August 2, 2018

Preparing for ‘Digital Transformation’ Intelligently

If you were to go through the agendas for the vast majority of procurement conferences that are coming up in the next six months. You are going to find the words digital transformation repeated over and over again.

It’s understandable, marketing professionals everywhere have caught onto the fact that this is what their target market would like to talk about. At least, this is the exciting world that they would like to consider.

AI, Robotics, Blockchain, the IoT etc.

These are all technologies with a huge amount of potential. Let’s take Blockchain as an example. In the supply chain it could well end up being heavily relied upon. The potential for the consumer to view the journey of their succulent tuna steak from ocean to BBQ is going to be very seductive for large companies looking to impress discerning customers.

Being able to track diamonds from their source too will be a big help, neutering the blood diamond industry in time.

But I digress. It is quite likely that there will be a significant number of opportunities to come out of these new technologies. How many there are at this moment in time is up for debate. It’s much more than likely that we are a couple of years away from being able to implement practical AI/Robotics/Blockchain solutions in the world of procurement.

What needs to be done in the meantime?

This is the crucial question. If we are to assume that these new technologies will soon offer significant opportunities to those working in the supply chain. The question has to be asked, what is required to ensure that organisations are in a position to take advantage?

What is required, what is the base, the foundation to these technologies?

The answer is simple. Data. As reported by the Deloitte CPO Survey, it is the biggest issue within large organisation’s procurement departments. Yet, for most companies, it has always been the bridesmaid when investment has come along. It’s much easier to install a P2P solution and see clear, easily measurable ROI.

With data, the foundation to all future technologies, the ROI is not as straight forward. As such, it has been horribly neglected. Dangerously neglected if you consider the uselessness of new technologies when poor data is fed into them.

With that in mind, let’s explore the four steps to preparing your procurement function:

 

  1. Create a general strategy, this has nothing to do with ‘digital’, it’s simply about working out, with clarity, what procurements aims are in relation to the rest of the organisation and how this can best be achieved.

 

  1. Once it is clear what the department’s targets are, it’s time to go to market and explore what technologies will support the overarching plan. This cannot be done in a piecemeal fashion. Building from the bottom up is vital, data first, then building from that point, much like the foundation to a house.

 

  1. Once the choices are on the table, it’s time to select the right companies. Take your time. This is a great opportunity to discover market leading software and this can be identified with the help of use cases to find those with truly flexible solutions (workflows etc will change over time, don’t get locked in) and filter out those who are just good at marketing. Do bear in mind though, you are not just buying technology, you are investing in expertise and a long term relationship.

 

  1. Lastly, and vitally, make sure that the new solution is bought into across the department and organisation. This needs to be led from a senior level and enforced/encouraged where relevant. Far too many projects fall down at this last hurdle, don’t join that group.

 

Be practical, build your foundation first and when new technology combines with procurement expertise to produce revolutionary software, you will be ready. Ahead of the competition and drinking in the rewards that you have patiently and intelligently prepared for.

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