“Is digital the future?” asked DSM CPO Koen Devits. “No, it is the now.”
This statement summed up the sentiment of the Data Intelligence & TechX Forum at the Crystal, London. Procurement teams need to adapt to the disruptions going on in the world and help ensure the wider business becomes the disruptor – rather than the disrupted.
Digitalisation, data-driven strategies and agility were three of the fundamental trends modern-day functions should embrace, speakers told the audience.
When Southern Water’s chief data officer (CDO) Peter Jackson asked the audience: “How many organisations have a CDO?”, around three sheepish arms were raised. Fast-forward to 2019, however, and Jackson expects 90% of large companies to employ a CDO. Organisations should have specialist teams that look after the data across the entire organisation, Jackson said. He argued a data team should be just as valuable as a finance team, as data is an asset that can drive value and make processes more efficient.
Does this provide a new career opportunity for procurement professionals? Perhaps. But, more importantly, it is essential procurement executives get behind the business’s data-driven strategy by upskilling staff on cloud technologies, getting close to this dedicated data team and thinking carefully about ways in which data can inform strategic decisions.
A dedicated data team is just one way of dealing with data. For Intel, advanced analytics are embedded deep within the supply chain team, which uses a number of dashboards to monitor the supply chain, including supplier sentiment analysis, supplier research/report connections, supplier disruption detection and similarity analysis dashboards.
Whether it is owned by procurement or a specialist data team, it is vital that someone makes sense of all the data available to modern businesses.
Expanding the function’s digital capabilities was the focus for DSM’s Koen Devits when he took the helm of the organisation’s purchasing function in 2015. The solution: moonshots and hacks. The moonshot initiative involved bringing three MBA students into the function and giving them free reign to come up with something that could eliminate jobs or the entire function as it stood.
It might sound quirky but, he said, it has helped deliver four essential building blocks all procurement teams should strive for – one source of data, being fully connected, robotised and automated processes and better collaboration with suppliers.
DSM also used the concept of a hackathon or hack week, where virtual teams worked together on a ‘hack’, or project, to solve a problem. This, said Devits, led to the birth of several digital initiatives, such as request-to-receipt, source-to-contract, and receipt-to-pay, and has also led to the implementation of a cognitive assistant or “digital employee” called Amelia.
The lesson here is how a purchasing organisation with little in the way of a digital strategy can transform itself into an advanced digitalised function with a successful change-management approach.
Making the function more agile kept cropping up in conversations, keynotes and roundtables at the two-day event. According to Julian Birkinshaw, professor of strategy and entrepreneurship and deputy dean at the London Business School, businesses face three enemies of change: the size and complexity of the organisation; its legacy obligations; and the company being averse to trying new things for fear of failure.
But both the business and the procurement function need to adapt and become more agile or risk being disrupted by new competitors. Birkinshaw said there is a need for businesses to transition beyond the information age into the agile age. In this new era, companies need to balance the hard data and intelligence with the ability to humanise this information. This requires new skills and models of working, as well as technology.
A more adhocratic model better supports experimentation, learning from failures and taking on new leadership styles, all of which are needed to take procurement into the agile age.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.