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!!

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.

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!