Digital Roadmap Series: Define Priorities

Let’s recap what steps we have completed to get to this point.  First, we defined the problem that we are trying to solve.  Then, we took the opportunity to document the actual process and where it was not working for us.  Third, we used that process to redefine the process through digital technologies and other investments. 

The fourth and final step of building your digital roadmap is to prioritize all of the opportunities identified.  There are several ways to do this, so let’s discuss a few options for you.  (Note:  I would assess these compared to your culture and need to determine best fit for you.  You might be able to use a combination of the below.)

Option #1:  The “30, 60, 90, 120” day approach

This technique focuses on how quickly you can accomplish the goals at hand.  Your “day” buckets might be different, depending on the need.  For instance, it might be 3 months, 6 months, 9 months, 1yr+ or 6 months, 1 year, 2 year, etc…  This technique is good if you what to focus on getting some quick wins for those easier opportunities and the more investment intensive ones you be later in the roadmap.

Option #2: Return Based

For this option, you write all of the opportunities in a list and you have two columns to the listing – amount of pain you have today if the option is not corrected (labeled “pain”) and the estimated amount of value that could be delivered when corrected (labeled “value”).  For the pain column, 1 is least amount of pain and 10 is the most.  For the value, please do not get overly scientific on this.  We usually just identify if it is over a certain dollar value of opportunity and place a check in the column. 

Go through the listing as a group to get consensus on the pain and value ratings.  Then, sort the “10s” for pain and those with the check to the top.  Those at the top are the biggest opportunities to get placed on your roadmap.  Then, discuss as a team where each one should be placed on the roadmap (ideally with the top opportunities first, then the lower ranking ones in the later years). 

Option #3:  Sequencing

This one is focused on instances where your opportunities might logically need certain investments to be made first before making other investments.  For instance, you might need to invest in a Contract Lifecycle system before you can do advanced analytics on your contracts.  Or, you might need a P2P system in place before you implement RPA on the P2P process.  This option can be used with option #2 above, to help you sequence the roadmap of top opportunities.

Option #4:  Heat Map

This option I find most used by consultants that I have worked with.  This is where you plot your projects on a heat map to drive prioritization.  The X axis is value and the Y axis is difficulty of implementation.  There are four quadrants made on the map.  Lower left – easy to implement, low value.  Upper left – hard to implement, low value.  Lower right – easy to implement, high value.  Upper right – hard to implement, high value.   Ideally, you would consider the lower right as your quick wins that you would implement first and your upper right those opportunities that would be placed in the future.  You can also look at the lower left as potential quick wins. 

These are the four options that I have used most successfully in the past and I think the most common ways to approach developing your roadmap.   Most recently, I used the sequencing and the return based option together to build a roadmap.  It seemed like a great balance between driving value and sequencing where it was needed.

With that said, that wraps up how to build your digital roadmap.  In the coming weeks, I will be covering what is next because there is still a lot to do!  Topics will include now that you have the roadmap, how do you gain approval for the investments and how to manage the changes with your teams. 

I would love to know your thoughts on the digital roadmap series and if there are any other suggestions that you might have to share with others.  Please feel free to comment and share. 

Have a great week and shine on!!

Digital Roadmap Series: Define Where You Have Opportunity to Improve

In this series, we are learning how to simply and quickly get on the digital journey.  Last week, we learned about defining the problem statement.  This provides focus to the strategy and gives you a true north for the team.  This week it is all about where you have room for improvement.

Long ago, I was taught a valuable lesson.  I took someone’s process flow and assumed that it reflected what people were actually doing.  It bit me in the booty big time.  (Not sure if that was appropriate, but roll with me here…)

What I learned since then it that there is a big difference between the process flow and what is actually occurring.  In this step, we will take the time to clearly define what is actually occurring and where there is opportunity for improvement.  This is important to do because if you are going to change something, you can create a clear “as is – to be” to describe the change.  It also is critically important to understand what you should prioritize first in your journey.

To identify your opportunities, here is the approach I have found works best.

