digital action plan part two: what should i do? · data dashboard chatbot automated s2p...

Digital action planPart two: What should I do?

Procurement Leaders | Accelerated transformation starts here Procurement Leaders | Accelerated transformation starts here

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ContentsIntroduction 3

• Considerations• What can I automate?• Using a prioritisation matrix• How to get from A to B• Visualise the roadmap• Case study: DSM’s purpose-driven strategy• Case study: Vodafone’s cognitive capability map

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Procurement Leaders’ view 13

• Define your outcome to drive value• Where are the largest gaps?

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This section provides insights into activities functions should look to automate, as well as help procurement executives identify priorities and develop a digital roadmap.

1. Considerations. Assess ‘why, where, what, who, and how’ to help determine the basis of the function’s digital action plan

2. What can I automate? Benchmark pain points, as well as understand what can be automated and the technologies available

3. Using a prioritisation matrix. Map projects by ease of implementation and projected impact to identify high-, medium- and low-priority projects

4. How to get from A to B. Coordinate and synchronise project interdependencies to assist with resource allocation, prioritisation and tracking

5. Visualising the roadmap. Present the roadmap in a clear, visual way, depicting focus areas and milestones.6. Where to start? DSM illustrates the importance of framing the function’s purpose before deploying a solution7. Automate, augment, or upskill. Vodafone’s blueprint for the category managers of the future

Introduction


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Considerations


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What can I automate?

§ Apply automation to high-volume, repetitive, data-intensive tasks that require multiple interfaces. These include: tasks associated with human errors; file creation; and multisystem integration.

§ Define how category managers will use their additional capacity prior to automating tactical processes – not during or after. Be clear on how this new type of work impacts the business; clearly communicate changes, benefits, and consider any talent implications.


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What can I automate?


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Using a prioritisation matrix§ Use a prioritisation matrix to place map projects by ease of

implementation and likely impact to determine whether they are high-, medium- or low-priority to identify potential pilot projects. Consider the following questions:

IMPACT§ What benefit would the solution deliver? § How quickly would the business realise value? § Would the value be long-term and sustainable?

IMPLEMENTATION§ How expensive would it be to develop the solution? § How complex or time-consuming would it be?

Project A

Project BProject D

Project C

Project E

Project F

IMPA

CTLO

W

IMPLEMENTATION EASELOWLOW PRIORITY

Prioritised Others

Project G

MEDIUM PRIORITY HIGH PRIORITY

HIG

H

HIGH


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How to get from A to BMAPPING DEPENDENCIES§ Use a project dependency map to ensure

project interdependencies are coordinated and synchronised. This will assist with resource allocation, prioritisation and tracking.

§ To ensure success, projects must be aligned to business outcomes.1. Lead with the solution.2. List project tasks.3. Define internal and external

dependencies.4. Outline dependency types.5. Nominate champions.6. Update schedule.

PROJECT OBJECTIVE:Develop a clear and comparable data set

Visibility over spend

Consolidate systems

Spend analysis platform

Master data managementData team

Data warehouse

KPI dashboards

DEPENDENCY MAP FOR A DATA VISIBILITY PROJECT


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Visualise the roadmapPresent the roadmap in a clear, visual way, depicting focus areas and milestones


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Case study: DSM’s purpose-driven strategyFunctions should frame their purpose before deploying solutions

PURPOSE SOLUTION

Transparency

Experience

Efficiency

Connectivity

Data dashboard

Chatbot

Automated S2P

Cloud-managed inventory

THE SITUATION§ DSM had a range of procurement systems but lacked a

coherent digital strategy.

THE SOLUTION§ A ‘moonshot’ and a hackathon laid the foundations for a

digital strategy to improve operational transparency, functional efficiency and connectivity with key suppliers.

THE OUTCOME§ Asking first why digitalisation was necessary, rather than

what technology it would like to deploy, gave DSM a base from which to design a need-based digital roadmap.

