When a company makes the decision to implement compliance software, the steps they take at the very beginning of the process are likely to determine whether they end up with the right technology. Procurement’s strategic sourcing process provides an effective methodology for identifying, comparing, and selecting a vendor, but it cannot be effective without a solid foundation of objectively set specifications and requirements. Without the right process and inputs, regret is just around the corner.
All software selection projects require care, but compliance software must meet far more specific enterprise needs than most. As a result, the requirements documented at the start of the sourcing process will be highly specific to the purchasing company. No cookie-cutter or one-size-fits-all approach will do. While the end goal of the sourcing process is to select a compliance software vendor, the first – and most important – phase of the effort is purely internal.
If your company has an experienced procurement team, they will be very familiar with the following three mistakes. Perhaps understanding more about why they are so important will make it easier for the team to select the right compliance software and avoid future buyers’ regret.
Don’t let a vendor tell you what your requirements are
Sometimes a software vendor finds you and your team before you know you need what they are offering. If the sales rep is effective, they will make your internal business case for you. While this can be very helpful and save lots of time, you can also be sure they are focused on positioning your ‘need’ in alignment with their solution’s sweet spots. If your company happens to need something that their compliance software doesn’t do (or do well), that certainly won’t be pointed out in the business case. You won’t find out until late in the implementation process, or even months post-implementation, that there is a gaping hole in their functionality. Always start with a blank sheet when drafting software requirements. Vendors may play an important role, but they can’t effectively represent your interests and theirs at the same time.
Don’t define your requirements based on a ‘preferred’ solution
Even when a supplier doesn’t pave a path to their own door, someone internally may have pre-selected the ‘best’ compliance software solution. This is especially likely when procurement isn’t involved early enough in the sourcing process. Having a ‘preferred’ solution when you are trying to source new technology has much the same effect as ‘anchoring’ in negotiations. Once a list of features is on the table, it is hard to escape them – even in favor of something much better. Just like a supplier who ‘helpfully’ ties your hands by putting together your business case, defining your requirements based on any existing solution artificially limits the ROI of the solution and may lead to the wrong solution being selected. Blue skies thinking will both ward off regret and also prevent participating vendors from recognizing a competitor’s feature set in your RFP.
Don’t be afraid to confront concerns up front
No modern enterprise technology creates value in a vacuum, and people and processes are always closely related to software decisions. Being constrained by suboptimal or non-objective requirements will lead to future regret, but so will failing to face up to problematic internal conditions. Some business issues cannot be solved by technology alone and have to be addressed by the team. The sooner they are addressed, the sooner issues can be resolved. Then the deck can be cleared for a more transparent evaluation of needs, not to mention an actionable understanding of the total change management effort. Kicking the can down the road will lead to a poor fit between process and technology in addition to inevitable regret.
Everyone is always in a hurry these days, and time pressure certainly seems appropriate when conduct risk or financial and regulatory compliance are on the line. ‘Slow is smooth and smooth is fast,’ as the saying goes. If the objective is to end up with the right compliance software, fully regret-free, then the best investment is the one made up front. Starting the evolution process with the right set of requirements, drafted independently from undue influence, is the best way to avoid regret. Procurement is schooled in all of these processes, as well as the reasons behind them, and knows all too well when the warnings above aren’t heeded.
We hosted a webinar recently about the topic that contains lots of insights from Kelly Barner and Keith Pyke on how to work with procurement and best ways to source a compliance technology for your firm. You can watch the webcast here.
About the Author
Kelly Barner is the Owner and Managing Director of Buyers Meeting Point and MyPurchasingCenter. She has held numerous roles in procurement over the last 17 years. Since 2009, she has covered procurement news, events, publications, solutions, trends, and relevant economics at Buyers Meeting Point. Kelly is also the General Manager at Art of Procurement and Business Survey Chair for the ISM-New York Report on Business. Kelly has her MBA from Babson College as well as an MS in Library and Information Science from Simmons College and she has co-authored three books: ‘Supply Market Intelligence for Procurement Professionals’, ‘Procurement at a Crossroads’, and 'Finance Unleashed’.