In an article I wrote earlier this year ago, I referred to the preparations organizations need to make as they move towards a digital supply chain. It’s a significant task, I said, and it’s akin to eating an elephant – you have to do it one piece at a time.
Even if we take this pragmatic approach, breaking the problem down into bite sized chunks may help further. When I speak with clients, regardless of where they are on their journey, I always talk about four phases you should consider when addressing your procurement transformation:
- Clear visibility – while many organizations have a certain level of analytics in place, they often miss the “facts and data.” This is the clear and concise information required to take decisions on focus areas. While having clean master data is definitely something to aim for, your organization can gain valuable insights from simple analysis of the data it already has. As you continue to understand this data and address each problem, you will also understand more about what to address next.Capgemini’s ESOAR methodology (Eliminate, Standardize, Optimize, Automate, Robotize), can provide some structure to this process – and when a sizeable amount of your data has been aggregated into one homogenous whole, it becomes much easier to perform discovery and analytics routines to obtain a clear understanding of the current environment
- Effective control – with a good understanding of your data, the next stage is to implement processes, tools, and policies to ensure control, and to facilitate the transition of work to the new delivery model. This can be a full-blown target operating model with outsourced delivery, or it might be centralizing procurement operations for your largest entity as a pilot. The objective is to gain some control over processes that were previously managed across the enterprise, and use the knowledge you gain to plan the next phase of your journey.Capgemini’s Digital Global Enterprise Model – or D-GEM – offers a structure for achieving this. It’s a flexible, platform-based architecture that provides a complete overview of an organization’s people, processes, technology, and governance with control points, accelerating the transition to transformed, future-proof processes
- Drive compliance – with your data, processes, tools, and policies now under control, it’s important to ensure they stay that way. This is about embedding change management across the organization, either through ongoing interaction and training for end users, or digital platforms with the right user experience to drive behavior
- Ongoing optimization – although compliance is important, it doesn’t mean the new environment is monolithic and fossilized. The fourth and final stage is to introduce a continuous feedback loop – including analytics – to reduce process exceptions, scope for improvements, and identify and drive further value.
I’ve mentioned D-GEM and ESOAR within the stages of this assessment, but in fact, they can bring a range of benefits right across the transition process to the digital supply chain.
Adopting an approach such as this may indeed be like eating an elephant – but it’s an investment that truly pays off, enabling organizations to derive more value from their data, and also to achieve greater control of their processes.
The result? A more streamlined, cost-effective, and responsive procurement system, and a higher overall quality of customer service.
Read Capgemini Research Institute’s “The Digital Supply Chain’s Missing Link: Focus ” report to learn more about how organizations across consumer products, manufacturing, and retail understand the digital initiatives they are adopting, the benefits they are deriving, and the way they are transforming their supply chain.
Greg Bateup has worked with clients to deliver business transformation and BPO services for almost 30 years. For the last few years, Greg has focused on the digital transformation of the source-to-pay function, and how organizations can not only drive efficiencies in the procurement function, but also drive compliance and savings.