§ Pitching digitalisation in these terms helped build trust in the function’s digital initiatives and secure stakeholder support.


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THE SITUATION§ An internal analysis revealed category managers

were spending too much time on routine, low-value tasks and not enough on higher-value activities.

THE SOLUTION§ Vodafone designed the “cognitive lens” – a

framework to understand the degree of mental effort required to complete various tasks, as well as how category managers’ can focus their time and energy on the most important jobs.

§ Following a survey, in which Vodafone’s category managers rated their tasks according to the levels of complexity and collaboration they demanded, the company was able to see which jobs could be automated and/or augmented using technology.

Case study: Vodafone’s cognitive capability map

23 34 1 42

0% 20% 40% 60% 80% 100%

Routine solitary Simple collaborative Complex solitary Complex collaborative

5 15 20 60

0% 20% 40% 60% 80% 100%

Routine solitary Simple collaborative Complex solitary Complex collaborative

CURRENT USE OF CATEGORY MANAGERS’ TIME (%)

PLANNED USE OF CATEGORY MANAGERS’ TIME (%)


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THE OUTCOME§ This exercise has provided Vodafone with a

blueprint for its category managers of the future, outlining major focus areas and skills requirements.

§ The cognitive lens framework also serves as a skeleton digital road map, highlighting where different types of technology can be employed to release Vodafone’s category managers’ capacity to focus on the most valuable work.

Case study: Vodafone’s cognitive capability map

Collaboration

Complex solitarye.g. analytical reporting

Cognitive automation

Complex collaborativee.g. category strategy

development

Decision support models

Routine solitarye.g. data

upload/download

RPA

Simple collaborativee.g. invoice requests

Virtual assistants

Automation Augmentation

Com

plex

so

lutio

nSi

mpl

e so

lutio

n

LowLo

wHigh

Hig

h


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This section provides insights into aligning the procurement function’s definition of ROI to that of the business and plugging digitalisation gaps.

1. Define your outcome to drive value. Lead with procurement or business outcomes, not technologies. Focus on measurable outcomes.

2. Identify the largest digitalisation gaps. Procurement professionals have identified core purchasing areas, such as PO and contract management, as quick wins.

Procurement Leaders’ view


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§ Frame the business-wide benefits that extend beyond the impact for procurement. Functions that solely focus on their own return on investment (ROI) and overlook the business ROI will struggle to obtain buy-in from stakeholders.

§ The business case for a proposed blockchain solution, for example, should emphasise how the technology could help minimise organisational risk or accelerate go-to-market processes – rather than how it could improve procurement visibility.

§ Solely aligning digital initiatives to cost savings will limit the function’s ability to deliver long-term value for the business. Aligning a digital business case to wider organisational outcomes will be much more effective in terms of securing stakeholder buy-in and investment from the business.

Define your outcome to drive value

Make decisions in real time Codevelop IP with new digitally enabled supply chain

Revolutionise procurement processes to keep up with the demands of digital business

Harness the exponential growth of data from a

digitally enabled ecosystem

Procurement ROI

Business ROI

Business outcomes


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DIGITAL SOLUTIONS AND THE GAPS• Procurement professionals perceive

areas of core procurement activities such as PO and contract management to be automation priorities (see chart, right).

• Automation within these areas is primarily supported by systems coverage, often as part of a core procurement suite.

• Areas that require soft skills – such as stakeholder discussions or supplier relationship development – are less well suited to rules-based automation and are harder to systemise or support with software bots.

Where are the largest gaps?

25.1

27.6

32.6

34.2

34.5

39.3

39.5

42.7

46.9

63.1

0 20 40 60 80

Asset and inventory management

Stakeholder discussions

Strategy planning

Supplier relationship development

Risk management

Team management and training

Project management

Sourcing management and negotiation

Contract management

PO management

PROCUREMENT ACTIVITY THAT HAS BEEN AUTOMATED (%)

Source: Technology and procurement: A vision of the future, Procurement Leaders, 2016

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