• Before the meeting gather all “process flows” that people have within your scope.  Ideally, you do not want to build the actual process from scratch, but if you have to, it can be done.  Take all of those process flows and try to combine them into one flow.  Indicate where there was conflicting information.  I have found that using Visio is the easiest way to create process flows, but there might be up and coming tools that you prefer.
• Get the same group of people together as the problem statement meeting.  In fact, I recommend this being held with the problem statement meeting, especially if you are flying people in or holding a 2 day session and get it all done.
• Post the process flow you created from your examples collected up on the wall.  Make it big, because we are going to draw all over it.  If you do not have a process to start from, put up blank paper because you are going to need to create it in the session, my friend.    This will take longer, so plan that into your schedule.  I would plan for 3 additional hours.  Just had to do this myself and it was not fun…sorry.
• Next, I like to reuse the same technique as in the problem statement session. Have everyone use their sticky notes again to write down what is not working for them within the process. Again, one idea per sticky note and then have them place it on the process flow on the wall. o You will notice typically large concentrations of sticky notes at the beginning of the process and certain steps along the way. Those are likely your biggest areas for improvement.
• Then, walk through each step of the process with a big red marker (or other bright color of choice).  Touching on all of the below:

o   Is this what actually happens today?  If not, change it on the wall.

o   What does not work well within this process step?  Write down why.

o   Does this step create a rework loop (where you go back to previous steps to redo work)?  Mark the loop.

o   Do you have all the information or data to make an effective decision?  Write down what data is missing.

o   Is the process step manual?  Mark that down.

o   Prone to error?  What errors, mark it down.

o   Does it take a long time to complete? Write down the estimated time if known.

• Now, you have this crazy masterpiece on the wall and a ton of areas for digital and process improvements. To close the session, create a summary of the session with the people in the room, listing the top areas of opportunity that were identified. REMEMBER – you are not solving in this session. This is a listing of opportunities to tackle.  
• If you want to go above and beyond, you can break out Visio (or enlist someone with that capability), to document three artifacts from the session.  The process flow, the marked up process flow, and the summary of opportunities. 

With that completed, you have a problem you are trying to solve and a listing of opportunities to start tackling.  You are well on your way to having a digital roadmap.  Next week, we will be covering re-imagining the process and building the plan.  

Step One to Developing Your Digital Roadmap

Let’s get one thing straight before we start into this process.  I was at a different conference several months back and there was mention that with digitalization – process is dead.  It shocked me.  Maybe I am not thinking about this correctly (and please chime in if I am wrong), but I do not want to apply digitalization on a broken process or on bad data.  Seems like the ol’ equation of just getting crap faster – and we have already lived through that too many times.  With that said, I do firmly believe that the processes we have today can be radically re-imagined and machine learning can help us with the data problem.  So, if you are in the “process is dead camp”, you might not like what I will be recommending in this posting.  Just a word of warning.  J

Ok, now that we are clear on that, where to start.  Step One is to define the problem you are trying to solve.  This is often overlooked and critically important, especially when you are trying to explain why you are changing to your teams.  Without a problem defined, you do not know if you are successful in solving your needs, how to communicate the change, and how to keep your scope locked in. 

Here is how you go about defining the problem:

1.  Pick a scope you want to work on.  Think of it maybe in terms of I want to digitalize procure to pay or source thru pay.  Be deliberate in your scope, as it sets the course for the rest of the work we are doing.
2. Define a team of people who are involved in the process.  Please remember those people upstream and downstream to the process – like in procure to pay – your end users and your suppliers.  Also, try to keep to it a group under 15.  If you feel like you need more people, it is a good indication that your scope is too big.  ;-)  Gotta love control points!!
3. Get those people in a room for a 1 to 1.5 hour session.  (Note – You can combine this session with the next session that I will talk about next week, making it a 4 hr session in total. Or, you can do a 2 day workshop and do all the steps I will describe.)
4. During that session, describe that you are trying to understand their pain points, what they believe could be done faster/more effectively, etc... It is very important to be humble and welcoming of all and any ideas. Also, share how this work ties into the bigger picture of what you are or the company is trying to achieve.
5. To collect the ideas, pass out sticky notes and have the attendees write one opportunity per sticky note.  This technique is call individual or silent brainstorming.  Give them as much time to complete as appropriate.
6. Once everyone is completed, you stick the notes on the wall and start putting them into themes and naming those themes.  You will be amazed how clearly the opportunities start popping out before your eyes. 
7. Now here is the fun part, you discuss those themes as a group, gaining a better understanding of the feedback.  You and/or your team should be in listening and “5 why” mode (asking why or clarifying questions).
8. Lastly, and the hardest part, is co-creating the problem statement.  Taking the key words in the themes, you create one statement that gives focus to what you are trying to solve.  It should read something like, “Due to the lack of information when we are making decisions, we have to spend valuable time researching supply markets, identifying suppliers, and making gut decisions, thus delaying the process further, impacting new product introductions and our stakeholder relationships.”  Totally just made that up, but hopefully you get the point. 
9. Keep that problem statement in the front of the room for all of the next sessions.  This is now your true north.  It should be used during the sessions to question if you are staying focused on solving the actual problem. 

