Perfecting the Talent-Technology Face-Off
Digital Transformation is about more than just keeping up -- it’s about moving ahead. How close are we to digital transformation in Procurement? Despite all the talk, the JAGGAER 2019 Digital Procurement Report reveals that little has changed since 2017. A lack of budget and the requisite IT skills, a lack of progress with data integration, and a lack of digital knowledge among procurement professionals themselves, are just some of the most important obstacles to rapid progress that the research highlighted.
The statistics are quite worrying. For example, only 50% of procurement professionals rate their digital knowledge as up-to-date or excellent – unchanged since 2017. And while 54% of organisations have now at least started the process of digitising and automating their standard procurement processes, only 2% claim to have fully automated those processes. More than a fifth of the organisations surveyed still rely on fax and paper.
All of this prevails despite an apparent enthusiasm among organisations to digitally transform their procurement function. A 2018 global survey conducted by the University of Applied Sciences Würzburg-Schweinfurt with support from SAP Ariba revealed that leading procurement organisations see digitisation as the future. But here again, a disconnect exists between desire and deployment. While 83% of respondents said that digitisation will profoundly impact their business, only 5% had highly automated processes in place.
A Talent-Technology Face-Off
A reluctance to fully embrace technology persists despite the opportunities that automated procurement processes give for addressing the profession’s ongoing talent shortage. According to a 2017 DHL Research Brief, “demand for supply chain professionals exceeds supply by a ratio of six to one”.
High demand and a lack of candidates fit to take on changing job requirements make it more important than ever for organisations to free up the procurement team’s time using technologies that automate routine administrative work, and enable them to do more with less.
Challenges And Lessons
Organisational reluctance is just one of several challenges facing those who wish to optimise and digitally transform. But opportunities exist to overcome these obstacles, as some successful brands have been demonstrating.
Mondelēz Addresses Process And Work Flow Restraints Due To Legacy-Digital Integration
When Mondelēz International (MDLZ), a global snacking company and world leader in biscuits, chocolate, gum, and candy, wanted to transform its business model to meet rising customer expectations and competition, the company faced pressure from many sides.
New acquisitions and a vast regional network were increasing overheads, causing operational redundancies, and creating inconsistent processes. And with 150 processes to standardise in 75 countries spanning six continents, Mondelēz also faced the prospect of having to upgrade its legacy technology stack in line with its new objectives.
Having realigned its product portfolio to become more agile and meet evolving customer demands, MDLZ was also looking to improve margins and cost structures to invest in growth. These ambitious targets demanded holistic transformation across its factories and functions. Mondelēz needed to transform its back-office functions, including finance, and roll out global processes -- all within a time-frame of three years.
Using an AI-based platform of digital technologies, MDLZ was able to improve governance, agility, and resilience, achieving faster time-to-market, and with money available to re-invest in innovation and growth.
Procter & Gamble (P&G) Overcomes A Shortage Of Adequately Skilled Talent To Steer Its Digital Transformation
One of the largest employers in the world and owner of such recognisable brands as Pantene, Olay, Gillette, and SKII, Procter & Gamble (P&G) has what at first may seem a counter-intuitive employment policy. The consumer goods corporation hires entry-level positions almost exclusively, with around 90% of all its hires globally being for junior roles.
Thanks to the company’s robust leadership development programmes and meticulous career-planning frameworks, P&G maintains a commitment to “building its future leaders from within”. According to Vinitaa Jayson, then Vice President of HR for P&G Asia, “We hope each time when we hire an individual, that they might end up one of the presidents or CEOs of the organisation – because that’s how each of our CEOs have started.”
Under the organisation’s well-established hire, develop, and promote model, prospective candidates are spotted early, often through outreach programmes where participants act, think, and learn to make business decisions like a CEO or other senior leadership role across brand management, sales, strategy, finance, procurement, and other functions -- all while being coached by P&G mentors. Once hired, candidates are given opportunities to rise up the ranks while being attached to various business units across the world.
As a result, the company very rarely needs to hire a senior executive externally, without first giving the opportunity to existing employees.
Transdev Addresses Operating Model Restraints Due To Differing Strategic Priorities Within The Leadership Team
Transdev Australasia, a leading public transport operator, faces a challenge to deliver high performing and consistent services while upgrades to facilities and infrastructure in the region are ongoing. Amongst other issues, the organisation must tackle change management to navigate huge improvements across its Australasian public transport operations, while turning around under-performing business functions, such as disruption management.
This transformation is a complex and multi-faceted task. For example, in overseeing the day-to-day operations of the Greater Wellington regional passenger network, Jonathan Tulitt, General Manager of Operations at Transdev Wellington must govern a spectrum of business elements ranging from leadership of the Onboard teams (Locomotive Engineers, Train Managers and Passenger Operators), maintaining a high level of network performance, management of the Service Control Centre and Network facilities, to service planning functions.
Technology has played a role in Transdev’s culture shift. Jonathan Tulitt, who is also managing the transition of manually produced rosters to an electronic scheduling system called Hastus, says of the company’s digital deployment: “Our biggest group innovation has been the MyTransdev app. It gives us a business portal from all across the world directly into the hands of our front line staff which allows them to have a voice. The app’s facilities cover personal rosters, news, staff sharing, chat and digital forms for incident reporting and standard admin processes and other cumbersome processes now digitised in one app. We have an older workforce that are actively embracing the new technology; the driver tablets we're introducing essentially replace the paper function of the business. When a locomotive engineer books on they must have all of their paperwork (bulletins, rules, procedures) - it can weigh up anything from three to six kilos! We're now giving them access through a digital portal so they can synchronise each morning when they turn up, and at the start and end of each of their journeys. They will have the latest information at their fingertips wherever they are, in real time. The feedback from trials has been really positive.”
The continued push for digital transformation sees Transdev monitoring the latest trends, and keen to meet the future needs of its passengers.
The Push For Digital Transformation Must Continue
If your organisation’s digital transformation of procurement is stalled or non-existent, it’s imperative to push on, and not get left behind. Competitors that stay ahead of the trend will forge ahead of you, and reshape their organisation to become even more competitive, with better support for the business through deep transformation, and new ways of doing things.