Is Your Procurement Solution a Product or a Service?

Is Your Procurement Solution a Product or a Service?

02/22/2018 Kelly Barner

This is the age of software as a service – commonly known as SaaS. Most literally, this means that software is delivered in ‘turnkey’ fashion and hosted centrally rather than through a transfer of license ownership with the software being hosted behind the using company’s firewall. This use of ‘service’ as a description has more to do with delivery, as software access is drawn on demand rather than being handed off like a possession.

To let the comparison between products and services end here, however, limits the total potential value derived from technology. Chances are, your SaaS solution provider also has actual ‘people’ services, some of which can be made available through consulting-style statements of work and some that are accessible as part of a user support agreement.

These services, and the professionalism and experience of the people who deliver them, has a direct effect on the success, adoption, and results generated from your procurement technology. To help you see the difference, let’s play… ‘Product or Service?’


Product or Service? – Implementation

Even the most ‘out of the box’ solution requires some kind of an implementation process. There may be messages to configure, settings to choose, or workflow decisions to make. A SaaS solution can make this process possible on demand – technically – but an experienced implementation consultant can ensure that your solution is set up right from the very beginning.

Mastering implementation has less to do with knowing how to change system settings and more to do with knowing what questions to ask about the organization’s current dynamics and processes. With an intuitive implementation guide, procurement organizations know which decisions will require the most consideration and when it is valuable to get input from other functions. And since the goal of implementation is to set a positive adoption trajectory, the more effectively completed it is, the better.


Product or Service? – Internal Adoption

Speaking of adoption… all technology has competition. Sometimes (such as during the solution evaluation process) that competition comes from ‘like’ solutions with comparable functionality. At other times (such as post implementation) the challenge comes from much simpler sources. Email, shared document services, and simple spreadsheets are all accessible and easy to use. If you’re not careful, they can erode adoption and the sustained level of use your newly implemented solution receives.

Learning to use a new solution is like drinking from the firehose. After the initial adjustment period is over, you’ll want to make sure you take a step back and remember to consider using the full range of functionality and capabilities the platform has to offer. Will the professional services team at your provider have the depth and breadth of understanding to provide training that your company’s users connect to? That’s a service you’ll really want ‘as a Service’.


Product or Service? – External Representation

There are clearly implications for procurement and their internal stakeholders when selecting and implementing procurement technology, but what about suppliers? They, too, are going through an adjustment and will realistically probably receive far less support and consideration from your company than internal stakeholders. Are suppliers considered ‘customers’ by extension by your solution provider?

Delivering a positive user experience for suppliers is just as critical to the success of a procurement platform as internal adoption. Implementation and training should take the supplier perspective into consideration – even when training buyers. The question is whether the services team at your provider is able to train your users to address their suppliers’ concerns and questions with confidence.

While the traditional SaaS differentiation between products and services is focused on delivery and access, in actuality, the line is a lot less clear. You may think of software as ‘a thing’, but without the right support and services, its value is quite limited. The most important factor for procurement to keep in mind when comparing platform options is internal and external adoption; what will increase the usage level of the technology? After all, technology with a low use rate simply gathers dust – regardless of whether it is physically sitting on a shelf where you can see it or just lingering on some remote server.

Kelly Barner

Kelly Barner

Kelly Barner is the owner of Buyers Meeting Point, an online resource for procurement and purchasing professionals. Her unique perspective on supply management is based on her time as a practitioner, a consultant at a solution provider, and now as an independent thought leader. Kelly has led projects involving members of procurement, supplier, and purchasing teams and has practical skills in strategic sourcing program design and management, opportunity assessment, knowledge management, and custom taxonomy design.