In our first post, we noted that an organization must master the three T’s — talent, transition, and technology — to excel in Supply Management, and lamented that an average organization has not yet (truly) mastered any of the T’s, with technology often being the T in which the organization is the furthest behind in. We lamented on the lack of advice on what to do to drive organizational advancement and dove into a recent article from Chief Executive on “Seven Strategies for Driving Technological Advances” in the hopes that it might provide a guide for an organization wishing to catch up on the technology curve.

Unfortunately, after reviewing the piece, the verdict was not very good. While the article was well intentioned, and gave SI hope that the adoption problem was understood, the advice contained within really wasn’t that good. While it would certainly encourage a progressive leader to be more receptive of new technology, it’s not going to encourage the organization as a whole. So what is a Supply Management Leader to do?

First we take a page from BravoSolution’s playbook on High Definition Adoption Measurement and Measure what the organization is using, and, most importantly, what the organization is not using relative to the organizational goals.

For example, if the organization obtained an e-Sourcing platform with e-RFx, e-Auction, and Decision Optimization a year ago, and 50% of the team is using the e-RFx, 25% of the team is using the e-Auction solution, and only 5% has ventured into Decision Optimization, there are obviously problems across the board. First of all, unless there is a really esoteric category where all of the suppliers are stuck in
That 70’s Show, just about every Supply Manager should be using the e-RFx. In addition, it’s likely that 25% of the categories could literally be set up on e-Auction auto-pilot and that the additional savings that may be obtainable on another 25% of the categories would be worth the extra effort, indicating that at least half of the Supply Managers should be using the e-Auction tool. And even if the team is not ready to trust allocations from a decision optimization tool, at least half of the team should be using the team to compute a minimal spend baseline to guide analysis and negotiations. This means that usage of each tool is at most 50% of what it should be.

The next step is to Identify the likely causes of non-use. Is it lack of awareness of the tool? Is it lack of awareness of the potential capabilities of the tool? Is it lack of awareness of the key features of the category that would make it suitable for e-Sourcing? Or is it, more likely, Fear of the Unknown?

Aware of what will hurt you
You’re prepared to remain this way
So sad yet safe with your afflictions
Afraid to start a brand new day

These words, writ and recorded by Siouxsie and the Banshees almost twenty-one years ago, are probably the best descriptor of the average pseudo-technophobe in a modern multi-national Supply Management organization. They know not using technology will hurt them, but they are safe with their affliction, and prepared to remain technophobic as they are afraid to start a brand new day — and possibly a brand new, technology enabled, career. And it’s completely illogical. It’s like

We all get the strangest feeling
When we’re standing mighty tall
To jump from seventeen floors
And crash into free fall

It just doesn’t make any sense. If this is the case, you have to identify it. Then, once you’ve identified the issues holding your team back, you have to Resolve them. Start by identifying common-sense resolutions that will be comfortable and affect the team on an emotional level, even if such resolutions are not the most efficient or logical. For example, if the issue is that a Supply Manager doesn’t think auctions are appropriate for a category that he can save 20% on simply by pitting the two leading office supply vendors off each other, you may have to ignore the fact that, if the volumes are high enough, this will enable suppliers with 3PL capabilities to also bid directly and all bids to be compared on landed cost and instead focus on how it will automate data collection and award and allow the Supply Manager to get the same result with much less work. This will in turn allow him to run more events, save more money, and maybe get a bigger bonus. And if it’s fear that the technology acquisition is an intermediate step to manpower reduction (once everything is automated), you have to demonstrate to the team that it can’t run on auto-pilot (even if it can for a few simple e-Auction categories) and that a human always has to drive the technology to get results (and disable any auto-pilot modes that may be built in). Once the team realizes that the tool is to enable them to do their job better, or that it is easy to use, then you can always turn on automation or incorporate advanced features.

