for organizations. He also shares how automation can clear the path toward greater productivity and better outcomes.
We’re excited to share some highlights from our chat on procurement automation with Sören.
Before the first software tool or plugin goes live, there’s the procurement process. Sören places emphasis on establishing repeatable processes in the procurement function. He draws inspiration from IT professionals who, like procurement, orchestrate large and often complex deliverables.
“When you think about getting work done — especially knowledge work — it's around the workflow and work execution. Workflow is the structure of work, and work execution is the value that I create.”
Building smarter procurement processes increases the performance and quality of the work.
Moving away from repetitive procurement management processes preserves your team’s attention for higher-value work. For instance, managing approvals and workflows within a workflow rather than within email can result in improved quality all team outputs.
Automation works best when you choose a methodology that’s fit for its own purpose. Understanding how a process should work, and customizing it for your procurement strategy is key.
Here again, the IT department can offer insight that informs procurement activities.
“They use several different methodologies that go well beyond Gantt charts or the waterfall methodology,” explained Sören. When implementing automation for CommerceHub, he examined two popular methodologies: Scrum and Kanban boards.
While both systems have merit, the procurement team opted to implement the Kanban board methodology for its ability to support highly repeatable processes. Kanban allowed the team the flexibility to create an automated workflow attached to a ticketing system. It also routes purchase orders and requests. Systematizing ticketing and work assignment got everyone out of their email inboxes and on the same page.
The progression from manual process to automation should follow a predictable path, according to Sören. Workflow comes first. Next, implement a software tool that automates the process and enables team communication. Look for a procurement tool that offers scalability through integration with a large ecosystem of tools.
The final step of an effective procurement process is a fully digitized information system. An ideal procurement management system is free of silos and open to future evolution. With good contractual data in place, you can enrich the process, add KPIs and monitor metrics. You can continue to evolve the procurement technology stack as your practice grows.
Escaping the endless treadmill of manual, siloed processes and reaction-based management opens up a world of opportunities for the procurement department.
Sören points to his own experience with increased productivity and performance. The improved procurement process decreased request-processing time.
“I can handle about twice as many requests on a daily basis versus what able to do before my automation journey.”
Sören also likes removing bottlenecks, like searching through emails and manually handling requests, that improve time-to-performance.
“Procurement is not just there to save the company money. We're also there to get stuff done faster, because speed matters. I believe in today's world, faster is better in procurement.”
As for the fringe benefits of procurement automation? “Frankly, work is more fun. Because we get more stuff done, it's really just more enjoyable.”
Removing the mundane tasks of managing requests has opened opportunities for professional growth.
“I'm learning a whole lot more on a daily basis, and that's deeply satisfying to me. As an assistant administrator of a no-code software tool, I actually get to create solutions for my own problems. I don't have to reach out to anybody else. I can actually build it myself. That is a competency I never thought I'd have.”
Catch the full podcast episode — including bonus material featuring Sören’s best tips for negotiating software for automation.
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