JAGGAER celebrates 30 years in business this year. We asked Michael Roesch, Senior Vice President Global Direct Advisory at JAGGAER, about the development in project implementation that he has witnessed over three decades.
Q. How can a project get off to a good start?
Michael Roesch: Management alignment on the customer side, having an executive sponsor (a driver) and clear objectives about where the project should go, a North Star, is extremely important to set up a project for success. This has proven to be extremely effective.
Years ago, we did things differently: In many cases we focused more on a technical scope. Business outcomes are the key driver for projects these days.
To get in a position to guide customers, trust and expertise is needed. Based on our track record of thousands of successful implementations it is much easier to get into this trusted advisor position.
In short, while a specific solution may be technically possible, and excite the customer, it isn’t necessarily going to meet the customer’s business objectives. Being customer-centric often means steering things in the direction that will deliver the best results, the best value – and that is not always immediately apparent to the customer.
Q. What kind of mistakes are to be avoided?
Michael Roesch: Here in central Europe, we like to say, “Watch out that your appetite doesn’t grow with eating.” By that we mean, on an implementation project it is best to avoid constantly bringing in changes, extensions and so on, to squeeze even more into a project, even if it doesn’t fit. Time to value is paramount!
Digitization involves taking many small steps. There is a constant cycle of build, measure, learn, which leads to continuous improvement. You finish one optimization loop and immediately go into another. The market and your organization are moving fast, and you need to adapt constantly. But what we often see is that companies set up a budget and say, “So now we’re going to do it right.” They think that if they throw enough money at the project, all their issues will be settled, and it is a one-time effort.
My clear recommendation is to release an early version quickly and to allow time and money for optimization loops afterwards. Measuring success on a regular basis (e.g., monthly) and finetuning accordingly, with the help of experts, pays off and helps to achieve maximum value and ROI.
Q. How has the approach to implementing software solutions changed over the last three decades?
Michael Roesch: Three decades ago, the approach was to get everything done in one shot. But it’s difficult to envisage a perfect system in advance, so projects often went in a direction that was not optimal, with no time or budget reserved for optimizations.
Today the approach is more iterative. Implement, then make minor optimizations and adapt the software to the customer’s needs. The human element has also progressed together with this innovative approach. Change management was certainly not as good in the past as it is now, and change management is key to implementing solutions that maximize added value.
End users are now involved earlier; they have a say; they can raise their hand if they think a solution is better or worse or could be different and they can do so immediately. This trend has certainly intensified in recent years.
Procurement is, of course, focused on negotiation and in the past customer project teams did not have the right stakeholders involved (e.g., IT, PMO), so projects were often conducted as a buyer-seller negotiation. Today’s project teams are set up much better, and everyone is focused on success criteria and business outcomes. This builds more trust, and it is becoming more of a business partnership with joint objectives.
Therefore, it is so important to define success KPIs clearly. This makes a project so much easier for everyone involved.
Q. What technological or methodological trends have had the greatest influence on implementation projects?
Michael Roesch: We now have significantly more collaborative options with modern technology such as MS-Teams and artificial intelligence. Co-Pilot, for example, has further improved collaboration. In the past someone had to write down minutes and circulate them for approval, maybe long after the meeting itself. Now, in principle, artificial intelligence does it, which has delivered a great increase in efficiency.
From a methodology perspective, many have tried to start so-called agile projects. This puts the emphasis on continuous releases that incorporate customer feedback. The ability to adjust during each iteration promotes velocity and adaptability. But in many cases procurement projects are not complex enough to warrant an agile approach. Yes, you must execute in an iterative way and stay adaptable. But most projects (big and small) are still handled using the waterfall approach, which follows a set path with limited deviation. Slicing a project into smaller chunks and constantly measuring success based on well-defined criteria, has proven to be best. Time to value is paramount!
Q. How have customer expectations and requirements developed over the years?
Michael Roesch: The focus on added value has shifted: both hard and soft savings. Customers increasingly have the business case for introducing a solution calculated and this is extremely good in my opinion. It is especially important because if you convince the CFO, you also get the budgets that are needed to ensure a successful project.
In the past there was less understanding of what a SaaS solution can and should deliver. The whole industry was simply not mature enough and customers and vendors just tested many different things. This value-based approach is state of the art. Achieving 500% ROI is the sweet spot for SaaS, which, of course, also brings clarity to every project.
Q. What can JAGGAER customers expect going forward?
Michael Roesch: Customers can expect that we will always use the latest and greatest technology and do the best and most amazing things. Today all the talk is about artificial intelligence. Everyone wants to know what you do and how you do it and many are talking about it. And sure, JAGGAER is investing in AI and already offers some advanced solutions.
JAGGAER is the only procurement provider named in the Gartner Hype-Cycle for AI. This alone shows how important this topic is for us!
