Procurement teams need to create a vision for how they are going to deal with digital transformation.
Chris Sawchuk, principal at Hackett Group, said a survey of buyers conducted by the group found 95% believed digital transformation would change the way the function worked over the next five years.
But the same survey found only 66% of procurement teams had a strategy, and just 48% felt they had the competencies or capabilities to cope with digitalisation.
To make matters worse, Sawchuk said he thought these numbers were inflated and fewer teams actually had strategies or the right capabilities. “I think they’re too high. I work with a lot of organisations around the world and I don’t see the visions out there,” he said.
“Procurement seemingly understands that we have to transform ourselves from a digital standpoint. That will fundamentally change the way that we do things. But creating a vision or strategy, as well as garnering the appropriate resources, is a challenge for us. We don’t feel as confident in our ability to do that.”
Speaking at the Procurious Big Ideas Summit in London, Sawchuk gave buyers his advice for managing digital transformation.
Five top tips for preparing for digital transformation:
1. Even if you are not ready for digital transformation, create an environment where you are aware of what digital changes are happening. “I deal with a lot [of organisations] that don’t even know how to spell ‘digital’ yet,” said Sawchuk. “Make your people aware, understand the potential of some of these digital technologies that are happening.”
2. Digital transformation is about talent. “It’s not just about the technology. We have to transform our talent, the skills because there are things that we are doing today that are going to go away.”
3. Focus on creating comprehensive skills coverage across your team, not just on each individual member’s skill set. “We can’t create supermen,” said Sawchuck. Ask yourself: “Where do I have this? How do I create the best balance in the organisation, understanding I probably can’t get it in any single individual?”
4. Create a failure-tolerant culture. “Don’t shoot your wild ducks. We [procurement] have a tendency to do that – and if you fail we’re definitely going to shoot you. We’ve got to change that.”
5. Don’t just paint your vision, also outline how you and your team will get there. “A lot of organisations, their leaders have great ideas and can paint the vision,” said Sawchuck. “John F Kennedy, ‘We’re going to go to the moon’. Well, how are we going to get there? Paint a path because sometimes a vision scares people, and as you show the path they feel much more secure.