In the phrase “digital transformation,” the key word is “transformation,” according to Paul Blake, associate director at GEP, a global provider of supply management consulting, outsourcing and technology solutions. That’s because transformation enables procurement organizations to extract more value.
Speaking during the “Keeping Up with the Digital Procurement Transformation” panel session at ISM2018 last month in Nashville, Tennessee, Blake said that a digital transformation in procurement is more than buying software or other technology — it involves people and process as well. The three elements must work together, not separately, for digital transformation to be successful, he said, adding that digital transformation is about changing and improving the procurement process and how people work by implementing the right technology.
The session’s two other panelists talked about their procurement organizations’ experiences with digital transformation.
When Kim Broniek, senior manager of strategic procurement at II-VI Incorporated and the company’s first corporate supply chain leader, began her job, she discovered that more than 20 different ERP systems were used worldwide throughout the organization. A global producer of engineered materials, II-VI had primarily grown through acquisition, and each division was operating separately.
Implementing a software system from GEP has given II-VI total spend visibility, Broniek said, and is enabling the company to build a procurement strategy. New measures have included adding more tools, building a team of category managers and increasing training for employees.
“Effective decisions can’t be made until you have spend visibility,” she said. “You really couldn’t go down the path of procurement transformation without data. Now we have it, and we’re really at the beginning of our journey.”
Erin Riley, information, analytics and systems director at the University of California (UC), said that the higher-education system’s procurement organization turned to digital transformation to impact spending at a time when state funding for higher education is decreasing. UC joined with the California State University (CSU) system on the project, which is resulting in increased RFX visibility, spend-management and contract-management capabilities, better supplier-relationship management and ability to leverage larger economies of scale.
The transformation centered around three strategies, according to Riley:
●Frequent, more easily digestible changes, which creates a culture of continuous change and improvement
●Early and frequent involvement of key stakeholders
●A realization that change management isn’t an afterthought — training and communication strategies must be in place early in the project.
The UC/CSU digital procurement transformation hasn’t been only about implementing a GEP technology system, Riley said: The project supports process and people change necessary to reach goals and the partnership between the two educational systems.
Summing up, Blake emphasized that organizations must realize that digital transformation isn’t a “technology fix.” Technology can enable transformation, he said, “but the fix comes from how people work. Technology is a product — the solution is in what we do with it.”