Monthly Top 5 - May 2023

Dear readers,

This month’s issue is all about reminding you of the moral one of our favorite childhood fables, Aesop’s The Tortoise and the Hare… That, and giving you the stats and sources needed to drive the Digital Transformation narrative in your organizations.

Case in point:

First, some sobering stats were presented at the 2023 Gartner Supply Chain Symposium this month:

• Only 25% of supply chain workforce qualify themselves as highly engaged1

• Turnover is 33% higher than pre-pandemic2

• Only 16% of supply chain workforce is prepared to go ‘above and beyond’ for their jobs3

Conclusion #1: Your employees are currently more fatigued than at any point in recent history.

Second, Digital Transformation project “fail rates” continue to range from 70% to 95%4. This has been the case for 2 decades now…

Conclusion #2: Organizations continue to overestimate their organization’s capacity to adopt change. I think we can safely say this a rule of business at this point…

Third, Procurement’s Digital Transformation continues to be priority #4 on the CPO agenda after ‘ensuring supply continuity’ (#1), ‘combatting inflationary pressures’ (#2) and ‘reducing spend cost’ (#3)5.

Conclusion #3: Organizations are in dire need of modern, digital Procurement and Supply Chain tools.

So what are we to do? We have organizations that desperately need change but that don’t have the ability or resources needed to adopt it fast enough…

Let’s turn to other domains to find the answer:

1. When André De Shields won a Grammy for best musical theater album in 2020, he said this in his acceptance speech:

2. One of the U.S. Navy Seal mottos is:

3. And, the moral of our favorite childhood fable?

To win the Digital Transformation “race”, our Procurement organizations need to slow down. They need to prioritize and focus on digitalizing one process at a time while tying everything to an overarching vision. This is only possible if everything which is not the top priority is ignored until it is completed successfully.

The organizations that act as systematically as the tortoise did will wake up in a decade “digitally transformed”. The others, the hares, will have completed 20% of what they set out to accomplish. The articles I collected this month further support this conclusion.

As always, I hope you enjoy the reading as much as I enjoy the writing.

Best, 

Joël

P.S. I personally would have titled the fable “The tortoise and the chicken with its head cut off” but I don’t think that title would have sold as well…

P.P.S. I was once again included in the Thinkers360 2023 Top 50 Global Procurement Thought Leaders list this year. This is only possible with your support. Thanks so much for reading and interacting with the ideas I launch into the world.

Top 5 Source-to-Pay Articles - May 2023

#1 - Employees Are Losing Their Patience for Digital Transformation

As pressures keep mounting on businesses to optimize costs with change initiatives, employees are losing the steam to deliver them.

Proposed solutions?

1. Build rest periods into your capacity planning exercises.

2. “Open source” your change plans with employees.

3. Train managers to act as “resilience builders” instead of “change champions”

Details in the article.

Employees Are Losing Patience with Change Initiativesby HBR

#2 - Your Management Practices are Killing Productivity

In a context where an important proportion of employees are reporting being on the verge of burnout, supporting your folks so they can be their best selves at work is crucial.

The following article is branded for IT, but reading it you’ll see it’s applicable to all managers. Read and ask yourself: “Am I managing using any of these bad practices?”

5 IT Management Practices Certain to Kill IT Productivityby Bob Lewis at CIO

#3 - The Limitations of Generative AI

Generative AI technology such as ChatGPT is an important part of the puzzle in our Procurement organizations’ digital transformations. However, it is not a silver bullet and has many limitations.

This is probably the most useful article on Generative AI I’ve come across that explains these limitations. It will give you a conceptual framework that you can use to evaluate potential use cases for this technology. Said more crudely, it will help cultivate your “BS detector” as people try to sell you AI functionality…

What Kind of Mind Does ChatGPT Have?by Cal Newport at The New Yorker

#4 - The Current State of B2B Purchasing is Not Pretty

This is a great white paper by Zip.

Supported by a survey of 1 056 U.S. based finance and accounting professionals (director-level and above from a wide array of industries and company sizes), they’ve put together a compelling picture of the current state of B2B purchasing.

The most shocking stats:

• 79.4% of respondents say their company faces challenges when purchasing B2B software and services, and nearly one-third (32.1%) say their B2B purchasing process is broken.

• More than one-third (34%) of respondents reported their employees are largely unaware of [how to initiate the correct P2P] process.

There are also some great graphs on technologies organizations are using to solve for operational excellence.

The challenges you face are not unique. This white paper confirms that and offers some relevant ways forward.

2023 Trends in B2B Purchasingby Zip

#5 - The Forces Reshaping Procurement

This BCG report focuses on the macroeconomic trends reshaping Procurement. While less relevant to your day-to-day, a few of the charts make it crystal clear why certain topics, such as Environmental, Social and Governance (ESG), are trending.

For example, as natural disasters occur more frequently and are associated to increasing costs, investors are asking their companies to have robust ESG risk mitigation strategies in place. They want their investments protected.

This is putting pressure on Procurement to operationalize the follow-on requests through the supply chain. A similar dynamic in other areas (e.g. cybersecurity, innovation, sustainability, etc.) keeps increasing the breadth and depth of knowledge and skill needed to be a leading Procurement organization. All the while, the ‘talent gap’ is increasing.

Seven Forces Reshaping Procurementby BCG