Stop compliance leaks: Why employees need to love your procurement software.

A recent survey of global CFOs identified risk controls and compliance as top concerns for 2023 — right behind cash flow. So, here’s the dilemma: finding the right balance to enforce compliant spending without slowing down or frustrating employees.

It’s a difficult balance to achieve. Consider this scenario: A procurement executive wants to improve company-wide compliance with purchasing policies, so they invest in a highly engineered, sophisticated procurement solution. After all, today’s budget-conscious climate means this could be procurement’s moment to shine! But to their surprise, spend under management KPIs don’t improve. They actually have more non-compliant spending than before.

What went wrong? It’s time to look at employee adoption rates.

Why employee adoption is crucial for procurement software.

Low adoption rates of the tools employees use to spend money undermine their value, which in turn leads to compliance leaks. It’s a classic case of verschlimmbesserung: an effort to improve things that actually makes them worse (such a great word! In case you want to toss it around, it’s pronounced fair-schlim-bes-uh-rong).

Busy employees don’t want to take the time to figure out complicated processes and are likely to take the path of least resistance when it comes to purchasing what they need. As a result, the procurement department may end up with less spend under management. And if employees aren’t following the correct procedures for purchasing, they are more likely to buy from unauthorized vendors, which can lead to quality and security risks. 

Compliance risks across a company rise further if important information isn’t shared with the correct stakeholders. For example, the IT or InfoSec team could miss reviewing a software purchase. Not following correct purchasing procedures leads to an increase in “shadow IT” — software that isn’t managed or reviewed by IT. In many companies, it accounts for about half of the software solutions used by employees. This alarming trend puts companies at risk of cybercrimes and data leaks.

Similarly, when the legal department is left out of the loop, contracts may not reflect all the protections that a company wishes to include. Early engagement allows legal to control the process and ensure that important provisions are included in documentation to conform with company policies. 

The challenges of full adoption. 

Despite the compliance risks of low procurement solution adoption, many businesses struggle to get employees on board with using the software they purchase. 

• According to Asana’s Anatomy of Work Index, the percentage of engaged users across all of a company’s applications is only 45%.
• On average, companies waste 37% of their software budget. That adds up to $30B in the U.S. alone.
• An EY study found that 52% of executives say their top compliance priority is technology adoption. 
• One study found that the total amount of unclaimed expenses in North America is a whopping $10.7B each year. While on the surface this might seem like a great way to save budget, it more likely leads to poor morale among employees who may feel taken advantage of. 

How to improve adoption of procurement software. 

It’s easy to blame employees for not following the correct processes — but the fix ultimately lies with the software you purchase. To increase employee adoption:

Integrate with existing systems. Jumping from system to system isn’t a good user experience for requestors or approvers. For example, if an employee has to request spend in one system, then route the contract to legal in another, they’re less likely to do either. A well-designed procurement system integrates with the business systems stakeholders use, like Ironclad and Jira, to ensure cross-functional compliance and collaboration.

An intuitive user interface. It’s obvious that if someone doesn’t like using a piece of software, they are less likely to use it. But UI goes beyond that: an employee spending money shouldn’t have to stress about correct procedures or policies. A smart system will walk them through the process based on rule-based policies, minimizing the risk of errors and confusion. 

Focus on onboarding. This includes supplier onboarding to ensure approved vendors are up to date within the systems. 

In a smart solution, employee onboarding should be simple, since workflows are intuitive. One Airbase customer confessed on G2 that she didn’t really need the training.

“To be honest, I didn’t pay the closest attention to the Airbase training my company had. Miraculously, that’s how I knew how great Airbase was. Without thorough training or lots of follow-up questions, I was easily able to navigate Airbase and quickly complete my task. User-friendly, smart, and simple.”

Consistency and flexibility. Employees should find a procurement solution’s UI familiar and consistent with other systems they use. This also helps occasional users follow processes correctly.

The best systems recognize that although a consistent user experience is important, not all purchases are the same. Airbase’s Guided Procurement module relies on dynamic and easily changed workflows to reflect specific policies around different types of spend.

As a result, each transaction goes to the correct teams for approval, even if that changes from purchase to purchase, but the employee experience remains the same. 

Automated, rule-based workflows. Automating processes ensures compliance with guidelines and regulations. Employees should not be confused about policies or unsure about whether or not their spending is compliant. It’s a perfect way to ensure you capture the full ROI on your software purchase. 

If employees don’t love your procurement software, they won’t use it. Find out why employees love to use Airbase. Take a self-guided tour!