Like I said before, hopefully, you will find that these are really simple techniques that do not require any investments other than your time.  The hardest part of the session is keeping it an open discussion, being objective, no defensiveness, and keeping people open to all feedback and ideas. If you do not believe that you can facilitate the meeting in an objective way, then maybe enlist a trusted colleague or a top performer to have the opportunity to facilitate.  Note:  I have had a lot of squirming in seats and even some emotional reactions from attendees that were just plain uncomfortable during the session.   If that happens, it is ok to take a break and regroup in a few minutes, as the intention is not to make people uncomfortable, but to get everything out on the table.   

Good luck with step 1.  Would love to hear from you all once you hold this session and how it goes.  Would also love to get questions on the above if something is not clear.  Happy to help in any way I can.

Are You Ready To Lead a Digital Transformation?

Hello strangers.  It has been awhile since my last posting.   I have been on quite the adventure over the last year at work and at home (all great things, but took my focus).  However, I feel like I have my blogging mojo back and I have time to dedicate. 

With that said, I had an amazing experience at Generis’ Supply Chain Summit in Dallas, TX earlier this week.  The presenters were mostly practitioners with a subtle mix of suppliers. It was great to hear the up and coming trends, what companies are already doing, and having the opportunity to meet so many talented people is always a great motivator. 

At the conference, I had the opportunity to present on a lot of the concepts that I have written about on this blog (video will be available soon, but if you do not know the concepts, please read the historical posts), with a particular focus on Sourcing Acceleration and the type of talent we need in Procurement to meet the consumer centric, individualized Supply Chain needs of the future. (Note - for some the future is very much now). 

In order to meet those needs, we have the perfect opportunity to get on the digital bandwagon.  95% of respondents in a recent Hackett study said that digitalization will drastically change Procurement in the next 2-3 years.  So, do you have a strategy to apply machine learning to make recommendations for you?  Do you have a pilot for RPA to automate your Sourcing processes?  Do you have an RFP scenario optimizer?  Have you thought of how to get data on demand for all decisions that are being made by your Sourcing team?  Do you believe that a simple sourcing event could take seconds and a complex one under 4 weeks?  What if you had a potential supplier database at your fingertips? 

Did I just overwhelm you?  Sorry.  You want some good news?  Unlike the trends of the past, you do not need to invest tons of money in this.  I do not even believe you need a slew of consultants to tell you what to do to make this happen.  And, you can move pretty quickly, as these solutions are fairly simple to implement (get that ERP implementation out of your head…).

Because I believe in Procurement so much and that we can make this happen TOGETHER, I would like to share in my upcoming posts about a) how to develop your digital roadmap and b) a suggestion around how to implement the changes, while getting engagement from your teams to drive the change. 

The concepts that I will share, I have learned through the several transformations that I have lived through and/or led.  Unlike blockchain, 3D printing, machine learning, these concepts that I will be sharing are not new but can be applied to this need. 

If you are in, please follow the updates in the coming weeks on Saturday mornings and share with a friend.  It would be my wish for all of you to be digital rockstars for your company by the end of the year.   

Next Gen of Procurement Talent

When is the last time you took a serious look at your Procurement job descriptions?  I would take a calculated wager that it reads something like this:

"Come join our team at Acme. We are the best in the industry and have top notch benefits.  We are seeking a candidate who has 10+ years of X commodity experience and can negotiate better than most. This candidate must be able to drive TCO and know Y Procurement system. Must have good communication skills and know MS Office."

Ok, maybe it is not that bad....but might be close.  After wiping off the figurative dust from the job descriptions - do they actually reflect the type of talent we need NOW and years into the future?  To get Procurement unstuck, we must (yes - it is imperative) seek new skills, new thought, new talent.

Change Makers:
If you have not noticed yet, the world is changing at a rapid pace. In fact, society in general is looking for new vs established.  Think about it - business that once touted established in 1910 aren't doing so well anymore. Some no longer exist. Those that are still here are changing their business models to compete with what is new.  Beyond that, there are new technologies, new business methods, new...new...new.

When looking for talent, are you looking for those leading that change or for people that have change done to them?  It would be great if instead of looking for min. years of experience, to seek how the candidates have changed the "world" around them for the better.  The internal stakeholders and your customers are expecting change and are in some ways driving change. To build those robust stakeholder relationships, to drive innovation, to solve business issues, Procurement needs those who are proven change makers.

Influencers:
When I first started in Procurement, I spent many a night learning negotiation techniques. Things like the best negotiation technique is silence. Or, stratify your concessions, thereby never giving in to your must haves. However, with the opportunities before Procurement these days, I firmly believe that we do not need more negotiators; we need influencers. The key difference is that negotiations seem to have a finite end in mind while influencing requires an ongoing relationship. It required a deep understanding of the people you are working with, an understanding of their goals and what drives them. Notice - I am not only talking about suppliers here, but also stakeholders, c-suite executives, and matrixed counterparts.  Great influencers have great relationships internal and external to the company. They also make tremendous progress against their goals.

