Selecting the correct Vendor Management System (VMS) solution for any organization is always a challenging process. The considerations are many and diverse, originating from a number of functional areas within the organization including HR, procurement, IT, and finance. Ensuring that the chosen solution drives value for every one of these constituencies is obviously the focal point of the selection process. Yet, there are often conflicting concerns and requirements which can complicate the process. What can be done by way of planning to ensure a smoother VMS selection process and minimize friction between the respective stakeholders?
There is consensus at the outset that a VMS tool is necessary and all stakeholders agree that there is value to be unlocked by implementing supply chain management solutions. Harmonizing the disparate needs and challenges presented by stakeholders across different functions can be achieved by focusing on the threads of commonality that are woven through the fabric of the organization by the right solution. Identifying these threads of commonality and then conveying how the solution addresses them for each group is the key to gaining “buy-in” from all parties. Here are two critical commonalities that will go a long way towards harmonizing expectations and convincing each party of the value.
Business Process Management Expertise
When building the RFP for a VMS solution, make sure to include questions surrounding the providers’ ability to focus on business process management. Make sure all stakeholders understand that the VMS technology championed either by HR or Procurement is not a magic box that, once “switched on”, miraculously heals the damage caused by broken, risky, or even non-existent business processes. Make stakeholders aware from the outset that a best-in-class VMS solution provider should offer business process management expertise in addition to technology. The questions each stakeholder contributes to the RFP should focus on how the VMS vendor intends to address the business processes relevant to their respective function. Will the vendor perform discovery prior to implementation to fully document the “as-is” state of operations? What are best practices for identifying broken/improper business practices and how does the solution mitigate them as part of implementation? All these questions then tee up another critical step in navigating the VMS selection process: Change Management.
Low user acceptance is behind the vast majority of failed VMS implementations. Outside of the champions of any VMS project (whether they are in HR or Procurement), the rest of those impacted by a new implementation may not be gung ho and ready to participate at full strength. There is always a degree of resistance and at times ambivalence about any new solution, particularly if it is perceived as being “foist” upon those being asked to participate. For this reason, it becomes extraordinarily important to query a would-be vendor about their change management strategy. A strong VMS provider will have encountered a wide array of challenges through the experience of having implemented their solution for a wide array of companies. They will have heard and learned to overcome all manner of objections, arguments and rejections.
In order to effectively foster change that all corners of the kingdom can agree to, the provider will have to be able to sufficiently convey a value proposition specifically designed to address the pain points and challenges of each functional area. The large-stroke benefits of VMS may resonate with HR, but the IT leader still only sees the potential for increased workload without corresponding benefit. The CFO will only look at the capital outlay if he or she is not briefed on the auditability a VMS provides and its impact on cost avoidance and risk mitigation. A solid change management strategy, complete with communication plans and clearly articulated value propositions is a prerequisite to success. Make sure your RFP contains questions about the vendor’s change management capacity.