Digital Supplier Management Transformation

Top Five Ways to Improve Your Digital Supplier Management Transformation

In his book Emotional Intelligence, Daniel Goleman describes a store that crams clothes from 15 top designers into just 450 square feet. The tiny shop earns four times more per square foot than other similar retailers – most of it in the four winter months of the tourist season. The key to this success lies in the shop owner’s philosophy of customer service: “I have to know my customers to help them – how they like to dress, what they like to do, what part of their body they are dissatisfied with. Usually salespeople don’t care if an item looks good or not on the purchaser, they just want to make the sale, so they tell you whatever you have picked is perfect. If I don’t like how something looks on a customer, I tell her so and why. I don’t want to sell her something that’s not right for her. I act as an advisor to my customers.”

This is how a digital supplier management transformation should happen – by trying to truly address business requirements and value. Implementing a digital supplier management strategy should not be solely dependent on what customers like to see. The digital transformation manager must act as an advisor to help stakeholders understand how digital technology can be put to its highest use to produce desired business outcomes when it comes to managing suppliers.

Let’s look at the top five factors that play a vital role in successful digital supplier management technology implementations:

  1. Prepare the organization for change. Digital implementers must clearly understand the future-state vision, the reason for the transformation and how the change will occur. Communicating why the change is necessary, what the future-stake will look like, and how it will be achieved is at the core of effective change management. This decreases potential insecurities and anxieties employees are likely to experience. Assuage them by providing internal and external stakeholders with the information about how their roles will change from transactional work to more strategic and higher-value work. Conduct sessions to demonstrate how digital technology will eliminate mundane, repetitive tasks and support analytics and decision-making. Communicate deliberately, so employees can absorb the details without getting overwhelmed.
  2. Do not look for a one-size-fits-all solution. Each enterprise environment is unique – with unique needs and challenges. Most digital supplier management technologies are pre-configured based on industry best practices, which should be adopted on a per-case basis to fit the specific environment. If an enterprise implements technology out of the box without any customizations, it will most likely fail to satisfy the need – and most enterprises will quit using it. Implementers must understand the process “as is” and customize the process without creating major disruption to fundamental practices. If a digital transformation manager tries to force an abrupt change in a process that an enterprise has been following for several years, it is likely to fail.
  3. Impart training by roles. Conduct training sessions so each stakeholder has a good grasp of the digital supplier management technology. Break training blocks into smaller sessions to make it easier for people to digest the information. Include practice sessions and assessments at the end of the training sessions.
  4. Avoid the hit-and-run method. Offer ways for the enterprise buyer, implementer and supplier to collaborate to define, refine, develop, test and implement project goals. Implementers should not sell the solution and then disappear when the users need support.
  5. Provide post go-live support. After an enterprise has implemented digital supplier management technology, it is likely to need ongoing and consistent support. Implementers must keep reviewing the processes, requirements and keep challenging themselves to ensure the team is taking full advantage of the tool.

ISG helps companies manage multiple suppliers with the use of a specially-made digital supplier management technology. Contact me to discuss how ISG GovernX™ and ISG Digital Supplier Management services can help you get the most out of your supplier relationships.

About the author

Anu Nelson brings over 18 years of experience in outsourcing governance process implementation, service operations and process improvement and project management. She has significant experience designing governance processes based on best practices, including building financial and chargeback models and conducting process training internationally. Anu is responsible for implementing governance services processes for ISG clients. She has extensive experience in the implementation of governance services tools like ISG GovernX, Sirion and Enlighta.