5 Tips for Tool Rollout to Harmonize Processes and Increase Compliance
Establishing compliance in your procurement efforts isn’t easy. Team resources are stretched, regulations change frequently, and new leadership might shift priorities even further. Depending on your industry, you may face significant industry or governmental regulation. To top it all off, many organizations lack actionable or accurate data. So how can you unify your processes and increase compliance in your organization?
Rolling out new technology can be the perfect opportunity to establish new compliance standards across your organization, and really bring your team together to rally around this common goal. As you shift organizational processes to a new solution, it’s important to take the opportunity to improve compliance, too. We’ve put together five key steps that every CPO should be putting into practice in a new tool rollout in order to improve compliance across the organization.
1. Define Compliance
To start, you might find yourself wondering what compliance even means in this context. Well, at its most basic, compliance just means that you’re following the rules. What those rules are can vary greatly depending on where you are in the world, how large your organization is, and what industry you operate in. For example, an organization operating in the public sector might have more requirements to comply with.
More than that, though, procurement compliance specifically can often mean reaching a certain level of on-contract spend, tier one supplier spend, or supplier performance. Dynamic discounts or early payment bonuses could be on your compliance list, too. Ultimately, it’s on your organization to define what’s important to you (and, of course, what’s required of you by third-party groups).
At this point, you don’t have to get into the weeds with specific measures – we’ll get to that later – but identify the critical points you want to measure and improve on.
2. Set a Baseline
Once you’ve defined what your compliance priorities are, it’s important to take an honest look at where your organization is starting from. Start by considering business-critical or legally required compliance items. These are the items that impact your ability to do business at all. Are there government requirements that you’re failing to meet? Are you making necessary payments on time to your suppliers?
Once you have the critical items set, take the opportunity to measure your other compliance metrics. Don’t forget, it’s equally important to look at supplier contracts to ensure suppliers are meeting compliance standards and performance metrics. It’s going to be a challenge to make significant progress if your suppliers aren’t matching up to your standards, so supplier management will be a major part of your benchmarking.
3. Clearly Define your Success Metrics
Identifying where you stand today is all well and good, but only insofar as it helps you build a path to the future. The next step is one that’s essential in any business project – defining success. What are your measurable, defined goals that you want to achieve as you improve your compliance?
To start, identify specific regulations, directives and guidelines that you know apply to your business. Decide on a concrete improvement metric. For example, maybe you’re currently making 90% of payments on time. Set a goal to improve that – maybe 95% or 98%.
It’s also crucial to set reporting schedules for industry or government regulators, internal stakeholders, investors, and anyone else with a vested interest in your performance. Commit to a regular cadence – quarterly, twice yearly, or whatever works for your business – and put together a clear plan to achieve that.
Some goals, like organizational transparency, risk mitigation, or supplier relationships might be less quantifiable at first glance. Work to set metrics for these that will give an accurate impression of performance. For example, you might set goals for the number of supplier support calls, on-time delivery, or security incidents. Use these as more quantifiable proxies for your overarching goals to better measure progress.
4. Choose your Solution
Ideally, tool selection will be an obvious step in the process. While choosing the right provider is a much larger topic, you should be factoring in compliance requirements throughout the selection process.
Various procurement solutions will always tout certain levels of compliance, whether that means compliance tracking and auditing, advisory teams to guide you along the way, or automated compliance measures built directly into the platform. It’s important to be aware of the differences here and to know what level of solution support you need. Do you already have an expert in-house who can keep tabs on compliance, or do you need a little bit more guidance? Is there something more strategic that person could be doing? If so, you could probably benefit from an increased level of automation, especially when it comes to complicated, highly regulated areas like global eInvoicing or contract management.
5. Develop Timelines
Of course, any good project management approach requires deadlines. Without them, nothing can be prioritized and nothing is ever finished. But these deadlines shouldn’t just be tied to the tool implementation itself. While that might be the focus of the project from a tactical perspective, you should set independent timelines for the compliance improvements you previously mapped out.
One key point is to make sure that these deadlines are realistic. Pushing for unreachable timelines can cause your team to miss their goals and get discouraged, dooming the project to failure. Consider using a common project management framework like SMART – specific, measurable, achievable, relevant, and time-based.
Naturally, once you set these deadlines, stick to them. Find ways to incentivize your team to meet their deadlines. A clear project plan independently of the implementation efforts can work wonders.
Decide What’s Best for You
Ultimately, every organization will have different compliance needs and different bandwidth to meet them. These steps are only meant to serve as guidelines as you push your team toward more complete compliance. Decide what your most urgent needs are and place focus there. But don’t underestimate the implementation process as an opportunity to set a new standard for procurement as a whole. JAGGAER is here to help at every stage of the procurement process. If you’d like to speak to an expert about getting started, contact us today.