NEWS AND INSIGHTS
When does successful digital transformation begin? As soon as you realize that legacy software no longer serves enterprises well
In today’s fast-paced global economy, digital transformation isn’t a matter of if, it’s a matter of when. While true digital transformation requires a long-term operational and cultural commitment, it begins with the realization that a company’s processes and legacy software platforms are specific to individual departments’ operations and are not serving the greater goals of the enterprise.
Corporate leadership focused on change is imperative. This can mean new leadership ushering in new software and processes or existing leadership taking an honest look at how existing business practices and technology platforms are no longer supporting their company’s overall business goals.
So digital transformation becomes a foundational transformation, one where organizations adapt their core systems and processes. A common problem is the siloed business practices of various departments that hinder companies from making truly strategic business decisions. Barriers need to be removed, which means people and technologies have to talk to each other. Gone are the days when procurement, HR, finance, IT and legal operated in their own spheres, never sharing data.
Another factor that can impact a digital transformation is the shift toward more non-employees as part of an overall workforce.
HR departments typically manage traditional employees, and procurement teams manage the contingent workers. Using that siloed approach means IT, finance and legal may not be able to effectively perform their jobs because they don’t have accurate, comprehensive data about the total workforce.
Lack of access to critical information around contingent workforce data on things like total numbers of workers, badging status, network access, and compliance can have a significant impact on budgeting, time-to-productivity, reporting, security, invoicing and payments.
Adopting an agile, nimble workforce management platform that creates connectivity and communicates with other departments is often the starting point for digital transformation.
When procurement teams begin using cloud-based vendor management (VMS) technology, they can be the cog that turns the wheel for the rest of the organization. According to the Deloitte 2019 Global Chief Procurement Officer (CPO) Survey, procurement leaders realize the importance of their roles and are stepping up to lead the change. The survey found that procurement teams around the world understand that “digital transformation is becoming an imperative for top-performing procurement organizations. What’s more, digital transformation has become core to business transformation.”
Once modern VMS technology is in place, procurement departments play a key role in another part of the change process — creating cross-functional, collaborative teams that can ultimately cut costs and bring goods and services to market at faster rates.
Procurement departments have been traditionally viewed as tactical teams that supported other teams. With collaboration, procurement becomes strategic, looking at other departments’ budgets, uncovering ways to reduce costs and increase efficiencies across the board. They find themselves supporting organization-wide categories of spend. This can result in greater visibility into the company’s entire extended workforce, reduced risk, reduced time-to-fill and better achievement of each department’s key performance indicators.
Organizations going through digital transformation cannot, however, forget about including stakeholders at all levels, creating an atmosphere of transparency. Strategies and goals should be clearly communicated because the process can be one of continuous evaluation and adaptation. Goals are set, then strategies to meet those goals are devised. Metrics can then be established to determine progress and success (or failure in some cases, which then requires a revamp of goals or strategies).
Making sure the right skill sets are in place to match the requirements of updated technologies and processes is one more piece of the digital transformation puzzle.
Existing product owners and team members may need training related to their departments and the new technologies and processes in other departments. New team members, whether temporary or permanent, may be necessary to support the transformation, including change management coaches and others with specific skill sets not previously found within the organization — some companies even establish command centers for their transformations to help all stakeholders.
The importance of soft skills cannot be overlooked. When processes are automated and workers find themselves with new roles that require interaction with company leadership, other departments, new suppliers or other external partners, companies need to be sure to support learning here too. Procurement leaders who support soft skills improvement in areas like communication and relationship management find greater success.
Companies that brave a digital transformation need to find software providers that offer tools to meet their specific departmental needs and integrate with the other systems across their organization. When those systems talk to one another, manual tasks are reduced — giving workers more time to focus on strategic work. That shift can bring about more growth opportunities within and across departments, helping companies improve their competitive advantage and increase revenue.
In the next piece, second in a three-part series about the digital transformation journey, VNDLY will look at the importance of choosing technology platforms that can easily and quickly integrate with a company’s entire technology ecosystem, resulting in dramatically improved time-to-productivity.