Procurement Leaders Collaborative Value Creation (CVC) groups are designed to solve complex problems with a small working group of experts. The digitalisation CVC is made up of digital leaders from organisations such as Diageo, EON, Heineken, Mondelez and Sasol.
In this latest update, we share the work the group participated in before the summer break. For further reading on the preliminary step, see Creating a roadmap to digitalisation success.
As agreed with the group, the next step was to take Procurement Leaders’ Digital Readiness Assessment diagnostic, featured as part of our theme for 2019.
The goal was for the digitalisation group to evaluate the assessment. Several members had identified challenges in understanding their current status of readiness, and thus the ability to project a roadmap. Would the tool stand up to under scrutiny?
The answer is yes. Participants took the assessment on behalf of their function, followed by a diagnosis by Procurement Leaders analysts on each organisation’s relative strengths and weaknesses.
A key finding throughout the group was how the presence of an overdeveloped strength in one area can impede progress in another. Developing roadmaps with the business in an extremely collaborative manner, for example, limits the function’s ability to modify its plans should a change in thinking occur if, for instance, a new technology solution were to be presented to the organisation. Although collaborative, the roadmap planning process could ultimately be too rigid to adapt.
The CVC group found the assessment outputs to be comprehensive, relevant and insightful. As a group we decided that now the assessment proved useful, the group should focus on a core challenge common to all: attracting, developing and retaining digital talent within procurement.
What follows next for the group will be a series of interviews on this topic to provide an expert group view of the topic, the successes members have seen, how they’ve overcome challenges and their recommendations for the community.
Digital readiness early findings
For further reading, below are the findings on aggregate based on the assessments the group took. Digital readiness falls into three broad themes:
- Overdeveloped governance, leading to limited strategy and vision.
- Strong digital people and culture, limited digital infrastructure and capabilities.
- Strong digital leadership doesn’t translate to execution.
Overdeveloped governance, leading to limited strategy and vision
- The more mature your digital strategy and vision capabilities become, the more you involve stakeholders throughout the business and out to the supply chain.
- Procurement is key to driving digital projects for the procurement organisation and to collaboratively build digital processes across the business.
- Governance has traditionally been a key strength for procurement but, through a digital lens, it can lead to too much rigidity – impeding the function’s ability to adapt to change.
Strong digital people and culture, limited digital infrastructure and capabilities
- A classic talent versus tech problem, some assessments have revealed that the team’s skills and capabilities are more advanced than the tools and technologies it is currently using.
- Commercial off-the-shelf software typically has a long life as a result of large solutions with strategic providers; for example, businesses do not change or upgrade enterprise resource planning (ERP) suites and related applications delivered by providers such as IBM, Microsoft, Oracle and SAP without significant planning.
- Procurement Leaders research shows CPOs are keen to upskill the function’s digital capabilities, which is beneficial when right-sized for the tools currently employed. But carefully consider whether key individuals have more mature skills than the tools in use – this can lead to retention issues in future.
Strong digital leadership doesn’t translate to execution
- Several assessments identified the strength of collaborative digital leadership across and outside of procurement, with a relative weakness in governance and processes, particularly in change management.
- The size and nature of most digital projects dictate the need for strong processes, especially change management. A common theme to improve project success among procurement leadership is early stakeholder buy-in and frequent interactions.
- Scope-creep is a major challenge associated with many digitalisation projects. Expectations are raised due to a combination of solution provider and business case scope-creep, in which solving more problems than were originally identified means a more robust business case leading to higher expectations. This effect can challenge even the most robust change-management processes, despite strong and collaborative leadership.
If your organisation is interested in taking a Digital Readiness Assessment, please contact your account manager or email us.
This article is a piece of independent writing by a member of Procurement Leaders’ content team