Any procurement organization undergoing procurement transformation needs to make important decisions on the type of software they use.
The eternal question – what is the best route? Should I go for an all-in-one full-suite procurement solution that delivers end-to-end services or a combination of best-of-breed applications? This was the dilemma facing the Boliden Group, a leading mining company based in Europe, and this is how they solved it.
Founded in 1924, Boliden is a high-tech mining company employing 5800 experts across the Nordics and Ireland.
The goal: a full-suite solution for procurement
An all-in-one procurement software solution, one that covers everything from spend analytics through to contract management has its attractions for any corporation: a single platform, centralized data repository and one key vendor to manage. It could suit enterprises that have immature procurement processes; they can make a one-off move into the digital era with limited risk. The Boliden Mining Group already had a procurement system in place, but it was not working optimally, causing frustration for the end-users and showing poor compliance. It was not being used as intended and attempts to increase adoption rates were met with limited success. The main challenge was to satisfy all stakeholders, and this was not happening. Boliden realized that instead of endless training and change management, in order to achieve their corporate goals and wide user adoption, they had to implement technologies and platforms that the business users would love to use.
Approaching the market
When confronted by the choice of refresh or replace, they decided to approach the market with a Request for Proposal (RFP). Boliden needed both a spend-analytics solution and an source-to-contract facility. The RFP delivered a variety of options: stand-alone procurement modules, collaborations between two or more solutions providers and full-suite packages. They needed a solution that:
- Is intuitive and easy to learn
- Has a user-friendly interface
- Speedy to implement
- Is flexible enough to suit different locations and divisions
They discovered that niche service providers can offer a depth of experience in their market segment that is not often matched by all-in-one systems. They also found that some of the leading full-service providers were not able to meet their criteria in some of the functional areas. Should Boliden choose a combination of one or more best-in-breed suppliers to provide the most effective and innovative answer to their problem? It could be the best of both worlds.
Usability and flexibility
Ease of use is one of the most requested features of procurement applications. Experience tells us that if users are irritated by an application that is not working for them, they will stop using it and find another way. Best-of-breed solutions can deliver the end-user with a friendly interface that is not influenced or determined by an overriding concept or design. Specialist service providers also have the agility to update their offerings more flexibly as technologies evolve. Customers have the benefit of being exposed to tried-and-tested applications which in turn allow them to get ahead of their competition.
A collaborative solution
It became increasingly clear to Boliden that two of the best-of-breed solutions providers, if they could work together, would provide the answer to their needs. Each specialist partner would adopt the latest techniques using artificial intelligence (AI), machine learning and other tools to provide a seamless experience for the user. Boliden expected that a collaboration between expert software solutions providers each in their own area of expertise would deliver the right result.
To establish which best-of-breed companies could deliver on their capability claims they requested a Proof of Concept (POC) mini project. Viewing sales demonstrations was not enough. For spend analysis, they required the bidders to perform a real-time data cleansing project on their “dirty” data. Also, and importantly, they involved the end-users in the source-to-contract decision by allowing them to have a hands-on trial of the options.
“We wanted users to be able to put their
hands on the keyboard to try out the
system before we committed”
- Andreas Bivall, Boliden
Based on the success of the in-depth trials, Boliden chose to go with the partnership of Sievo and SCANMARKET.
The devil is in the detail
Boliden had some experience of working with digital solutions so they were fully aware of the challenges ahead. They asked their chosen suppliers to work together and assist them on their implementation journey towards full user acceptance.
Spend Analytics – Sievo
As expected, there were some internal challenges to assemble the historical spend data. Sievo assisted with this process and then performed an exercise on the raw and “dirty” data to prove their capability.
Source-to-contract – SCANMARKET
Similarly, the collating and bringing in of the transactional procurement history took some time. SCANMARKET worked directly with the Boliden team to import the information into their system. The entire process of implementation was successfully completed within six weeks, but users were already actively using it earlier.
What can we learn from Boliden’s experience?
Andreas Bivall, Head of Procurement Development and Group Categories at the Boliden Mining Group says his number one recommendation is to physically test out the proposed system. i.e. try-before-you-buy. Sales demonstrations do not always relate directly to your specific needs and detailed requirements may be glossed over.
“Our approach was to put real effort into The Proof of Concept
to make sure the system worked the way we wanted”
- Andreas Bivall, Boliden
He also recommends having a reference group of users to be involved in the final buying decision. Andreas states that the result of his POC mini project was the defining moment. Another success factor is that they chose two market leaders with clear track records in their respective segments. Each company offered extra support in terms of onboarding, data integration, and training.
Boliden will continue to innovate and apply other digital solutions in other parts of their business working with companies like Sievo and SCANMARKET.
Some reasons to opt for a best-of-breed solution
Specialists in their niche:
- have more depth of understanding in their area of expertise
- can respond quickly to changes in the market
- implement and update more efficiently
- are more agile and able to innovate
- provide advice and share knowledge
Navigating the bewildering array of possible solutions
There is an ever-increasing number of digital applications and systems to solve your procurement automation needs. How do you determine the best approach for your business? Full-service procurement solutions are often individually developed modules that are packaged together for marketing purposes. Although many of the modules in an all-in-one system may suit the overall purpose, others may lack the sophistication and level of performance required. Boliden decided that a combination of two best-of-breed solutions would suit them best rather than a pre-packaged solution.
Photo credits: Boliden.com