A New Way to Business Case for ProcureTech

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Hi readers,

It’s the changing of the seasons today (moving into Fall in Canada..).

I love Fall for the colors around here (reds, yellows, oranges). It only last 2-3 weeks but every year it’s magnificent. It reminds us time is passing whether we want it to or not…

In this same vein, I would love it if you can take a minute to “show me your colors” by updating your subscriber profile.

Letting me know what you’re up to is the best way for me to provide the most relevant content possible for you.

Otherwise, I’ve got a “lightbulb moment” note for you tonight.

It sure went on for me when I first came across the idea… 💡

📰 In this week’s edition:

• 📋 5 procurement jobs that caught my eye

• 🏆 The Road to the ProcureTech Cup : Episode 4

• 🌙 A New Way to Think About ProcureTech Business Cases

Let me know what you thought in the poll at the bottom of this email.
Your feedback shapes the content of this newsletter.

ICYMI 👀: My best Linkedin post of the week:
A job in Procurement will expose you to some pretty interesting things...

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🏆 Road to the ProcureTech Cup

This Week’s Episode

Join me as Axya comes on the show to demo their manufacturer-specific Source-to-Pay platform. Stop spending time on the phone, in email and in Excel…

Let’s do it!

Last Week’s Episode

Creactives demoed their material master data governance, cleansing, enrichment and spend analysis platform on the show last Friday.

A great tool for capital intensive businesses with hundreds of thousands of parts in their ERP(s) (and all the challenges that go along with that).

If you missed it and want to watch the replay, pick you poison:

🌙 Sunday Night Note

A New Way to Think About ProcureTech Business Cases

The typical ProcureTech business case is usually tied to one of three value levers:

• An increase in productivity (doing more with less effort)

• A reduction in costs (doing the same thing for less)

• A creation of new value (enabling valuable activities not done previously)

Think about it… All other value levers fit into these three:

• Risk reduction/mitigation

• Conforming with / Reaching ESG objectives

• Automation of PO creation

• Payment term optimization

• Purchase cost reduction

• Payment rebates (e.g. with PCards)

• Sourcing automation

• Etc.

All of these can be tied back to at least one of the main three value levers.

However, to justify a new project, we usually start with a “blank page” approach to the business case:

Then, we put together the data and assumptions to support our case for change.

But what if I told you there’s another simpler way to build your business case?

All that’s required is a bit of organizational history and humility…

Let me explain…

If you’ve implemented ProcureTech before in your organization, you’ve realized 2 things:

1. User adoption is the most important barrier to benefits realization

2. You probably did not have the correct assumptions around user adoption in your initial business case

Therefore, there’s a gap between your initial ProcureTech business case and reality because your users did not fully adopt your solution.

In my opinion, this is why we’ve seen the market explode from a few dozen solution providers in 2015 (with most attention and dollars going to core Source-to-Pay platforms) to 400+ solutions in 2024.

Broadly speaking, there’s a value gap left behind by “legacy” ProcureTech.

Intake Orchestration and best-of-breed, niche solutions (spend analytics, sourcing, contract management, tail spend management, Post-PO workflow management, etc.) appeared to fill this gap.

So why wouldn’t we simply build the business case for a new project based on this gap?

1. Take your initial Source-to-Pay Suite business case

2. Measure the delta between your estimated and actual benefits (assuming reality fell short of theory)

3. Identify the shortfalls that can be associated to low user adoption

4. Use this delta as the basis to justify your new ProcureTech project

Pretty simple right? Sure, on paper… (that’s the organizational history part)

The hard part?

The organizational humility…

It takes a special kind of organization to admit to themselves:

1. “We had missing assumptions around user adoption in our initial business case.”

2. “We think that by solving for these assumptions, we can realize the missing value.”

3. “The business case is less attractive than for the initial ProcureTech investment but it is still worthwhile.”

If you’ve been cultivating a culture of continuous improvement where leaders recognize that failure is inevitable (and even desirable) on “the way up the maturity curve”, then this might just be the lightbulb moment you’ve been looking for..

What do you think? Is it viable to build a business case on the value left behind due to faulty assumptions on a previous business case?

Let me know in the comments below 👇

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