75% of end users say a better pool of approved suppliers would help reduce maverick spending, according to a 2018 Hackett Group survey. Maybe it’s time to ask ‘why?’.
I had the privilege of moderating a panel discussion in conjunction with Business Development Institute (BDI) last week in Washington D.C. on the topic of next generation finance and procurement. Around 20 purchase-to-pay leaders from large organisations gathered in a room to discuss digital transformation and its impact on their world, as I facilitated the conversation. As part of that discussion, one of the panelists said something that immediately struck a chord with me. He said, “You always have to ask ‘why?’.”
Why Ask Why in Purchase to Pay
For some context, this Director of Finance was referring to better decision making and helping employees procure what they need to do their jobs, while still driving procurement initiatives like cost savings and compliance. But throughout the discussion, I jotted down notes on other scenarios where we should start asking “Why?” in purchase to pay. Here’s what I came up with.
5 Reasons to Ask Why in Purchase to Pay
To apply a uniquely human talent: In a world of increasing automation and reliance on technology, we cannot forget to summon our own human abilities. The panelist elaborated more on his statement after the session, pointing out that the ability to ask “why?” and apply the answer to that question alongside data is one of those uniquely human skills that will always be in-demand.
By no means am I de-emphasising the importance of capturing, visualising, and examining 100% of your financial data. Data shows us a clear picture of what’s happening, points to some areas for root cause analysis, and can even predict what’s going to happen next. But it takes the discernment of a human mind to go beyond data interrogation and ask the other humans involved ‘why?’ The answer may result in a completely different decision than would have been made with sole dependence on the data, as seen in the example in our next reason.
To increase user adoption: We’ve said it a million times before, but the number one critical factor in reducing maverick spending and getting people to use an e-procurement solution is to ensure they can quickly and easily get exactly what they need to do their jobs well. The example that spawned this entire discussion came from our panelist when discussing spending trends. At his organisation, he could see a small percentage of spending was happening for a particular item that seemed out of place: thermal overalls. At face value, a procurement person may say, “We can cut that spend or leave it out of an e-catalog – it’s not being purchased enough to matter.”
But when the panelist contacted the employees placing these orders and asked why that item was being purchased, he found out that they were based in Chicago and spend a significant part of their day working outdoors. To these employees, thermal overalls are critical to a safe and more efficient work day. So, he kept the item available and the employees happy (and warm!) – a decision that might have been different if he was only looking at the numbers.
To understand a process: Automating purchase to pay brings operations and the back office under the microscope. Applying technology over a broken process will not fix the issues, so the best thing you can do, as was brought up in our discussion, is to ask “Why are things being done this way today?” and “Why should they be different?” This will likely reveal nuances in your processes that you may not be aware of – some that may be unique to your business or to your industry; some that may be a result of legacy practices that need a refresh; some that may pose inefficiency; and some that may show how automation can improve the entire work stream. Regardless of your situation, you cannot automate a process you don’t understand – so start by asking “Why?”
To build a business case: Another great piece of advice that came up in our panel discussion is to tailor your business case for purchase-to-pay automation for each stakeholder. As you’re creating the document to show why your organisation should embark on a digital transformation journey, ask “Why does this person care?” A general framework that outlines the challenges, solutions, costs, risks, and ROI is great, but then make sure you add the context for each group of stakeholders whose buy-in you need. Talk to this person or group about what they are most focused on and how the benefits will directly support those areas. For example, if you’re presenting to the CFO, demonstrate how purchase-to-pay automation eliminates manual processes that make operations costly and expose the organisation to risk and fraud potential.
To drive progress: Another topic that came up in our discussion was how to keep teams focused on achieving goals related to digital transformation. An important question to ask is, “Why are we doing this?” Each level of the organisation from the C-suite down though middle-management and their subordinates should understand the business case for moving to a digital workplace and how their roles and departments can benefit from efficiency, company cost savings, and more data to analyse. One of our panelists recommended tying Key Performance Indicators (KPIs) to metrics related to progress on digital transformation. His team has rate of automation as a KPI because in his words, “What gets measured gets done.”
Asking ‘Why’ Forces Us to Listen
Perhaps the initial statement piqued my interest so much because it forced me to pause and really absorb the discussion that followed. With increasing pressure to move faster, accomplish more, and make an impact in the business world, we are often moving in a thousand directions. But if we’re not listening to the people around us, we may be moving the wrong way. The simple practice of just asking why forces to us to stop and hear the perspectives of others and consider the outcomes from a different angle. Mapping out the larger, holistic picture of a digital transformation project will result in a more strategic approach that realises benefits faster.
Ready to learn more?
The Hackett Group conducted a survey at the end of last year that explored maverick spending. Read our report that analyses the survey responses and the ‘whys’ behind this important issue.