We’re often bombarded with marketing from procurement tech companies, telling us how their product will enrich our work lives.
And while all of us here at Procurement Software are convinced that digital procurement is the future, we would be foolish to ignore some underlying traits which these procurement tools can’t fix.
This article looks at team, organisational, and business culture. All of these may scupper efforts to implement digital procurement initiatives.
In the past, we also covered 10 digital procurement transformation mistakes to avoid when formulating and executing a project.
But first, let’s have a quick recap on the benefits of going digital.
What are the key benefits of digital procurement transformation?
Digital procurement transformation delivers five key benefits:
- Improved Compliance: Automation tools streamline processes, reducing deviations from procurement policies.
- Reduced Workload: Tail spend management software automates supplier scouting, quoting, and negotiations.
- Enhanced UX: Digital tools focus on creating seamless experiences for suppliers and stakeholders.
- Cleaned-Up Spend Data: Spend analytics software transforms messy data into actionable insights, driving better procurement decisions.
- Mitigated Risk: Advanced risk management features in procurement software help identify, assess, and mitigate potential risks from suppliers, ensuring compliance and security across the supply chain.
So now, let’s turn our attention to where technology can’t make a positive impact, or where underlying issues can scupper an otherwise good project.
10 Things that Digital Procurement Transformation will never fix
This isn’t an exhaustive list, but should get your mind thinking around some of the cultural and organisational challenges you may face.
1. No vision of the “why” driving digital transformation
Embarking on a digital procurement transformation without a clear end goal will only lead to disappointing results. Implementing legacy software simply because a research firm has labelled it as a top contender or placed it in a prestigious quadrant is shortsighted.
Software alone won’t solve your problems.
Ask yourself: where are you truly struggling?
- Are stakeholders disengaged with procurement?
- Is your team bogged down in administrative tasks?
- Is your production suffering because contracts and vendor data are scattered across systems?
Before engaging with any software vendors, pinpoint your most pressing issue. If you don’t, vendors will happily tell you their solution is the perfect fix — a claim we know is often far from the truth. If you’re unclear about what you need, a savvy salesperson will see that gap and exploit it to their advantage.
2. Procurement team capabilities
It’s time for a harsh reality check. If you’ve got a team of average performers who are closed minded when it comes to up-skilling and embracing new technology, you’ve got a choice:
- Either invest a LOT of time and effort in developing mindset and cultural shifts
- Or acknowledge that you’re going to have to replace a significant portion of your organisation.
The latter is easier said than done in somewhere like Europe, where labour laws make it very difficult to restructure teams quickly and efficiently.
If you have a team with great potential but they’re bogged down by operational firefighting, that’s a different situation. In this case, they likely just need some coaching and development. It could also help to expose them to examples of how procurement digitisation has been successfully implemented in top-performing organisations
3. No investment in Procurement learning & development
Building on the previous point, if your organisation isn’t willing to invest in its people, success will remain elusive. It’s one thing to recognise capability gaps; it’s another entirely if your company refuses to invest in closing them.
Hiring new talent is far more costly than up-skilling your existing team. If you’re finding yourself in a battle with the CFO over training budgets, it’s time to stand firm. Make your case. Explain the business benefits of investing in development.
Cancelling training budgets is one of the most commercially short-sighted decisions a leader can make.
But it’s not just about money.
If your L&D budgets are limited, think creatively. You don’t always need traditional training providers to develop your team. Encourage them to follow podcasts, YouTube channels, and newsletters that focus on skills for the digital procurement era.
Provide them with reading lists of insightful books to help them understand the macroeconomic and geopolitical trends shaping procurement and supply chains today.
4. Lack of mandate for procurement
Any procurement veteran has likely encountered this challenge.
At times, we simply don’t have the mandate or influence within the organisation to drive meaningful change.
Whether the issue lies with procurement leadership or broader company culture depends on the organisation and its people. It’s usually a mix of both to varying degrees.
The key is recognising when this is the case and not beating yourself up over it. Pushing for a digital procurement transformation in a company where procurement lacks a strong mandate is unlikely to succeed.
Instead, take small, measured steps. Build relationships and allies within the organisation, especially if procurement is decentralised and local teams have full autonomy over how they source and manage their budgets.
