Leveraging Data in a Digital Transformation: Lessons from JAGGAER’s Fireside Chat
Digital procurement platforms are capable of producing incredible amounts of data, from spend history to supplier scores, delivery rates and more. But such massive amounts of data can easily lead to a new generation of questions. What do all these numbers really mean? How can I put them to good use? Which data can I trust?
At REV2019, JAGGAER hosted a fireside chat panel discussion with several procurement professionals to discuss these exact dilemmas and gather expert opinions. We’re highlighting some of the most important points raised in our conversations to give you the insight to make the most of your digital transformation data.
How much data is too much?
The sheer volume of data generated by a digital procurement solution can be overwhelming, even for seasoned professionals at some of the world’s top companies. So what data do you start with? Christopher Uher, Director, US/MX Operations at PwC, posed that exact question. “We have so many systems in place. It’s just a big ball of data – where do you start?” The analysis paralysis that comes with such volumes of information threatens to counteract any actual gains from increased visibility. “When is too much data hurting rather than helping you?” he asks.
“When is too much data hurting rather than helping you?” – Christopher Uher, PwC
The simpler data, like spend on contract, contract compliance, or late delivery rates can often be a good starting point. In many cases this information is easy to understand without heavy data cleansing and can still provide clear benchmarks and intuitive action items. Once you have a handle on your most basic data categories you can graduate to more advanced areas of your business. There’s no harm in having excess data, so long as you don’t let it distract you from your priorities. Digital transformation is a process, and there’s nothing saying you have to take advantage of every piece of information on day one.
Make it a full-time gig.
TJ Nguyen, Senior Director, Procurement Center of Excellence at Coca-Cola Bottlers’ Sales and Services, understands the importance of diving fully into the transformation process. “Transformation can’t be a part-time job,” he explains. Instead, it’s crucial to dedicate at least one team member to the cause, including data management. “Just because you give someone the data doesn’t mean they can use it,” Nguyen explains, emphasizing the need for a data specialist to parse the numbers and provide genuine insights, rather than raw information, to other team leads.
Another key element of a digital transformation is the human factor – change management. Without appropriate structure and dedication to easing the transition, low adoption will plague the system and negate any potential gains. “Any change needs full-time dedication to create the change and help others along,” he explains. “That’s why we established a center of excellence.”
Procurement Centers of Excellence have been a growing movement in the industry in recent years, with Spend Matters stating that “nearly all progressive organizations have some sort of Procurement Center of Excellence.” By centralizing the procurement function, including the transition to a fully digital, data-driven system, the procurement team can ease much of the burden that would otherwise be felt by distributed employees. An easier path to adoption leads to more accurate, and in turn more useful, data in the future.
Data: What is it good for?
Even once a full-time transition team is in place and a center of excellence has been established, questions remain about what to actually do with the data and where to best put it to use. As Nguyen puts it, “The key thing is, how do you use the data to justify continued investment?” Different teams have different needs, so there is no one size fits all answer, but there are some high-level benefits that nearly all organizations can put to use. The ultimate goal for most is to move from reactive procurement to proactive.
“How do you use the data to justify continued investment?” – TJ Nguyen, CCBSS
“We use data to talk about our next steps,” Nguyen explains. “It’s in our category management strategies, how we engage with our customers, how we engage with our suppliers.” Using data points to initiate conversations with suppliers and customers can not only build confidence that you’re moving in the right direction, but it can also help prioritize action items and clarify disagreements. Commenting on how key information can be used to settle disputes, Nguyen quotes the long-time adage, “In god we trust. Everyone else bring data.”
For others, having accurate numbers means being able to look at spend more specifically by business unit or on an aggregate level. Carmen Gonzalez, who has decades of experience in the supply chain space and now manages procurement in the higher education field, spoke about how a digital transformation allowed her to more accurately see spend across her university, between the undergraduate college, graduate schools, and the university hospital. For other businesses, this might mean contrasting spend between manufacturing sites, office locations, or business units.
Furthermore, Gonzalez emphasized the importance of communicating with your customers to build support for a digital transformation project. By providing previews of what kinds of data are available, you can easily gather feedback from users to see what they think will be useful to them. From there, procurement teams can work with that feedback to implement a data sharing solution that makes sense. This kind of engagement with customers builds excitement for the digitalization process and makes users feel connected with and listened to, increasing adoption further down the line.
Deirdre Taub, Director of Procurement at SiriusXM, cautions procurement teams to remain realistic about the timeline for gathering and leveraging data during the transformation process. She warns against upper management thinking, “We put the system in so now we can be strategic!” Instead, she says, “It’s a journey. It’s going to take us potentially a year, and then maybe we can start getting into the strategic elements.” Take it one step at a time, she advises, and don’t look at the mountain of data as overwhelming. “It’s challenging, but exciting.”