This blog summarizes Sievo & Schindler keynote session on elevating dirty data to concrete change. The keynote discusses procurement’s role in acquiring and processing upstream data, and uncovers examples of using data to monitor success of initiatives in global procurement organization. See the whole session online at Digital Procurement World on 16th of September 2021 and participate in discussion!
Data is the new oil
According to the Economist (2017), the single most valuable resource is data. This is great news for procurement, that closely collaborates with upstream data ecosystem of partners and suppliers.
Where is all this data coming from? We see three phases of innovation. In the 70s, ERP systems commoditized forming the core of enterprise processes and transactions. In the 90s, sourcing suites emerged to support strategic procurement needs. ERPs complemented sourcing suites and they existed in harmony. In the 10s, a big group of companies emerged to fill in specific domains and to make sense out of all the existing data at hand. This new generation of solutions complement existing ERPs and sourcing software with additional functionalities. Picture below illustrates the explosion of operational data from ERP suites to S2P suites to ecosystems of best-of-breed solutions.
New breed of solutions is different from the past in 4 ways:
Leading procurement organizations have come to realize they will need to pick and mix a handful of solutions that meet their specific needs. It’s hard to achieve an optimal setup with one solution only. This dilemma of choice creates a new set of challenges. One being the requirements in terms of data quality. Dirty data is an asset, not a problem.
How we at Sievo see this pick and mix dilemma is, that procurement organization will be working with ERPs, sourcing and contracting solutions as well as with domain specific data providers. Domain specific data providers include providers that specialize in risk, financial or sustainability data, for instance. To make most out of this ecosystem of solutions and data, procurement needs an analytics layer in the middle to match different data sets together and harness opportunities in supplier and category data. Organizations need procurement data hub to integrate different data sets with each other and in the wider IT architecture. After data is collected, cleansed, combined and enriched, it could be fed back to the data lake for further repurposing. Remember, procurement is not an island! 🏝️
Procurement analytics providers, like Sievo, provide an opportunity to facilitate change for a data driven culture and leadership – benefitting the organization as a whole beyond procurement use cases and requirements. We think procurement is sitting on top of a gold mine of data and that is why Sievo thrives to turn even the crappiest data into better decisions and actionable insights.
Next, we will share a customer success story in how to turn data into measurable improvement in procurement performance.
Case Schindler
Schindler has partnered with Sievo for a number of years. Sievo is a part of their wider procurement ecosystem of tools and data, collecting procurement and spend data, combining it with company internal and external data sets, enabling tracking and improving procurement performance on every step of the S2P process.
All great things start from an idea. In software landscape, ideas are tested in a form of a smaller scale pilot project or in specific testing environments. After the pilot, the reality may hit you if the results are not aligned with the initial expectations or desired objectives. Schindler had a one specific puzzle they needed to solve that followed this growth curve.
Procurement system implementations can be painful. They tend to take time and resources. Everyone has their set of expectations you need to be able to manage – otherwise you will face disappointed stakeholders. You need to be really clear on what problems the solution is likely to fix and what will change after the implementation (especially if the change touch bases people and processes – as in 100% of the cases it does). There is no such thing as over communication when it comes to procurement solution implementation.
Schindler had a source-to-pay (S2P) system implementation that went well, but their user adoption was falling behind the projected targets after the system was up and running. User adoption can make or break the business case if expected solution benefits cannot be harnessed to their full extent. In case Schindler, this suboptimal adoption resulted that not enough of spend was flowing through the S2P system. Low spend coverage itself can lead to several problems, such as missing the big picture, maverick buying, not capturing the full sourcing potential, procurement value left on the table, as well as unengaged users and general process noncompliance.
To turn that frown upside down, Sievo and Schindler decided to make the challenge measurable and visible, and monitor a set of KPIs (besides some others):
Making the challenge visible and measurable through reliable data was the key for improving the situation. Without reliable data you are blindfolded. Without data you don’t know how to target your actions and prioritize improvement efforts. Sievo enabled measuring performance and following up improvement month after month. Example of one Schindler business unit is showcased below.
When you are able to track performance and visualize improvement, you are able to deliver change. Making the progress visible is not only motivating for the implementation team but also empowers the users in making change and focusing their efforts where they are most welcomed.
Conclusion
Importance of partnerships in making your digital transformation a reality cannot be emphasized enough. With an open dialogue on the possible challenges, you allow your partners to put their competence in use. Communicating areas where you need help, enables your partner make us of the learnings from the industry and wider customer base. Most likely you are not the first one (nor the last one) trying to get you head around the issue.
Sievo & Schindler keynote session at Digital Procurement World
Header picture by: Akshay Nanavati (unsplash.com)