Change Management: The Key to Unlocking Procurement Savings

Companies are spending millions on procurement savings initiatives in order to drive improvement to the bottom line. Buyer and supplier enablement is one of the most critical links between sourcing initiative and measurable bottom-line savings.  This process includes connecting buyers and suppliers electronically and aligning business processes between vendors and buyers.  This alignment is critical to ensuring that both parties can do business efficiently and effectively.  The last critical step in achieving measurable cost savings is driving desired end-user behaviors.

Strong and sustained user compliance rates of 80% and higher will ensure maximized cost savings. The most successful programs have the following characteristics:

• Strong executive commitment
• Targeted communication strategies
• Company-wide user involvement
• Comprehensive user training
• Compliance programs that phase out incumbent suppliers

Getting buy-in from users starts at the top.  Employees must understand the expectations, potential benefits, and impending changes to their work processes.  Continuing communication will break down barriers as employees understand both the expected goals of the program, as well as the knowing when the company reaches milestones. Addressing user concerns builds user commitment.  As their specific needs are addressed, reluctant users will become more positive about the new system. 

In-person training provides an opportunity to answer questions and address concerns about the value of new suppliers. Employees may have spent years developing relationships with vendors that seem from their perspective to be working perfectly in the interests of the company. In order to achieve the full level of savings, it's important to end these relationships and reduce or eliminate maverick spend.

Change management takes time, and must be an ongoing process. There is value in collecting metrics on implementation, adoption rates, and overall savings.  It's important that these results are shared with end users as this will continue driving the success of the program.

Adapted from: http://bit.ly/9K7bUS