Mapping out an adoption plan for tail spend management

November 3, 2018

Admittedly, when we first started Fairmarkit, building adoption strategies was an area that was grossly overlooked. Our incorrect assumption was if the technology delivered on the benefits we reviewed with customers then we’d have rapid user adoption within the organizations we partnered with. We’d work with procurement executives to map out KPIs, fine tune the machine learning and automation, and upload all the necessary customer data to have the system ready to go. But this method had a much longer adoption curve than anticipated.

The customers with the quickest adoption are those that either mandate usage or use Fairmarkit to automate a majority of the process. However, for a group of customers, typically those in a decentralized model, we had to change the way we approach the tail spend management (TSM) transformation. For brief context, “decentralized” refers to end users or purchasers that are making purchases outside of the procurement department. They are usually spread out geographically or by department, with little to no collaboration across the organization. These decentralized purchasers also typically act independently and do not traditionally use strategic sourcing tools to optimize their purchases (just the trusted, old Google search). Within the context of tail spend, at several large enterprises these are the individuals responsible for making the 80% of purchases that accounts for 20% of their annual spend (tail spend).

After many onsites and phone calls, we’ve been able to boil down adoption challenges to three key problems:

A) How do I use this and will it take more effort?

B) What purchases should or shouldn’t I run through Fairmarkit?

C) Why should I use Fairmarkit?

These are all valid and important questions, and if they go unaddressed it will lead to wasted cycles and a solution becoming shelf-ware (software not being used). This is why we’ve taken massive strides and continue to improve daily with the help of our customers, prospects and advisers.

So here are my answers to the adoption challenges:

A) How do I use this and will it take more effort?

Answer: Both centralized and decentralized purchasers are already constrained by time, so offering a B2B-feeling platform is an immediate turn off. As a company, we’ve spent time and money, to provide a B2C-feel product that’s easy to use. But just because something is easy to use doesn’t mean it’ll be adopted, automation is key to reducing effort needed to accomplish the task they’ll likely performing manually.

B) What purchases should or shouldn’t I run through Fairmarkit?

Answer: For an effective rollout it’s important to address three areas. First, a clear flow chart to ensure everyone understands the processes and exceptions that have been accounted for. Second, a clear phased rollout strategy targeting waves of a user adoption based on frequency of tail spend purchases. Finally, it’s important that leaders advise their employees on exactly what categories, products or services should be pushed through the platform. To do this, we’ve developed an onboarding assessment that analyzes transaction data to rank sourcing priority based on complexity to source, criticality to the business, overall spend and historical performance.

C) Why should I use this?

Answer: This is the question that we really need to dig into with procurement leaders – what should motivate the team to complete a process change? This is important because executives can clearly define their motivators: clean data, control, analytics, cost savings, increased productivity, disadvantaged supplier inclusion, compliance assurance and several more. But how does that affect the team working in the trenches? We’ve tested several different approaches and it keeps coming back to this: make their lives easier, provide team or individual recognition for meeting and exceeding KPIs, and over-communicate that the platform is built to make them more effective employees.

Net-net: Tail spend management cannot be handled the same way you approach a normal ERP, P2P or RFP initiative. TSM has to be deployed with minimal leg work, a short timeline, and strategically enabled to waves of users to ensure an agile and success adoption.

I’ve now had the privileged of assisting with these rollouts across companies small to large. Through these rollouts we’ve found many similarities and developed new best practices, which drives the innovation behind tail spend management.

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