The US national debt reached zero for the first and only time in its history.
American readers, dwell on this! Then challenge your incoming President to keep one of the few great promises he made and cut government costs (and, hopefully at the same time, national debt).
The first transatlantic telephone service is established from New York, New York to London. Timeline of the Telephone
That’s right … the transatlantic calling we’ve been taking for granted since we were born is a relatively new thing, with the first call taking place 7 March 1926 and the first commercial service being offered a mere 89 years ago today.
This post concludes our series in which we note that an organization, which needs to master the three T’s to excel in Supply Management, must not only get a grip on modern technology, but acquire and adopt modern technology (in daily use) in order to begin its best in class journey.
In Part I, we noted that just having the right talent and transitional strategy is not enough, that talent and transition must be powered by modern technology. In Part II, we discussed a classic Chief Executive article that purported to provide seven strategies for driving technological advances, as there are not enough articles on the importance of the right technology in an enterprise (and, as such, it caught the doctor‘s attention), and noted that while it was a good start it didn’t really explain the process of getting technology acquired and adopted.
Then, in Part III we focussed on how the key to acquisition of a technology (that an organizations wishes to adopt), which requires budget that the CEO and CFO does not often want to allocate, was to identify one or more benefits important to the C-Suite — namely a quantifiably realistic ROI, visibility into data or processes of interest to a key C-Suite member, or support for an organizational initiative being championed by a C-Suite member. And yesterday, in Part IV, we focussed on the 4 P’s that define key elements that must be present in a technology to enable adoption (and that define necessary, but not sufficient, conditions).
And we left off indicating that in this, our fifth and final post in the series, we would translate how you take an adoptable solution and begin your journey on the road to adoption.
While there can be no guarantee of success, as success ultimately requires not only a good process transition, but a talented person spearheading it, and even the best process can flop in the hands of an inappropriate individual, this process does provide a foundation for adoption and might just be your best class of getting an appropriate solution adopted.
Identify the value to each function you want to adopt it.
While a few people will be screaming, screaming, screaming (along with some guy screaming in a leather jacket) for a new solution, most will be very resistant even to the mention of a new solution. There will be a strong resistance to change. There will be many reasons for this. Previous solutions didn’t address core needs. Manpower requirements didn’t decrease or value extracted didn’t increase. The previous attempt at a solution upgrade was abandoned. Etc.
Unless there is a clear value, who would even want to look at it given the average organizational track record in solution selection? So if you want an SRM – what does Procurement, Operations, Finance, and the C-Suite, for starters, get out of it? (Hint: many of the answers can be found in posts in the extensive SI archives.)
Identify those who could be champions in each function.
People want to adopt software that will not only be easy to use, and make their live’s easier, but that their peers will use. Everyone ones a collaboration platform, but few want to be the first to adopt. You need to find the champion who will both be the first to adopt but also convince their peers to be next in line, so the collaboration happens and the benefits materialize.
Determine what each champion wants, really, really wants and identify, in detail, how the solution will give it to them.
Do they want ease of use? If so, prepare a short, sweet demo that shows them how to do their most time-consuming daily tasks in a matter of minutes, and with ease, in the new solution. Are they looking for savings? Work out how they can get their ROI from the solution, share that process, and walk them through a what-if. Do they want collaboration — get a few people from the selection team online and show them how great collaboration can be. Then show them and get them hooked.
Prepare an easy to implement train-the-champion program.
Once you get the champions on board, you will need them to get more people on board. You will need a program that will help them identify
This is not a train-the-trainer program. That comes after there is wide adoption and you want to mass train on advanced features. You need adoption first — and you often need it reasonably quick — and that’s what most train-the-trainer programs miss. The champion should not be the one setting the team up or the expert, but the one who interfaces with the support team to get the team set-up and knows where to direct each person who needs help (and make sure that help is received, and understood quickly).
In other words, don’t skip to the train the trainer or show the ease step — you first have to find the champions and first users (who might eventually become the trainers, but might not — maybe the last to adopt are the best at training but the worst at selling, and convincing someone to try something new is really a type of internal sales), get them interested, and get them on-board. Adoption starts from there.
This post continues are series in which we note that an organization, which needs to master the three T’s to excel in Supply Management, must not only get a grip on modern technology, but acquire and adopt modern technology (in daily use) in order to begin its best in class journey.
In Part I we noted that just having the right talent and transitional strategy is not enough, that talent and transition must be powered by modern technology. In Part II, we discussed a classic Chief Executive article that purported to provide seven strategies for driving technological advances, as there are not enough articles on the importance of the right technology in an enterprise (and, as such, it caught the doctor‘s attention), and noted that while it was a good start it didn’t really explain the process of getting technology acquired and adopted all it really did was emphasize the importance of technology, which is a good start, but not the end goal.
Then, yesterday, in Part III we focussed on how the key to acquisition, which requires budget (that the CEO and CFO don’t want to allocate or give up) is to identify one or more benefits that are important to the C-Suite. More specifically, a quantifiably realistic ROI, visibility into data or processes of interest to the appropriate C-Suite member, or support for an organizational initiative being championed by the CEO or CFO. The ROI doesn’t have to be large, and won’t be for an efficiency solution, but should be enough to make a solution attractive, especially if it is focussed on effectiveness.
We also mentioned that acquisition is not enough, the solution has to be adopted. On average, a modern Procurement solution only reaches adoption rates of 25%. This means that of every four individuals that should be using, or referencing, a solution in some way, only one actually is. A solution not adopted never reaches the expected levels of efficiency or effectiveness and never delivers an ROI.
But adoption is hard. People resist change. People resist new systems. People are tired of broken promises (as vendors have been promising to deliver value and usability for decades that never materialized in the nineties or noughts). They don’t need another piece of technology that doesn’t work.
