Partner Perspectives is our ongoing series of conversations with business leaders from Tradeshift’s strategic partners around the world. They’ll provide you with unique insights into the latest trends in business and offer tips and advice on how to become more efficient, agile, and successful.
In the latest edition of the series, I sat down with Jerome Grignon, Director in Deloitte’s Transactional Finance advisory practice, and Thomas Hiller, a Senior Manager in Deloitte’s Sourcing & Procurement advisory practice to discuss the latest trends in digital transformation across procure-to-pay.
They outline why organizations are placing a greater emphasis on user experience and what the difference is between successful and unsuccessful teams.
Most companies have a procure-to-pay transformation project underway. What are the most common objectives of these projects?
Thomas: Cost savings are always a major driver of procurement projects. A lot of the companies I’m working with are spending their time looking to better manage their indirect spend. They’re focusing on harnessing new procurement tools and systems to transform the purchasing experience for users, allowing procurement to gain greater control and drive down the costs of the company’s long tail spend.
Digital transformation in procurement isn’t all about cost savings, however. Some leading functions are thinking bigger. They’re looking at using the work they’re doing as a catalyst for broader change. And, as a result, they’re working closely with peers in finance to think holistically and transform and drive automation through the whole procure-to-pay process.
Jerome: I couldn’t agree more. Cost savings and automation are also key objectives for digital transformation projects on the transactional finance side of the procure-to-pay process. However, I’d add that those leading companies have the future of their company top of mind. They understand the world is becoming increasingly turbulent and are using new technologies and ways of thinking to make their business more real-time. By doing so they can be more agile in how they operate, allowing them to overcome challenges sooner and take advantage of opportunities when they arise.
What are companies focusing on to achieve these objectives?
Jerome: The big focus is on user-experience. The finance organizations I work with understand that user adoption of the new technology they’re putting in place is key. If people don’t use the solutions, they won’t be successful. And this extends beyond their own ecosystem. Supplier adoption of an e-invoicing solution is just as critical to the success of their digital transformation efforts. So they’re also looking to adopt tools that make it as simple as possible for their suppliers to do business with them.
Thomas: If you don’t give users a solution that makes their life easier they will find another to get what they need. That’s when processes breakdown, costs increase, and procurement gets put in the spotlight. So procurement teams are looking to adopt systems that give purchasers a similar experience as they get when buying off e-commerce stores at home.
Are companies having success with their digital transformation projects and meeting their objectives?
Thomas: Some organizations are having more success than others. The ones that are struggling are those that treat digital transformation as a pure technology play. They replace a legacy system with a new system and say they’re done. While they may get some success from this approach it doesn’t allow them to maximize the full capabilities of their new solution. Nor does it solve the bigger issues around their processes and ways of working.
Those companies having more success are those using technology change as the springboard for broader strategic change. They’re rethinking their processes, they’re looking at how their work impacts other departments and the value they can add beyond their own KPIs, and some are even, reimagining the very role of the procurement function.
Jerome: It’s the same on the transactional finance side. The most successful companies are looking at digital transformation more broadly and thinking about their processes.
What are the biggest challenges companies face?
Jerome: Data quality is a big issue keeping teams from achieving their objectives. And it’s not just about getting their data in order internally, it’s about working with their suppliers so they share data in a consistent format at all times. If they’re unable to do this, then automation often fails, forcing teams to revert to manual processes.
The other challenge I see is that companies struggle to work towards a unified vision. This is especially challenging when projects rumble on for a few years. So leaders within organizations need to ensure that they’re constantly communicating what the outcomes of the project will be and how they’ll help everyone in the company be successful.
What’s next when it comes to digital transformation in transaction finance and procurement?
Thomas: In procurement, it’s sourcing automation. It’s a big effort for procurement teams to recreate sourcing events again and again. So they’re starting to look towards technology to automate this process.
Jerome: Accounts payable automation has rumbled on for a few years now and this will continue as companies strive to get more and more of their suppliers onboard. But the next big focus area will be around data. I’m seeing more teams looking to get maximum control over the data they have flowing in and out of the company. And they’re wanting to extract as much insightful information from this data to add maximum value to the organization.
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