There are two phrases which come to mind when reading through the results of the Proxima Digital Transformation Survey, these are ‘Customer Centricity’ and ‘Best of Breed’. The two are intrinsically linked and may hold the key to faster deployment and enhanced adoption of digital solutions, and therefore the route to better data, more informed conversations and smarter decisions.
The next thing that springs to mind, perhaps unsurprisingly for this moment in time, is the Coronavirus and how it might impact the digital agenda.
Understanding the digital imperative
The reasons for digital are well documented and yet the digitization of procurement seems to lag behind other business functions. It is not for the lack of ‘procure-tech’ solutions or the hype that surrounds them. There are more options available to CPO’s than ever before. In the recent survey, it was clear that CPO’s are suffering from too many options and too much information, bringing confusion over clarity, which may be turning analysis into paralysis.
This is a dangerous outcome because paralysis will hurt. As businesses seek to be faster, more agile, more data led and more resilient, digital is a significant part of the answer. The time to start is now, and so if you are reading this report and the key takeaway is ‘Everyone else is fairly scared too so why bother now? Time for my next Zoom meeting’, then you will be left behind.
But, if you do feel that you are behind, all is not lost. Whilst the leaders are well ahead, their examples give us more clarity on vision, approach and benefits. Learning from peers and taking external advice will help to punctuate some of the myths and see a path; what it is, where to start, and what the benefits might be.
The impact of a global pandemic
COIVD may actually be beneficial for the CPOs digital agenda. For many years (as the survey points out) a key challenge for CPOs has been articulating the problem and selling the benefits of digital solutions (to economic buyers). Unlike many other commercial business cases, digital procurement is not always best measured in the efficiency savings that it delivers, it is sometimes better measured in the opportunities that is creates. For many, this has been a hard sell, and it shows.
Historically software has typically sold on problem, or opportunity. The complication with a lot of past ‘procuretech’ business cases is that economic buyers didn’t ‘feel’ the fear, and couldn’t touch the benefits. COVID has changed all that. Now everyone understands the problems and there will be a race to solve them. For the CPO this presents an opportunity to start quickly, and build a digital function from the data up.
But, be warned- successful digital transformation does not start and end with the business case.
And so it’s about Customer Centricity, and Best of Breed
The importance of constructing digital transformation around the (procurement) customer is a clear takeaway from this survey. As is the need to look deeper into their problems and needs rather than accept at face value what an organization thinks procurement should do. This is customer-centric procurement; using a deep understanding of your customers as the key to unlocking the potential of procurement.
Fortunately, the growth in interoperable best of breed solutions now also allows CPOs the opportunity to delight customers through great technology. If not the new default option, at the very least this best of breed model must now be seriously considered by CPOs when planning transformation.
These best of breed solutions aim to go deeper than platforms, solving specific problems held by specific user groups. Not only do they often excel in user experience, and customer service, but they also offer CPOs the ability to tailor their transformation journey; starting small, investing wisely, accelerating adoption and quickly showcasing benefits, before moving on to the next challenge.
As a CPO, your challenge is to digitize in order to humanize
There is plenty to consider here about how human and digital resources need to work together for successful digital transformation. But, it is also important to note how delivering digital procurement is a starting point but not the ending point for CPOs. When reading this paper, it is essential to keep in mind that the CPOs greatest impact is not going to be digitising procurement processes per se, it is going to be what they do with the outcomes and how this helps their business.
Digital is a great enabler, but done in isolation it can also put more distance between procurement and its customers, dumbing down relationships rather than ramping up collaboration. We often talk about using digital as a means of moving into more value adding work and we must use the time and insights we create to improve the business, rather than just settling for improving procurement.
Understanding our business, our customers and external markets is our north star. Whilst we ‘become digital’, we should also be focussing on what next; connecting and collaborating, bringing new insights and fresh perspectives. That work too, can start now. Take a look at the full report here.