The Chinese philosopher Laozi once wrote in the Tao Te Ching that “a journey of a thousand miles begins with a single step.” The statement is as true today as it was in the sixth century B.C.; and it is as true for business change, like digital transformation, as it is personal journeys of transformation. And although it may be scary (and it often us), we need to start somewhere — in life as in business.
For Chief Procurement Officers (CPOs) and other procurement and supply management leaders stuck in manual, paper-based processes and systems and are staring into the abyss of digital transformation: we hear you. It’s tough formulating a plan and breaking inertia when you’re weighed down with paper or tied up in Excel. Fortunately, we’ve got five things you can do right now to help prepare you for the digital journey ahead.
- Think holistically about introducing technology into the source-to-settle process: Between strategic sourcing and procure-to-pay, it matters less where procurement leaders automate processes and adopt technology, and more that they consider all aspects of the project. Business leaders need to rationalize technology adoption considering current needs, budgetary allocations, staff/talent levels, technology capabilities, and their ultimate goals; otherwise technology adoption may be mismatched. And they need to keep driving towards those goals. In short: start now and keep going.
- Simplify and pare down processes before mapping them to technology implementation: Kludgy processes, or process-overkill can frustrate users who’ll often revert to old, manual methods, thereby negating the value and intent of technology implementation. Simplified and sensible processes can foster greater adoption and use of technologies that can save organizations a considerable amount of time and money and drive greater value. Get a ground-level view of process workflows and execution and understand how technology will align with and simplify them, rather than complicate them.
- Prioritize supplier enablement and the cloud for greater collective value: Consider using a third-party enablement team, as well as business networks to accelerate supplier enablement. Remember that supplier enablement, particularly through business networks, allows buyers and suppliers to connect quickly, efficiently, and securely, while cloud-based solutions deploy quickly, are flexible, scalable, and secure, and require little in-house IT support. These two things alone will help CPOs and their teams benefit from any existing suppliers already enabled on the network from a previous customer relationship.
- Prioritize gaining visibility into data, processes, and suppliers: Digitization and automation not only help business users scale processes and expedite work, they also drive visibility into processes and stakeholders. As a result, gaining visibility into all manner of data, processes, and suppliers needs to be another major goal of digital transformation. There is much to learn from enterprise spend, sourcing, contracts and contract compliance, purchasing, payment, and supplier information and performance. Thus, consider how technology will not only automate and scale repeatable work, but also illuminate the entire source-to-settle process. Gaining visibility here can help CPOs and their teams make smarter sourcing decisions, drive compliance, avoid or manage risk, drive savings, and enhance overall performance.
- Engage key stakeholders early and throughout the process: Before initiating a change, procurement leaders need to understand how possible changes will impact all of their constituent stakeholders; and they ought to win buy-in from leaders across and outside of the organization. These are foundational elements of change management. Communicate your vision and intentions early and often, seek input and counsel from strategic stakeholders, consider everyone’s input, devise a plan, put it all in writing, and then keep on communicating and engaging.
Final Thoughts
Change is hard. Change is uncomfortable. Change is scary. Change can make you feel alone; but you don’t have to go it alone. Take a deep breath, take a step back, think long and hard about what you want to do, why you want to do it, and how you ought to do it. And then talk to everyone you can about it. They will likely be able to help, and you’ll both be better off for it.
RELATED ARTICLES
Easing the Procurement Transformation with Company-wide Buy-In
Driving Procurement Transformation Upstream with Procure-to-Pay
Sailing Downstream: Why “Source-to-Settle” Defines Procurement Transformation in 2015
