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When undertaking a digital procurement transformation, the first step to building your roadmap is to set aside the technology component. When I give this advice, procurement leaders are often taken aback for a moment. But instead of jumping into product demonstrations and reading technology rankings, you must look at your ecosystem and business as a whole. This short video from our recent live webinar with AOP explains more about this first step to digitalization:
Equally important, you should complete a candid assessment of your current state vs. your ability to achieve core objectives from your vision or the North Star, as we often build with our clients. The assessment helps you avoid common pitfalls with building a business case for a digitally-led procurement transformation, including:
Missing a clear vision and action plan
Feeling overwhelmed by the rapidly evolving technologies
Forgetting the importance of process excellence and change management
You can create a successful strategy to assimilate the technology after you clearly (and objectively) address the above considerations.
With a clear purpose, you can find valuable inputs and use cases that guide the development of your digital roadmap. You don’t want to overestimate what you’ll need from a digital standpoint, but you clearly don’t want to underestimate it either. Leading organizations leverage digital technologies to drive the transformation of their procurement ecosystem. They know the importance of using a digital maturity model and technology assessment as part of their planning process. At a high-level, your roadmap development should include:
A customized journey that starts with awareness of your current maturity level and maps to your future vision
Integrated technology components within the overall ecosystem
A strategy that includes a multi-year execution plan that includes action items and key outcomes
Use cases for digital that align with existing challenges and process improvements will make the biggest impact. Many enabling tools can support procurement’s ecosystem, including:
Intelligent automation – cloud-based automation platforms, RPA, chatbots, and AI
Artificial intelligence – advanced analytics, machine learning, and deep learning
New technologies – blockchain and IoT (Internet of Things)
Below are three sample use case scenarios that help apply an intentional consideration of people, process, and technology.
Challenge: You have a small, but mighty procurement team that keeps falling behind on contract analysis. You are looking to reduce the cycle and improve accuracy.
Use Case Recommendation: Implement a machine learning tool that allows you to use terms matching as part of your contract management strategy.
Challenge: You are hearing from internal stakeholders that they are looking for an easier way to search for products without typing long product descriptions and details.
Use Case Recommendation: Deploy a natural language processing technology that supports guided buying with your organization. Consider using voice interfaces and voice search capabilities to reduce time and create a better user experience while staying on-contract with key suppliers
Challenge: Your team is struggling with direct material asset tracking across the supply chain. Also, your internal stakeholders are looking for a better way to monitor and replenish products.
Use Case Recommendation: Deploy an IoT solution that has sensors and connected devices, which can transmit data in real-time on highly distributed or mobile assets. The Internet connectivity enables connected devices to share information and aggerate data across devices to analyze patterns and conditions that can be acted upon to improve future ordering and storing of products. Now, you can keep your internal and external stakeholders satisfied.
Finding the right starting point is completely dependent on your strategy, people, processes and technology infrastructure. Further, you must align your maturity with each of these areas. Clearly, there will be issues if you identify a significant gap between your goals and your maturity level. For example, to be a digitally advanced firm with low process, and people skills and a less mature strategy is a big challenge. Internally, we say that it is like giving a Nerf gun to a Navy Seal. That doesn’t work, right? Similarly, you wouldn’t give a grenade launcher to a child – that’s extremely dangerous too. Instead, you can look at a uniform progression of each of those pillars and maturity to make sure that your people, processes, and strategy are all aligned (or close enough) to the same level as your technology strategy.
The benefits of taking this approach to drive a digitally enabled procurement transformation allow you to:
Establish a clear path to digitally transform your procurement organization
Drive maximum value toward your company’s unique objectives
Ensure procurement is a truly strategic business unit
Great procurement – regardless of your maturity level – is never done in a vacuum. Avoid getting too caught up in benchmarks or obsessing over “market leaders.” Because the best solution is always the one that solves your unique problems.
For advice on getting started with a digital transformation, listen to our recent webinar, “Embracing the Ecosystem: Building Your Unique Digital Roadmap.”
Director of Procurement and Operational Excellence
David is an expert in indirect spend management, functional alignment, supplier management, and corporate strategy with extensive experience in e-sourcing and supply-chain consulting. He has been named a Supply & Demand Chain Executive magazine “Pro to Know” nine times. As Director of P&OE, David is responsible for WNS-Denali's Procurement Shared Services and Operational Excellence and Quality Management programs. Prior to joining Denali, David was responsible for strategy and organizational development at Corporate United. During his tenure he also led several sourcing, category management, marketing, and supplier management functions. Earlier in his career he spent four years in the global MRO and services sourcing practice at FreeMarkets, Inc., a leading software and service provider. There he developed widely adopted strategies for functional alignment and assisted in developing total-cost bidding technologies, for which he holds a patent. David is a regular author, contributor and presenter. David serves on the board of directors for Collaborent Group, Ltd. and is involved with several Autism-related charities.