3 Basics to Successfully Transform the Supply Chain with a Cloud Deployment

The cloud and Software-as-a-Service (SaaS) are making inroads with large enterprises because they promise better, faster, lower total cost of ownership ways to apply information technology to procurement and supply chain problems that have never been adequately addressed. As these deployments grow in size, complexity and strategic importance, the risk of failure increases as well. People are wondering, will these new solutions fail as often and spectacularly as the on-premise solutions of past decades?

These concerns are well founded. Technology has improved, and we have a new chance to get it right. But what hasn't changed are people, and we still need people to bring the technology to life. Even with better technology, the same issues that caused past failures could happen again. How can we ensure that these shiny new cloud deployments don't go the way of the old ones? In short: Define, align, and simplify.

1. Define success metrics

What we've learned from previous failed deployments is that no clear, measurable success criteria were set for the project. Completion of an implementation is not a measure of success in itself. Improved procure to pay (P2P) processes and reduced deployment costs are nice but that's too vague.

Organizations should drive toward specific, measurable results such as reducing the cost to process an invoice by fifty percent, or speeding requisition to purchase order (PO) time to three days from 30, or saving $25 million in a specific direct spending category in a year.

Specific criteria such as these serve as the guiding principles for what you want to achieve. They help keep everyone on track during implementation and increase the likelihood that the new system will actually take. 

2. Align and focus

Once you've defined the success criteria, get all the constituents aligned around them. The company buying the software, the software vendor and the consultants who are doing the implementation each have their own priorities, but all three must come together around this shared vision of what success looks like. Find a way to align everyone's interests with the agreed upon success criteria, and maybe even assign financial incentives to reaching them.

Keep everyone's eyes on the prize throughout the project. Begin each project meeting with a reminder of what will be a successful outcome for everyone. On our projects, we've often gone as far as having the success criteria printed on the project collateral, and on the project teams' mouse pads and desktop backgrounds.

Maintaining that kind of maniacal focus on the desired outcomes helps overcome showstoppers – the ringing of alarm bells that threaten to bring the project to a halt when challenges present themselves. 

For example, I once worked on a global deployment of a procurement system targeted to save $50 million on indirect spend. Halfway through, someone sounded an alarm because Italian-language support wasn't included. There were only a handful of users in Italy, and they all spoke English. The lack of support for Italian was an inconvenience, but wouldn't have interfered with the goal of saving $50 million. The right answer was to continue the rollout to everyone else and circle back with support for Italian if needed.

3. Simplify your business processes

With past on-premise enterprise deployments, we customized everything so as to try to achieve a 100% feature-function line item match with the RFP. By doing that, we were coding existing business processes directly into the software, and adding a lot of complexity in the process. The difficulty and expense of changing those customizations made these systems rigid and unsuited for modern, dynamic ways of doing business. Don't bring the old customization mindset into the new SaaS paradigm. Don't be terminally unique.

SaaS is all about encoding crowdsourced best practices from all the companies using the platform into the software. The code is not customizable for individual customers. However, the solution is highly configurable by end users and administrators, giving them flexibility, control and the ability to respond quickly to changing business conditions. There's a lot you can do. 

But how much should you do? The danger is that SaaS solutions are configurable to point where you can recreate the complexity of old and get yourself into a lot of trouble. Instead of looking to meet 100% of everyone's feature requests, look at what really matters for the business. Stay focused on your success criteria, and why you subscribed to the solution in the first place—to make things easier.

A long–term commitment

Although SaaS solutions are faster and easier to integrate, an enterprise-wide deployment still represents a real investment in time, money, and change management. It doesn't require a capital expenditure, and it's cloud so there's the ability to cancel the subscription if it doesn't work out, but with large scale deployments that's not a comforting thought—or a realistic option.

Cloud solutions offer a once in a career opportunity to streamline P2P and supply chain processes and generate huge business value, yet there remains a healthy trepidation that this new technology is unproven at scale and you might lose your job if the implementation fails. This time around, it's often not the technology you need to worry about so much as the people. Establish clear and measureable success criteria. Get everyone aligned to them, and capitalize on the strengths of this new technology instead of trying to fit it into an outdated paradigm, and you'll be positioned for a big win.

1 comment on “3 Basics to Successfully Transform the Supply Chain with a Cloud Deployment

    January 12, 2016

    Three magical words:

    Define, Align, Simplify

    Not so difficult and the rewards are remarkable!

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