How to Overcome the Top 3 Barriers to an Effective Digital Supply Chain

The digital supply chain has been a growing trend for years now, with companies all over the world slowly moving towards full digitalization.

Then Covid happened.

Digitalization suddenly became a priority for everyone. Spreadsheets and clipboards couldn’t compete with the risk mitigation and data insights that cloud-based software and advanced analytics can provide.

Thus, the digital supply chain is front and center on every organization’s agenda.

But now, many are realizing that although shifting to a digital supply chain is worth the investment, there are a number of barriers to overcome.

Digital Supply Chain Barriers

According to The Hackett Group, there are nine major barriers to digital supply chain transformation.

I think these can be grouped into three larger categories to make them easier to address.

 

• People barriers
• Process barriers
• Technology barriers

This way of thinking groups these barriers into the Golden Triangle framework that we’ve talked about at length before. This allows for a more holistic approach to digital transformation that will help you avoid further setbacks.

Addressing People Barriers

This hurdle is all about skills, training and digital adoption.

In The Hackett group’s list of nine key issues, lack of proper training and skills for both IT and supply chain professionals were included.

This comes down to two things, better recruitment of talent and more internal investments. There needs to be a healthy mix of new talent coming in to bring perspective and new skills, along with existing talent being trained and encouraged to develop the necessary skills of data literacy and technical know-how.

Once that has been addressed, it makes tackling digital adoption much easier.

According to the Harvard Business Review, only around 20% of transformation initiatives succeed, and that is due in large part to a lack of digital adoption.

In order to solve this digital adoption issue, the answer lies in transparency and data.

Leadership must be transparent with people, be upfront about the technology, why it was brought in, why it should be used a certain way, and have a two-way dialogue to encourage digital adoption.

From there it’s all about using data to inform action. Where are people using the solution and where aren’t they? Maybe it’s because they need more training, or maybe it’s a process issue that needs to be adjusted. Whatever the case is, you won’t know without using data.

Luckily, there are solutions available tailored to getting exactly that kind of data such as JAGGAER Adopt.

Addressing Process Barriers

This also has two components.

The first being evaluating your current processes and how they fit within your people and technology ecosystem. There is a great explanation of this in our Practical Guide to Autonomous Procurement, but it boils down to the quote “if you add together a new technology and an old process all you really get is a very expensive old process”.

The second piece of this is about change management.

Of course, every organization is different, and so too the approach will be different, but here’s a few principles to keep in mind when dealing with your own internal change management.

 

1. Start at the Top

It’s a tale as old as time. During a companywide meeting, the CEO will make an announcement or speech about changes in the company or changing the culture.

Fast forward six months and nothing has changed. Why? Because it has to start at the top.

Leaders have to set an example first and show people what change looks like. Expecting people to follow blind orders won’t get anyone very far.

2. You Can’t Overcommunicate

Ironically enough I think this speaks for itself.

Communication is key to creating buy-in, digital adoption, and ultimately digital transformation.

3. Remember the Individuals

People are the key, remember that. Do everything with people in mind.

Train them, develop skills, make processes to suit your people‘s needs, and then clearly communicate at all stages.

The digital supply chain can’t work without people.

Addressing Technology Barriers

This touches on digital adoption as well, but much of the technology barriers will be due to a lack of good user experience (UX) and data issues.

Marcelo Loureiro, CPO at Alkermes said “It is important to build the right foundations for the technology to do its magic. Like building a house you need to start with good bones or the rest can’t work”.

Too often companies don’t address their underlying data problems upfront, and that leads to failed digital initiatives and poor adoption.

Instead, make data a priority.

Finding the right technology partner can help you with this by guiding you through the steps it takes to cultivate a system of data that can support the full functionality of a digital supply chain.

It’s clear that the world is going digital, and that means that the digital supply chain will have an ever-evolving – and ever-growing – role in the future of business.

Want to learn more about the role the digital supply chain will play? Learn more in this research report from The Hackett Group!