So how do you ensure adoption?
We left off yesterday indicating the keys were the four P’s:
Note that the first key is not to acquire a solution that supports the current process, but that supports the desired, lean, optimized process. Remember that the second key to Supply Management success is transition — even if your process was best in class and suited you well when it was instituted ten years ago, that was then, this is now. Processes have to evolve with your business, which likely isn’t the same as it was 10 years ago. Make sure to review and define all of your process needs appropriately and pick a solution that matches and enables them, not what you have now and not what your competitor uses.
Then, be sure to understand not only your current enterprise software ecosystem, but the desired software ecosystem you are working towards (as this defines your platform). You don’t have to know which solutions you want to adopt down the road (as the best today might not be the best tomorrow), but if you have identified CLM, SRM, and decision optimization as the next three technologies you need, and you start with CLM, make sure that it has the ability to output relevant supplier-related contract data to SRM systems using standard formats or APIs and that it can take in award allocations in standard formats from dominant decision optimization solutions. A Best-of-Breed solution in a vaccum is rarely used (and why the adoption rate of most Supply Management technology at firms that acquire it is a dismal 25%).
After that, evaluate the UI. While its true that sometimes the best and most powerful solutions are those that still look like they were designed in 2005 (including a few solutions the doctor recently reviewed that, power-wise, almost blew his socks off), you have to consider the psychology of the situation. While a power user will want the absolute best, 90% of the individuals who will need to use the solution are not power users and have been programmed by consumer platforms and social media to believe that anything that doesn’t look modern isn’t (and shouldn’t be used). Sometimes the 80% solution with a consumer-ish, modern, friendly UI is the best starting point. We’re in a culture obsessed with polish, so just embrace that fact and save yourself some major headaches.
(And you can always supplement it with an archaic looking BoB solution for your power users later. Some of the best-in-class organizations actually do this. For example, they’ll use a Zycus or similar modern looking S2P suite on the front end, but then on the back end the power users will be using Trade Extensions or Keelvar for decision optimization and TAMR or Spend 360 for spend analysis. And they get mega returns on the efficiency AND effectiveness charts — more than one would expect even though they pay two license fees. The easy to use suite gets buy in and efficiency goes through the roof when they get 90% utilization instead of 25%, and the power the super users get from the BoB solutions doubles average savings percentages. This isn’t to say that the BoB solutions aren’t user friendly, they are, but you again have to consider the psychology. Because solutions like Trade Extensions and TAMR have so much power under the hood, the average user — who just needs to check a contract, do a small spot buy, run a spend report — still believes that they must be difficult to use. While complex solutions were hard to use 20 and even 10 years ago, this is no longer the case, but the stigma is hard to overcome. Sometimes the best thing to do is adopt something easy, roll it out, get everyone on board, buy the killer app for the power users, let them get great results, let them show everyone else, now used to modern technology, that it’s not so hard, and then gradually replace the entry level solution with the powerhouse solution where appropriate. And if each gives a 3X to 7X return, paying two license fees is a no-brainer from a financial viewpoint.)
Finally, make sure it enables collaboration with built in messaging, document exchange, version control, etc. If it’s not the central portal (or virtual center of excellence) that connects everyone on the team in a collaborative fashion, it’s not modern, and its lifespan will be limited. And no one wants to learn yet another tool with a built-in expiry date.
And that’s the foundation of how your organization can select a tool that might actually be adopted.
But how do you translate adoptability into actual adoption (which is the real key to technological advance in an organization)? Stay tuned!
In our last two posts, which noted that an organization must master the three T’s in order to excel in Supply Management, and that a classic article in Chief Executive caught SI’s attention, because so few articles focus on the importance of technology to Supply Management success. This classic article was good, as it focussed on the importance of technology for a chief executive, but not great, as it didn’t really provide strategies for driving technological advances (as it promised), just advice that will help someone stay up to date on existing technological advances.
As SI noted in Part II, the key to technological advances is not just awareness, but acquisition and adoption – by all!
So how does an organization translate this awareness into acquisition and adoption?
First it has to acquire. Acquisition is tough, because it requires budget, which is something that the CEO doesn’t want to give and something that the CFO doesn’t want to give up. In order to get an acquisition approved, there has to be a benefit that the CEO or CFO wants. In other words, there has to be a quantifiably realistic ROI, visibility into data or processes that one of these individuals wants, or support for an organizational initiative (such as sustainability, home-sourcing, digitization, etc.) that the executive is championing. Hitting multiple buckets, of course, increases the chances.
The ROI doesn’t necessarily have to be 2X or 3X (although if the up-front price tag is big, or the technology falls into spend analysis, decision optimization, or SRM, it should), but it has to be there, and if it’s less than 2X, it should add a lot of efficiency.
One has to remember that technology tends to fall into two buckets:
If the technology falls into the efficiency category, then the ROI is not going to be huge, as its main benefit is to free up manpower for more strategic activities (that should be based on effectiveness oriented technologies) to find new sources of value. So an ROI of 1.5 to 2.0 is fine. But if the technology falls into the effectiveness category, the ROI should be a realistic 3X … otherwise, it’s not really that effective, is it?
Thus, to pass the acquisition threshold, it’s critical the technology can be properly bucketed and a realistic ROI model, and justification therefore, be presented to the CFO and the CEO.
But that’s the easy part. The hard part is the adoption, and, in advance, convincing the sponsors that adoption will happen. Since adoption is highly dependent on adoption en-masse by the workforce, that often has no input into selection, it can be tough to paint a realistic picture of this happening, but you can beat the odds that software will be adopted by choosing carefully (and even convey this during your supplication for silver).
How do you beat the odds? We’ll dive deeper into this in our next post, but some key points to address at a high level are:
More to come …