Shirley is a Vice President on the Business Process Services team with Everest Group. In this role, she advises senior stakeholders of global services including enterprises, service providers and investors in their strategic mandates and initiatives. She shares her take on the digital transformation – what companies need to do to stay relevant and the trends she’s seeing in the market and the industry. Shirley will share her expertise on this topic at the Midwestern Regional SIGnature Eventin March and the Eastern Regional SIGnature Event in September.
Your presentation at the Midwestern Regional SIGnature Event is about buying digital services for your enterprise--why is this such an important topic?
Digital transformation is impacting entire business value chains. Companies that do not have a plan to migrate from traditional models to focus on digitally led solutions will become irrelevant and obsolete. How organizations approach the building of their digital capabilities can result in real market differentiation, and a large part of that strategy depends on how they partner with global service providers and vendors.
The swift evolution of the digital landscape means procurement and sourcing teams must understand the implications of buying digital services so they can support their business and functional customers in obtaining the best outcomes from their digital strategies.
Another year has rolled by leaving the same writing on the wall, only this time it’s louder and clearer: Digital transformation has well and truly arrived at procurement’s doorstep.
But up until now, it has merely received a lukewarm welcome.
In 2019, that could change. The winds of digital transformation are slowly but surely turning the wheels of procurement and savvy procurement teams are beginning to acknowledge its benefits. This is evident from how procurement teams are beginning to perceive digital transformation.
Consider this: A recent Hackett Group study titled, 2019 Procurement Key Issues, has revealed that digital transformation is a critical goal for a majority of procurement departments in 2019.
That’s because over the years digital transformation has moved its way up the ladder in the procurement department. In 2018, more than 90 percent of procurement professionals said they believed digital transformation will fundamentally shift the way procurement services are getting delivered within two to three years, according to a Hackett Group survey. Compared with 2017, this is more than a 10-percent increase.
Remarkably, the percentage of organizations that have a formal strategy for digital transformation more than doubled in the last two years, from 32 percent in 2017 to 66 percent in 2018. In the same period, the number of organizations indicating they have the resources to handle the transformation also increased, from 25 percent in 2017 to 46 percent in 2018.
This is a clear indication that in 2019 the gap between the promise of digital transformation and leveraging it to its full potential will narrow.
At the same time, the gap between CPOs who haven’t yet embraced digital transformation and high-performing procurement organizations that have already gained a first-mover advantage will widen. They’ll have a lot of ground to cover to keep pace with the latter.
Earlier this year, SIG launched The Sourcing Industry Landscape with the Art of Procurement, a podcast dedicated to furthering thought leadership and conversations with innovators who embrace technology to improve, influence and inspire procurement professionals.
Delivered through iTunes, the Art of Procurement website or your favorite podcast app, The Sourcing Industry Landscape has produced over 30 podcasts this year with CPOs, CEOs, company founders, product innovators, Rising Stars, Future of Sourcing Awards winners and finalists, procurement industry titans, technologists, entrepreneurs and the list goes on. Their breadth of knowledge, commentary on the industry and, perhaps most importantly, their hindsight and lessons learned throughout their career are all laid bare in these interviews.
After sorting through a year of podcast data and analytics, we’ve compiled a list of the five most popular episodes of The Sourcing Industry Landscape and they all have a common theme: elevating the role of procurement as a value-added strategic partner to the business. Whether you’re traveling by plane, train or automobile over the holidays, or staying home wrapping presents and prepping for holiday dinners and parties, download these episodes for the doses of inspiration and motivation that will take you into 2019 with a fresh outlook on your role and the changes that are becoming possible in the industry.
“It’s not just about cost savings--which was the traditional mindset of the Procurement function. It's about continually improving and re-evaluating how we’re buying to make sure we’re getting the best business outcomes.” - Neil Aronson, Head of Global Strategic Sourcing for Uber
Across all industries, margin and growth pressures are heating up. By 2021, 55 percent of technology procurement staff will require additional digital and analytical skills to enable their desired business outcomes (Gartner 2017). To succeed in this environment, CPOs must focus on closely aligning their team’s strategy and objectives with broader company goals. That requires changing the way their procurement and sourcing teams operate.
Changes of this nature call for a clear blueprint for transformation. And it starts with taking a closer look into current Procurement processes--and determining how success is being measured. A key insight: when organizations evolve alongside new technologies and market trends, so must the metrics needed to track performance.
Evolving Beyond Cost Savings to Accelerate Change
Historically, Procurement and Sourcing teams have been accountable for cost savings as the ultimate measure of success.
But as teams look to transform, they need to reshape their success metrics to chart a path forward. While anecdotal and periodic measurements are helpful, they are forgotten without a consistent stream of key performance indicators (KPIs) to indicate the overall direction of progress.
Stan Garber, President and Co-Founder at Scout RFP