Readiness is the (only) secret for procurement digital transformation success
This article was written by Thierry Jaffry, Vice-President North America at Fluxym, and first published on LinkedIn
I’ve wanted to write about this for a long time. After 12 years of Source to Pay systems implementation, I have identified one common key success factor (or lesson learned) to every single project: readiness. And this, whatever the size of the company, the scope of the project, or the level of maturity.
What does that concretely mean? How can an organization be prepared to a procurement digital transformation ?
It’s amazing to see that the PPT framework from the 60’s is still applicable here: each Procurement organization willing to succeed in the digital transformation journey needs to work on the Process, People and Technology readiness.
1. Process readiness
This is one of the main topics of discussions with our clients, and I’ll start with a statement: “Solution Design workshops are NOT the place to define or discover target processes, but only how it will fit into the new solution”. This means that some preparation work must be done before the implementation starts, not only by assessing and documenting the AS-IS processes, but also by defining the target operating model (TOM) and TO-BE processes.
But one will argue: “How can I define my target processes without knowing the capabilities of my future system?”. And this question is legit. Here is some food for thoughts:
- Target processes can be defined before the system selection, and then evaluation will be done based on concrete use cases, and the ability for the technology to address your requirements.
- Most systems can indeed bring best practices, but there is no one size fits all, even within the same vertical. Design sessions will then be the perfect place for a fit/gap analysis between your target processes and the tool embedded best practices. Outcome can be a light process adjustment, but without compromise.
- Use an advisory firm who knows system capabilities. This will make all the difference. At Fluxym, we now offer automatically to play that role through a dedicated Advisory team composed of procurement & supply chain practitioners who can also bring S2P systems SMEs on demand. This is real value.
- Preparing your target processes will also naturally highlight your technology roadmap and priorities. I’m a big fan of the “crawl-walk-run” approach, as best results come from progressive approaches, especially due to the human component (see chapter 2) of the transformation. It will allow to focus on immediate pain points and value drivers, and maybe realize that sometimes a best of breed approach for technology will be a better fit to cover your mature requirements.
2. People readiness
Of course, it’s always about Change Management. It seems trivial but I’ve seen large organizations with target processes defined, long and meticulous implementation projects, but poor adoption at the end. There are many explanations to this, but it is mainly because Change strategy has been summarized to training sessions and a few communications.
Change strategy will help to secure the adoption, overcome cultural and behavioural barriers to digital transformation, and minimize the risk and impact of the change on business operations and service continuity.
What does a successful people preparation look like then?
- Assessment of the impact and the stakeholders
- Mobilization of key stakeholders
- Alignment of management team
- Resistance management
- Efficient and targeted communication
- Transition strategy
- External change management strategy (suppliers)
- AND (mostly forgotten), Success KPIs measurement (Satisfaction, Adoption, Performance, Engagement, Benefits..)
This side of the transformation shouldn’t be underestimated and requires to onboard Change Management professionals at the very first steps of the initiative.
3. Technology readiness
Last but not least, the IT ecosystem must be “transformation ready”. This means working on these aspects:
- Data cleansing: it’s a mandatory step. Supplier data needs to be cleansed before the implementation of a new S2P system, as it is usually outdated, incomplete, inaccurate, or just because of the multiple duplicates. And trust me, this is a mini-project within the project. Once bad data has been identified, next step is to define a strategy for the source systems (ex: can I deactivate a duplicate supplier where there is an open PO?). This will ensure the success of the future solution (think supplier onboarding for example) – quality in, quality out. But cleaning is a one-time activity and as of Day 2, people will continue create new duplicates, and 2% of your supplier data will become obsolete each month. Great solutions like Tealbook (to enrich supplier data and maintain its accuracy, as well as exploring new alternative suppliers) or HICX (to manage the suppliers master data, as a global single source of truth that allows a smooth best of breed strategy for other S2P components) will be of great help with a proven ROI spread among all your S2P solutions architecture.
- Integration and IT bandwidth: even if integration has been considerably facilitated by the SAAS solutions, there is still a need for your S2P SI to talk with internal IT experts who bring a deep knowledge of your incumbent solutions (same for migration activities, by the way). Our implementation projects have been sometimes slowed down because of the IT resources availability (including security) or lack of internal knowledge on how to integrate with an implemented niche software. Sometimes the selected option to mitigate that risk is to move forward with limited integration and some stand-alone components, but I think this leads to a significant loss of value and an adoption gap.
As a conclusion, there are many mandatory aspects of the P/P/T readiness that an organization must go through, and it’s almost impossible to do it timely without external support of seasoned experts. The System Integrator (or SAAS provider) should always perform a due diligence (“readiness assessment”) before starting any implementation work. That will avoid a lot of frustration or disappointment at Go Live, and improve the actual ROI of procurement automation.