Procurement executives are inundated with lengthy buzzwords and overwhelming amounts of data from software vendors. Terms like GenAI, machine learning, autonomous sourcing, autonomous negotiations, AI-assisted events, and data visibility, can often cloud up the decision making process. Navigating this complex technological landscape can be challenging for procurement executives. To cut through the noise and make informed decisions, procurement executives should adopt a strategic approach.
Here are five important questions to ask software vendors so you can cut through the fluff:
1. Addressing Pain Points and Use Cases:
Which specific pain points related to tail spend or strategic sourcing do your customers commonly face, and how did they manage these challenges before adopting your solution?
Inquire about specific pain points and use cases when evaluating software vendors to cut through marketing noise and make informed decisions. This approach shifts the focus from abstract features to practical applications, allowing executives to assess the software's real-world relevance and proven effectiveness. Concrete examples demonstrate how the solution addresses challenges, providing clarity in decision-making. It also ensures that the software aligns with unique organizational needs, avoiding one-size-fits-all solutions. By asking for specific use cases, executives prompt vendors to move beyond buzzwords and generalize claims, leading to more transparent and practical discussions. Ultimately, this approach grounds the evaluation in tangible results and enhances the likelihood of a successful procurement technology investment.
Lastly, inquire about how companies were addressing these challenges before adopting technology and what prompted them to invest in software solutions in the first place.
2. Impact on Measurable KPIs:
Which Key Performance Indicators (KPIs) do you directly impact, and do you have an objective way to measure this?
Ask about the Key Performance Indicators (KPIs) directly impacted by the solution and inquire about the objective way to measure these metrics. This question is pivotal for several reasons.
Firstly, it ensures that the software aligns with the organization's procurement goals by identifying which specific KPIs it directly influences. Additionally, by seeking an objective measurement approach, procurement leaders can evaluate the software's accountability and transparency in delivering results.
Understanding the impact on quantifiable metrics such as cost savings percentage, supplier performance ratings, or cycle time reduction provides procurement leaders with tangible evidence of the software's contribution to efficiency and effectiveness. This approach allows procurement leaders to make strategic decisions based on data-driven insights, ensuring that the software not only offers features but also delivers measurable outcomes that streamline processes and enhance overall procurement performance. The question encourages vendors to provide evidence of the software's value proposition, demonstrating how it has positively influenced KPIs in ways that are applicable and beneficial to the procurement function.
In summary, asking about impacted KPIs and the objective measurement of these metrics is fundamental for a comprehensive evaluation, enabling procurement leaders to make informed decisions based on the software's real-world impact on critical procurement metrics.
3. Explaining Technical Features Simply:
Explain your product like you would to a five-year-old - ELI5
Encourage vendors to explain technical features using the "Explain Like I'm five" (ELI5) approach. This challenges them to break down complex concepts into simple terms, making it easier for you to comprehend.
Request live or recorded demonstrations of the software in action. Seeing how the platform works in a practical scenario can make technical features more tangible and easier to understand.
Instead of diving into intricate technical details, focus on understanding how the software will impact your daily operations. Ask vendors to explain how their solution streamlines processes and enhances overall efficiency.
4. Customer Retention and Attrition Insights:
What is the primary reason customers renew, and what is the primary reason you lose customers?
Procurement executives should ask vendors about the biggest reason customers renew contracts and the primary reasons for customer attrition to make informed decisions when evaluating software. Knowing why customers renew provides insights into the software's sustained value, aligning with organizational goals. Understanding the reasons for attrition helps mitigate risks, enabling a proactive approach to potential issues and ensuring a customer-centric partnership with vendors. It's a strategy that focuses on long-term success and positive outcomes for the procurement function.
5. Implementation Process and Tangible Results:
What does the implementation process look like, and how quickly can our team expect to see tangible results?
Understanding the implementation process is pivotal for procurement executives, especially concerning change management considerations. Initiate the conversation by asking the software sales team about the expected timeline for implementation and when measurable outcomes can be realistically achieved. Inquire about the level of support offered during this transition, emphasizing the importance of change management resources and guidance. Gain insights into how the software aligns with change management best practices and facilitates a smooth adoption process for the procurement team. Discuss potential challenges during implementation and how the software's features support change management strategies. By integrating change management considerations into the implementation discussion, procurement executives ensure a well-managed transition that not only meets functional requirements but also aligns seamlessly with the organization's change initiatives.
By approaching the software evaluation process with these simplified strategies, procurement executives can make more informed decisions without feeling overwhelmed by technical complexities. Remember, the goal is to find a solution that addresses your unique challenges in a way that is clear, practical, and aligned with your organizational objectives.
Conclusion
By adopting a strategic approach and asking the right questions, procurement executives can cut through the complexity of procurement technology and make informed decisions. From understanding specific pain points to assessing impact on measurable KPIs, simplifying technical features, considering customer retention insights, and understanding the implementation process, these steps ensure alignment with organizational objectives and drive tangible results. Tools like Fairmarkit work to help procurement professionals execute on all of these with ease, as well as manage suppliers in the easiest way possible. Start working with clarity and focus while navigating the procurement landscape today and to learn more about all that Fairmarkit can do for you schedule a demo today.