Then, once the initial trepidations are overcome, you have to Train your team on the Technology. Start with a SWOT analysis viewpoint as the team has to understand the strengths, weaknesses, opportunities for cost avoidance and reduction it will enable, and the threats that the technology poses to the organization if your competitors use it and you don’t. Then move onto transition training and demonstrate how to move from current, mostly manual processes, to newer, mostly automated, technology-enabled processes that let the team focus on the strategic opportunities and leave the time-wasting tactical processes to the technology. Finally, focus on category specific training tailored to the use of the technology for strategic and high value categories.

Finally, you have to Hatch the organization out of its shell. This means getting off the egg and letting them break free. This will require Trust, Empowerment, Acknowledgement, and Mentoring on their terms, not yours. You have to trust them to their jobs and empower them to make decisions. You have to acknowledge that their will be mistakes and a learning curve, but with mentoring and guidance, they will be identified, corrected, and the organization will be better for them. In other words, you will have to rely on true TEAMwork. Not an easy task, but a doable one.

In other words, the key to Technology Adoption is MIRTH (Measure-Identify-Resolve-Train-Hatch). Furthermore, MIRTH is a suitable acronym because, when done right, and technological advances pervade your organization, there will be gaiety, jolity, and joviality — a state of affairs that is sadly lacking in many organizations today (that are not on the Top 100 employers list).

In our last post, which noted that an organization must master the three T’s to excel in Supply Management, we lamented that an average organization has not yet mastered any of the T’s, with technology often being the T in which the organization is the furthest behind in (as most organization’s have people, which is a talent foundation, and process, which is a transition foundation). We then lamented on the lack of advice on what to do to drive organizational advancement and adoption in the organization. Certainly training and incentive will help, but it obviously isn’t enough in the average organization as an average organization in Supply Management is way, way, way too far behind the curve. (So far, in fact, that Wile E. Coyote comes closer to catching the Road Runner than an average Supply Management organization comes to obtaining a technological advance that is still relevant.)

SI’s proof? The extreme low rate of adoption of supplier performance management (SPM), spend analysis, and decision optimization in an average Supply Management organization — three technologies which consistently deliver double-digit (percentage) savings opportunities that have been around for over a decade and that are still sparsely adopted in an average organization. (And while many organizations may claim to have spend analysis, the reality is that most of these organizations are only using old-fashioned OLAP-based spend reporting technology.)

As a result, SI was very interested to see that Chief Executive recently published a piece on “Seven Strategies for Driving Technological Advances” because any piece of advice that can help spur technology adoption is useful. But the question is, was the advice good, and was it enough?

Chief Executive had the following pieces of advice, which will be discussed one by one.

1. Be a student of technology best practices.
   The article notes that leaders should strive to understand their industry’s best technological practice, so that they can combine their knowledge with that of the CIO for greater impact and decision making, but this is not going to drive technological adoption. While this may lead to better technology selection, this is not enough.
2. Connect weekly with the CIO.
   This will definitely help the Supply Management leader to understand the impact of business decisions throughout the technology lens and, in turn, the impact of a poor technology decision on the business, but, as with the first recommendation, all this will do is lead to better technology selection, not adoption, which is the key to advancing technology in the organization.
3. Encourage constant IT learning in the Department.
   This is a good start, because, once a Supply Management professional understands what a new piece of technology can do, he or she may be more open to trying it, but if it doesn’t work right away, it might be labeled as junk or inappropriate and left on the technology shelf.
4. Communicate and share best practices through technology.
   This is a good practice, as it will increase the organization’s overall comfort level with technology, but unless the organization understands that modern technology is a best practice, the extent of technology adoption in your organization might not go beyond Twitter (which makes you stoopid [CNet]) and Facebook (which is ruining society).
5. Think benefits, not features.
   This is very good advice, because organizations (that use supplier-generated RFPs) that fall for the feature buffet typically end up getting software solutions that don’t do what the organization really needs them to do, which is enable talent to manage transitions that result in cost reductions and avoidance. However, just selecting the platform that will provide the organization with the most benefit does not guarantee that the platform will be used.
6. Prepare to invest.
   The article notes that it’s important to be realistic about how much investment is required to drive beneficial technological advancement within your business, but doesn’t indicate what the investment needs to be in — leaving you to believe the investment needs to be in the technology. Typically, this is not the case. Even enterprise software systems are very low cost these days compared to the investment that was required a mere ten years ago. The necessary investment, which could be significant, will be in the training and transition programs required to secure the adoption necessary to make the technology investment a success.
7. Establish meaningful metrics for your CIO and yourself.
   Measure the technology in a meaningful way and hold your team accountable to the results. Well, the technology should certainly be measured, and the team should be accountable for what they do, but the reality is that until they can use to do their jobs more effectively than they are doing their jobs today and feel comfortable with the technology, they’re not going to use it. Until their trepidations are overcome, the team will assume it’s just a fad and wait a week to see if you forget. Or a month. Or whatever it takes.