Those with Grit:
We have so much to do in Procurement to take it to the next level. And, it is going to be hard. It will require paradigm shifts and tough situations. Therefore, we are going to need team members who will prevail through  it all. We need those who will not give up or give in easily. We should be looking for those who have experience going after a goal and pushing through even when it seemed impossible.  Gritty people are always looking to their goal(s), always looking for ways to improve and for feedback. They are purposeful in why they are seeking a spot on your team and how it helps them attain their goals.  And, when those intersect, they will be a force to be reckoned with.

Techies:
To keep pace with technology is an endless pursuit. However, it can, when implemented properly, be a game changer. Those who have specialized tech skills focused on automation, AI, big data analytics are and will be tremendously valuable to Procurement. When applied correctly these technologies will enable rapid sourcing, predictive analytics, and will automate most transactional purchasing processes. If you want to keep pace, hire talent now that can manage and deploy such solutions well into the future.

You might be thinking that these attributes just described are hard to identify on a resume. That is 100% true. Some of these are even hard to identify successfully in a traditional interview.  That is alright. Once you are done rewriting the job descriptions, then next up will be changing the interview format!  Get those creative juices going and go hire someone great for now and for years to come!

The Perplexity of No PO, No Pay

Here is a common conversation I have had with companies.
"We have a No PO, No Pay policy," Jane from Acme said with confidence.
Me, "Really, do you? What is your compliance to No PO, No Pay?"
Jane, "Well, about 20%."
Me, "Does that exclude your documented exceptions?"
Jane, "Yes."
Me, doing the math in my head, "What is on is your exception list?"
Jane, "Well, legal, marketing, utilities, ...."
Me, I have now stop listening and ponder to myself that the "policy" is more like a guideline.  And Jane is still listing her exceptions.

I feel for Jane.  I have been Jane.  I think if we reflect back and really challenge ourselves, that we have all been Jane or still are.

So, why is this so hard?  Why do we talk about having No Po, No Pay policies when we really don't?  It is such a simple concept, but so complicated to truly achieve.

Executive Sponsorship
This is one of the main reasons that these policies fail.  Often the executive sponsors are a name on a back of a tee ball shirt vs being an active sponsor.  A sponsor who will hold other executives feet to the fire when they ask for an exception because they are unique.  This sponsor also needs to clearly understand the value of such policy and promote it across the company.  A sponsor who does not ask for exceptions him or herself.  Unless you have a sponsor like this, your policy is at risk.

Measurement
Do you have a goal that you are striving for with your policy?  Do you have a clear definition around how you will measure that goal?  Please, I beg you, please do not exclude your exceptions from this calculation.  If you exclude your exceptions, you are giving yourself a false warm blanket, cozy feeling versus a health dose of reality.  The definition of your metric should be as simple as invoices paid on PO/total invoices paid.

Enforcement
When I think of enforcement, I think of two areas - what is your control point in the process to actually enforce the policy and what are you doing with the data to provide visibility to your sponsor and other "enforcers" across the company.

Let's start with the control point.  This is simple, but complicated.  The control point must be that if AP receives an invoice that is not referring to a PO, it must be rejected to the supplier.  Then, the supplier must get a PO and resubmit the invoice.  That part is simple.  The complicated part is making that happen.  You have to have a good process and technology that allows you to communicate effectively to suppliers.  There will be a problem if your rejected invoices go into a blackhole.  Also, the suppliers need to be fully aware of this change, as they need to take action vs just resubmitting the non PO invoice over and over again.  (Been there, done that - it is not good.)

If you have the control point activated, then you also have all this lush data that you can use to change behavior within your company.  Using that data is key.  You could have a three strikes and then you are reported to executives in your organization for prompt action.  You could provide dashboards weekly.  The possibilities are endless, so please walk through that door.

Exceptions
This is my nails and chalk board moment.  Exceptions....eekkk.... Exceptions are like the little thread that you pull on and unravel a beautiful shirt.  Once you open the door, it is so hard to control.  Here is a concept for you - do not allow them.  If you receive an invoice, a PO should be referenced or at least in the system.  If there is no invoice, like taxes, dues, etc...then no PO is needed.  You might be thinking that is impossible, but maybe that is a large reason for the lackluster implementations of this policy.  Until we start thinking differently about this, we will continue to struggle.

And, that is why this is a simple, but complicated policy to implement.  At the end of the day, actually tackling No PO, No Pay gives your Procurement teams such an advantage and totally worth the effort.  Good luck all!