The struggle to create a ‘digital business’ and why we fail
Digitalization, Procurement Trends, Industry Trends and Technology, Point-of-View, Source-to-Pay
According to Gartner’s recent report titled Digital Business Transformation: Closing the Gap Between Ambition and Reality, enterprises are working hard to digitally transform their businesses but many are struggling to get past the early stages of experimentation and piloting. This means a majority are failing to achieve their ambitions and it’s interesting to note why.
Obviously every CFO, CPO and CIO needs to be aware of both the opportunities and the pitfalls of digital transformation and while they tend to be opposite sides of the same coin, I’ll take the positive spin and talk about the opportunities.
I feel like the first thing to say is a cliché but clearly, who knew digital transformation was so complicated? Okay, probably all of you knew it - and better than me I’m sure. I’m one of those ‘those who can’t do, teach’ people - so feel free to add your comments to my LinkedIn post or wherever you read this. Putting the initial cliché aside, there are basically three items identified - and none of them will shock you. Note, I’m not making these up but these could have been written by our sales guys too. Okay, okay, I’ll get to the good stuff.
So, If you want to improve your chances of digital transformation success, how about starting with a solid gap analysis? Figure out what you’ve got, where you want to go and how you can best align your current operating model to a future state. Remember, digital business transformation requires taking technology, implementing it and then using it to actually change how you work. So start with a gap analysis (call us, it’s what we do every day).
Next step - start small, create something that works and then replicate it. AND before you do it, consider the value of a platform approach. Think about how you will scale what you are building in multiple directions. For example, in the old days, it was typical to implement a system in one country/unit, get a blueprint that works and then roll it out to sequential countries with small localizations where required. That’s still a good plan but consider a platform that offers more than simply bandwidth but offers up or downstream capability. If we are talking source-to-pay, you would want to begin with wherever your biggest headaches were and then expand your transformative efforts to the next process/department. While source-to-pay is a linear process, the benefits are both linear and non-linear so there’s not really any one order to do things - I guess this is why the gap analysis in the beginning is a smart idea.
Lastly, it’s common for businesses to neglect the value and power of their business ecosystems. My view on this is that business networks are still pretty technology oriented and while there has been tremendous amounts of consumerization of business-to-business ecosystems, the truth is, there is still too much diversity in user experience, network options and technology. It simply isn’t as easy as we would all like it to be - but, while it can always be better, there really is a lot of value still left untapped. These days, business networks are managing supplier information and performance measurement. They are full of self-service options for suppliers to improve their chances of doing business with clients. They support sourcing departments and professional buyers by enriching the sourcing and procurement process with information and improved collaboration between trading partners. So, it’s not just about e-invoicing or peppol - these ecosystems create their own value beyond the transactional or compliancy benefits.
So what should you do know that I’ve pointed to three things you already knew? A couple things come to mind. First, read the full report because I may easily have mischaracterized some elements and more obviously, I’ve ignored whole parts of it in this short blog. Second, if you are starting your digital transformation journey, I think you could do worse than get in touch. Not kidding, we’ve supported hundreds of organizations who are right where you are. These transformation projects are multi-year endeavors, we may well be able to help. Regardless, thanks for reading this far and if you want more, check out the links below.
Rowan has more than 10 years of experience in the purchase-to-pay arena. During this time, he has managed the go-to-market for a diverse set of portfolios including Accounts Payable Automation, B2B Networks, Financing Services, eProcurement and Product Information Management.
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