The verdict? While this article was well intentioned and gave SI hope that the adoption problem was understood, the advice contained within really wasn’t that good. While it may encourage a leader to be more receptive of new technology, it’s not going to encourage the organization as a whole, and besides the investment advice (and this is assuming the author meant training the talent for a transition), it’s not very adoption focussed. So what do you do? We’ll discuss that in our next post.

Any organization that wants to excel in Supply Management today needs to master the three Ts:

• Talent
• Transition, and
• Technology.

Yes, SI is using talent instead of people and transition instead of process because PPT has been failing us for years. (Which is not surprising considering that death by PowerPoinT is a leading cause of corporate suicide.) Supply Management is not a function where HR can fill a room full of warm bodies and get results. Some organizations still think so (as illustrated by the fact that a few organizations have approached consultancies looking to expand their global supply management organizations by 200 overnight), but it’s not the case. The people need to be talented and that talent needs to be managed. This is an issue that has been discussed a lot recently on SI and will be discussed more in the months to come.

In addition, Supply Management is not a function where Operations can just take some random processes from a best-in-class competitor and treat them as gospel. The reality is that every organization is different, and every process will need to be customized, or transitioned, to fit the Supply Management organization before any results will be obtained. Similarly, supply chains are fluid and organizations need to adapt to unexpected changes that will continually arise. As a result, the processes will have to be fluid and capable of being transitioned to accommodate new suppliers, distributors, distribution methods, and requirements. This is an issue that will be taken up more in months to come as SI renews its discussion of Your Next Level Supply Management Journey, which will be the topic of an SI white-paper that will be released in March.

However, the technology element hasn’t changed. The reason — the average organization still hasn’t adopted modern technology, including half of the must-have solutions SI identified in its recent white-paper on the “Top 10 Technologies for Supply Management Savings Today” (minimal registration is required). When the first pieces of feedback is that “we don’t have the top four technologies on this list”, that’s not a good sign. Especially since all of these technologies have been out there for at least ten years! It’s true that a few of them were not user friendly until about five years ago, but that still shows the burning need for modern technology in an average Supply Management organization. (Especially since SI has not addressed the Top 10 Supply Management Technologies an average Supply Management organization will need tomorrow — which is much closer than any organization will want to believe. The King may have proclaimed that tomorrow never comes back in 1971 when he sang the words of Ernest Tubb, but that was another time and another place.)

So what can we do? Certainly a focus on adoption, which includes usability, training, and incentive will help. But is that all? Needless to say this conundrum drew my attention to a recent article over on Chief Executive on “Seven Strategies for Driving Technological Advances” because any piece of advice that can help spur technology adoption is useful.

Chief Executive had the following pieces of advice:

• Be a student of technology best practices.
• Connect weekly with the CIO.
• Encourage constant learning in the IT Department.
• Communicate and share best practices through technology.
• Think benefits, not features.
• Prepare to invest.
• Establish meaningful metrics for your CIO and yourself.

So how good is this advice for Supply Management? That will be the subject of SIs next post.