Why aren’t more enterprises adopting digital transformation?

Simple technology. Just like a “working vacation” or a “genuine imitation,” this can often seem like an empty oxymoron — especially for groups (looking at you, IT) who, time and time again, have experienced the empty promises of so-called solutions that do exactly the opposite of solving their problems.   

However, a growing number of high-performing enterprises are capitalizing on just that: simple technology that actually provide solutions to real business challenges. All of these solutions are unique, but they all share a few traits in common, namely quick and easy adoption and seamless collaborative capabilities. 

For too long – perhaps because there was simply no better option, or that departments have become comfortable with band-aid status quo solutions – sourcing and procurement has been left behind in the enterprise’s digital transformation. This is problematic; simple technology can have a transformative effect on sourcing and procurement, and have positive rippling effects across the enterprise. In fact, a recent research report by Harvard Business Review Analytics Services (HBR) in partnership with Scout RFP states that “technology is helping extend the sourcing function’s reach and influence by placing powerful sourcing tools directly in the hands of the enterprise, while at the same time facilitating the sourcing function’s participation, support, and oversight.” 

The use of simple and strategic sourcing technology has the potential to drive 400 percent ROI, as well as improve cashflow and working capital efficiency, according to HBR. With this monumental business impact on performance, why aren’t all enterprises adopting digital automation across their sourcing and procurement organizations at a quicker rate? Largely, because a widespread lack of flexibility is holding enterprises back from this transformative digital evolution, including: 

1. Inability to experiment quickly    

According to HBR research, the inability to experiment quickly is a top barrier to enterprise digital transformation. In fact, 53 percent of businesses cited it as a roadblock to technology adoption. One factor impacting this lag in experimentation is that most large enterprises are bound by tiered approval and implementation processes, which make it difficult for them to test and ultimately select new technology solutions. These processes can vastly increase the time it takes to select a new solution, which in turn decreases the amount of experimentation that the organization can do with new technology solutions — ultimately creating barriers to implementing useful technologies that can be a critical contributor to improved business performance. 

2. Legacy systems  

Legacy solutions and disparate tools like Excel and email are major barriers to digital transformation. Although they aren’t perfect, they do perform, and organizations are hesitant to turn away from what’s already been “working” for years and upgrade to more efficient process. In fact, 52 percent of organizations rate legacy systems as their second most substantial barrier to digital transformation, according to HBR. But, are these systems really working?

The simple answer is no. Settling for status quo solutions ultimately hinders teams from working to their full potential and can create problems down the road. As Uber’s Head of Global Strategic Sourcing Neil Aronson stated in the HBR report, “It’s impossible to drive effective global collaboration using a standard spreadsheet. Having a sourcing solution in place is critical, because there’s always attrition. If you’re only using email to manage sourcing events, you’ll lose a lot of history when someone leaves—but having that history and visibility in a single, searchable repository can drive substantial long-term value.”  

3. Silos that isolate and inhibit the enterprise  

Silos – created largely by legacy software – have broken the business up. In the 90s and even early 2000s, when consultants were building databases for the era’s then-cutting edge technology, information was clustered into, well, silos. Although technology moved eons forward in the intervening years, the silos remained and, as a result, many teams reverted to spot tools like email and Excel to help them communicate and collaborate. According to HBR, this barrier is the third largest deterrent to digital transformation within enterprises. 

Enterprises looking to break down these silos should begin with simple technology solutions. That’s what Levi Strauss & Co. did — and Dean Edwards, its VP of Global Strategic Sourcing, explains how it has helped the organization as a whole: “We get to see an awful lot across the organization, and can help make connections throughout the various parts of the enterprise. If we see one function undertaking a project, and a close parallel somewhere else in the company, we’re able to connect those dots, so that those stakeholders have visibility into what’s going on.” 

Simple technology doesn’t have to be an oxymoron — it can be an invaluable asset to the enterprise’s bottom line success. The first step to embracing solutions is recognizing the top barriers to digital transformation, identifying whether they’re a barrier within your enterprise, and then methodically addressing them. 

As VSP Global’s Greg Tennyson points out in the report, “Sourcing interactions are enabled through easily accessible technology. When technology provides an easy-to-use collaborative environment that provides suppliers with transparent access to projects, and the process is easy to follow, it signals to them that you value their time and that you will maintain a relationship based on mutual trust. Automation allows all parties to get things done as quickly as possible without a lot of fanfare or oversight.” 

Implementing easy-to-use, collaborative technology can have huge implications for both your internal team and the customers and partners you work with. I could go on and on, but HBR sums it up perfectly in their research paper: “Leading-edge technology platforms can bring together previously siloed personnel and processes, remove resource-intensive and error-prone manual interventions, provide end-to-end visibility into sourcing projects and performance, facilitate an enterprise-wide sourcing methodology, and allow both internal and external stakeholders to work together effectively in real time. This can provide the foundation for a radical rethinking of procurement and a sourcing transformation—which, in turn, are vital objectives for any enterprise striving for strategy-driven results.” 

So, what are you waiting for? Get out there and break down some barriers. Your team, your enterprise, and its bottom line will thank you. 

Chris Crane, Co-Founder & VP of Product at Scout RFP 

Image Credit: Wichy / Shutterstock