But we can’t yet say so clearly what this technology will bring in the future for procurement. Nearly all customers express interest even when they are not yet at that level of maturity. What they appreciate is a vision and a strong roadmap that will move them up a level or two.
Of course, you get a rather different impression if you rely on opinions and expectations that are shaped by social media, LinkedIn, marketing etc., where every solution provider is pushing the topic. By contrast, customers who have their feet on the ground are most interested in asking what really benefits them now and what the tangible outcomes look like.
In general, we are often too much influenced by these hype topics when rather more common sense is needed.
Q. What challenges typically arise during implementation and how are they addressed?
Michael Roesch: Well, the classic one is, of course, a mismatch of expectations. The customer comes away from the sales phase with certain expectations that are not fulfilled. This inevitably brings the customer down and they say, hang on a minute, I imagined it differently.
The answer to this challenge is communication: back and forth as much as needed, and reducing time to value as much as possible; learning from mistakes and then optimizing. Large enterprises such as Proctor & Gamble have institutionalized this approach. Their paradigm is “win fast & fail fast”. If you do things fast enough it is not such a problem if you fail, as long as you learn from it. Companies that drag out projects are at a disadvantage because they achieve no added value, which means that in the end, they lose time and money.
That’s why clear goals are so vital. Quantifiable outcomes can only be achieved if everyone is focused on the “North Star”.
If you do this, you can move fast and to underline the point, digital transformation is best done in many small steps, generating more, learning from it, and optimizing repeatedly. This is what successful companies do.
Q. What progress has been made in terms of efficiency savings?
Michael Roesch: That’s the most important question for mature organizations! The sweet spot for SaaS is around 500% ROI. But we also see companies achieve more than 2000%. Their question should be: how can we buy more of it?
We see organizations grow quickly but keep headcount stable by leveraging our tools. This delights us because we can see the value we create for those customers.
Measuring it and talking about it is very often a revelation. Customers are more than pleased with what we deliver for them. In these hectic times, sometimes we forget to look back at what we have achieved together. This proof point helps us to learn from it and plan for new investments.
Companies that move in the direction of autonomous commerce don’t, however, rationalize people out of the picture. They automate the low-level routine activities. People can then focus on strategic tasks. Our software solutions thus make procurement a more interesting and rewarding place to work.
The solution is highly integrated and connects not only with your ERP systems, but also with suppliers, and there you have so much potential for increased efficiency. But that’s now ancient history. Fifteen, twenty years ago, you might have had trouble convincing suppliers to onboard. Now they see the benefits.
Standardization has also brought benefits. Many customers want to define their own standard, but inevitably the market standard will win out because the entire supplier base can then connect very quickly (e.g., via EDI). Overhead costs are reduced, so they become more efficient and of course they prefer to have a one-time expense to connect somewhere for the entire life cycle and then work in a highly automated and integrated fashion. This is exactly where we want to go, and where our software also helps.
When you add in all the other new demands in today’s procurement function, such as risk management and ESG, you simply cannot do it without powerful software and adherence to standards. There’s so much data to process. That said, implementing software is only part of the story. You must connect the data intelligently if you are to get the full value.
Q. What other positive developments have you seen over the past thirty years? How would you sum up?
Michael Roesch: On the customer side there is a much stronger desire to engage and collaborate. In the past procurement might say, “This is what we want” and then hand over to IT to work with the vendor. Today it’s a more collaborative process before, during, and after the project. Typically, the teams will include a sponsor and representatives from both procurement and IT, and perhaps other stakeholders. The project does not end abruptly with rollout because they work together to ensure that the solution is always up to date, functions well and is developed further.
Our strategy and recommendation are always that the customer has a very precise change management and rollout plan, whereby they define goals and track progress towards those goals systematically. We are happy to help with that, to support the customer on steering boards or quarterly business reviews.
No JAGGAER project has ever failed because of technical issues. If projects failed in the past, it was due to soft issues, when people didn’t get along or couldn’t work together. If the stakeholders can work well together, we will always find solutions, and on a technical level, there is almost always a solution. Today, thirty years on it is more than ever soft skills that lead a project to success. And that includes how we ensure quality during implementation and user adoption afterwards, with clear KPIs and regular measurement.
What I can say now, without hesitation, but could not say 30 years ago is that we and our partners have a sophisticated project management methodology, which has been independently validated, audited and reviewed by external experts. It is no longer complicated; it is a process that runs in a similar way every time. It has become common business practice.
The project management methodology that we as JAGGAER and our partners have developed over 30 years is constantly being fine-tuned and expanded to meet customer needs better than ever. It is so mature and sophisticated that customers can place themselves in our hands with a clear conscience.
For further insights into a JAGGAER implementation project, read this success story about Franke Group.
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