In ten years’ time, the procurement profession and the role of the Chief Procurement Officer (CPO) has changed in many unique and profound ways. Yet, just like 2010, CPOs and other procurement leaders are entering the new decade grappling with intense challenges (some old, some new) and driving forward to achieve aggressive goals and objectives.
On that front, I’m pleased to continue with our exciting, new series on CPO Rising – “20 for 2020” which examines a broad range of CPO-driven topics. Today we continue with 20 for 2020: Key Themes for the Modern CPO’s Agenda (#5 – Digital Transformation), which is designed to help procurement executives set their organizations’ course for the critical months and years ahead. Enjoy!
20-for-2020: Theme #5 for the Modern CPO’s Agenda: Digital Transformation
As discussed frequently here on CPO Rising and in Ardent Partners research, the drive for business agility now trumps the traditional pressures that have plagued businesses for years in regard to their workforce and talent (such as costs and compliance). The new dialogue around “digital transformation” finds that businesses can be enabled with the cloud-based, digital tools to not only enhance existing corporate processes, but also develop real-time abilities to address dynamic market challenges.
The so-called “digital enterprise” is one that leverages the power of both traditional and innovative systems while providing functional stakeholders with a real, digital experience in regard to process orientation, flow of data and intelligence, and access to resources (including talent). As Ardent’s research has found, less than a third of businesses today (32%) have undergone a true digital transformation, yet, an additional 45% plan to undergo this conversion within the next two-to-three years.
Once the decision to digitally transform an organization has been made, the scope of the project has been laid out, and the appropriate technology and or implementation vendor has been selected (click to read Five Things to Consider Before Beginning Digital Transformation), the realm of digital transformation actually follows a simple approach. Enterprises must evolve the way it competes in the market by automating and enhancing the processes that support key enterprise operations, including procurement.
One important aspect of digital transformation lies within an organization’s ability to penetrate even the most archaic of enterprise processes with automation and innovation. As organizations expand from simple process automation across specific functions to adopt new and exciting solutions, the long-term digital transformation roadmap should ultimately reflect the following progression:
- Deploy: businesses should identify which functional areas can benefit from automation and develop a plan for introducing technology to these areas.
- Adopt and Adapt: adoption should be rolled out slowly across the aforementioned targeted areas, and, in conjunction, business leaders must strive to help users/workers adapt to the enterprise-scale transformation that is occurring because of process and system automation.
- Upgrade/Improve: operations that leverage technology should then be marked for a natural enhancement with upgrades that can drive additional value, improve communication, garner more/better data and intelligence, etc.
- Transform: businesses must paint a vivid picture of how they ultimately want their organization to “look” from a digitized perspective, and help executive leaders understand how their respective functions will be transformed in the months and years ahead.
With the above in mind, it is critical to note that business agility is the goal for the majority of today’s companies; in order to react in real-time to challenging market issues, the modern enterprise must ensure that digitized processes are connected and linked in such a way that they are essentially “boundary-less;” this is the ultimate state of digital transformation, and allows stakeholders to execute key strategic and tactical operations across all corporate functions in a holistic and real-time manner. While many organizations are far off from this futuristic goal, it is nonetheless a pure representation of an optimized state of work.
Final Thoughts
As stated above, Ardent’s research has found that 45% of organizations expect to undergo digital transformation within the next two-to-three years. This figure is a key indicator of things to come: digitized enterprises can easily adapt to critical changes in the way talent and commerce is consumed in the future. As the channel-based, network-driven, and on-demand/digital approaches towards business communications, business commerce, talent engagement, and supplier and stakeholder collaboration become more of an ideal, the digitized business will be well-positioned to become truly agile in the years to come.
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20 for 2020: The Key Themes for the Modern CPO’s Agenda (#1 – Visibility)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#2 – Agility)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#3 – Innovation)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#4 – B2B Payments)