5. “We’ve always done it this way” company culture
Closely linked to point 4, the “we know better because we don’t know any better” mindset is a deeply ingrained culture that’s tough to change overnight.
It’s important to recognise what you can and can’t influence when dealing with a broader cultural issue. You can start shifting mindsets within your own team, but if you’re trying to force digitisation onto a company steeped in tradition, especially when senior management believes they know best, you’re setting yourself up for failure.
The key is to build alliances slowly and secure small, incremental wins. While it can be frustrating, this is the only way to gradually steer the organisation in a new direction.
6. Procurement KPIs are misaligned with those of the business
While points 4 and 5 address broader cultural issues, the good news with this one is that it’s much easier to realign.
The root causes typically come down to two main factors:
- The business doesn’t fully grasp the broader value of Procurement beyond supplier contracts and price negotiations.
- A CPO’s ego is hindering the organisation’s ability to make a greater impact.
The first issue is often a PR and internal communications challenge. It involves lobbying the CFO to refocus targets on the deeper value that Procurement can deliver across the business.
The second is a mindset issue. Is the CPO chasing headline results to advance their career or are they genuinely invested in becoming a valued business partner?
Without aligning Procurement KPIs with the wider business, launching a digital transformation is a futile exercise—unless, of course, you’re only looking at spend analytics or e-sourcing tools. In which case, these are less critical in this sense because their user base is mainly Procurement teams.
7. Poorly communicated procurement processes
It’s always surprising just how badly written so many procurement processes are.
Let’s be real: people are busy. They won’t waste time slogging through a 20-page PDF filled with legal jargon or procurement-speak.
Instead, they’ll bypass the system and go down the maverick spend route—it’s far easier than trying to figure out how to make a compliant purchase.
If your procurement process is more than one page, it’s too long.
Keep the essentials concise and direct. The rest can be referenced elsewhere.
The goal is for over 90% of your organisation to easily understand how to initiate a purchase request, without stumbling through ERP or outdated P2P software.
If you want to drive digital procurement transformation, you need to think like a marketer when communicating internally.
Don’t know how to? Talk to your Marketing team—they’re pros at this stuff!
8. CFOs who only recognise PPV savings
I’ve been there.
Dealing with a stiff, unwavering German financial controller that point-blankly refused to acknowledge any saving that wasn’t 100% traceable to P&L.
There are two things you can do here.
- Build allies to get them to change their mind
- Accept that certain types of procurement technology will be very difficult to get budget for and to implement with a senior leader who has this mindset.
This one is very similar to point 6. It’s more of a longer term influence and persuasion challenge, rather than a quick fix.
9. Rigid, inflexible procurement governance
I’m a strong advocate for pragmatism over process, every time.
However, not all organisations share that view. This is especially so in more regulated industries or in cultures with rigid, rules-based structures.
Digital procurement transformation thrives when technology is used to guide and enhance processes. It struggles when it’s confined by inflexible, outdated procedures.
Technology is evolving rapidly, and trying to force it to fit into a traditional, rigid framework is a recipe for failure.
It’s understandable to require processes and controls to mitigate risk. But attempting to make technology fit perfectly within this rigid structure will present significant challenges.
10. Toxic work environment
This one ties into points 4, 5, 6, 8, and 9, which we’ve already discussed.
Software won’t fix deep-rooted cultural issues within an organisation.
If Procurement isn’t respected, mandated, or properly invested in, no technology will change that. It could even make matters worse.
So, does your organisation show signs of any of the issues we’ve covered?
If so, before talking to software vendors or initiating an RFI, the first step is to address these underlying problems.
Focus on creating a strategy to overcome or mitigate them, ensuring they don’t hinder your digital procurement transformation efforts.
Conclusion: Should you invest in procurement tech?
In conclusion, while digital procurement tools offer significant benefits, they can’t solve underlying organisational, cultural, and team-related issues.
Success in digital transformation depends on addressing challenges like poor communication, misaligned KPIs, outdated processes, and a lack of mandate or investment in procurement. Before investing in technology, it’s crucial to first recognise and tackle these obstacles.
A strategic approach that focuses on building the right culture, mindset, and team capabilities will help ensure that digital procurement initiatives succeed in driving meaningful, long-term change. Only then can technology truly enhance procurement processes and create sustainable value.
