Tag Archives: Adoption

AI, Intelligent Automation

Oh no, now we have Intelligent Automation (IA)

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To add to the already long list of existing and confusing digital technology acronyms; we have Intelligent Automation (IA). IA uses AI but builds on automation technologies such as Robot Process Automation (RPA). The diagram below illustrates the intersection perfectly.

Our previous articles have highlighted that AI is not yet widely adopted by many organizations and remains largely at the proof of concept stage.

A recent report from Hackett Group [2024 Procurement Agenda and Key Issues Study] underscores the progress of digital automation adoption and better illustrates the relative adoption success between RPA and AI. According to Hackett, RPA is adopted, or in the process of adoption, by 51% Procurement functions studied compared to 28% for AI.

RPA is not AI

RPA uses rule based scripting to integrate and perform repetitive tasks. It follows a process defined by the end user, however RPA can utilize AI agents. These AI agents can recognize patterns in data, in particular unstructured data, learning over time.

Value Proposition Expectation

The Hackett study differentiates between solution suites, such as ERP, and point technology solutions. Gen AI, RPA and ChatBots are all point solutions. The low level of large scale deployments of Gen AI (5%), RPA (19%) and Chatbots (6%) suggests a need to join up the ‘points’ and develop more suite solutions for procurement organizations to leverage.

Looking into the crystal ball and beyond the current AI hype, the combination of technologies would suggest that IA, which incorporates sub-disciplines of AI, like ML and Natural Language processing (NPL), is the logical and practical ‘suite solution’ outcome which we predict to be the digital automation toolset that provides real executable value for procurement.

IA could be that sweet spot that realizes the true potential of AI to deliver business value.

IA or AI : What is your success prediction?

AI

Technology fatigue? Changing Procurement’s Perspective

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As we collectively look forward to our summer time break, the opportunity to recharge the batteries and step back is a welcome rest. User fatigue is common challenge in technology evolution; user dissatisfaction, lack of trust in technology, frustration and lost interest reduces the level of user engagement and motivation in technology adoption.

Within Procurement, there are myriad of AI use cases that offer potential but currently lack tangible and demonstrable output.

Risk Aversion

AI is hampered by bad data but the lack of trust in the technology blinds decision makers in endorsing ‘finding a better way’. This vicious cycle creates a detrimental effect, or even the perception of high risk.

Organizations that are risk averse have a higher level of user fatigue (The Institute Risk Management Risk Appetite & Tolerance Guidance Paper, Sept 2011) . The balance between ‘reward’ and ‘risk’ must be explored and purposefully agreed by the business.

Gartner Research Feb 2024, ‘Embed Total Cost of Ownership (TCO) in Procurement Teams to Optimize Value’, recommends TCO principles to improve business performance success. This perspective requires a new set of value measures, triangulating additional datasets housed across various internal and external systems. Procurement organizations must prioritize data integrity to minimize user fatigue. Note: You can have the best AI technology, but if there is no trust or use case benefit, adoption and ROI remains zero.

Data integrity considers not only the accuracy and consistency, but the ways data is interconnected across disparate systems to create ‘single sources of truth’ with high quality data.

Addressing the risk that AI itself impacts the organization’s data quality is another concern. According to McKinsey, “some 71 percent of senior IT leaders believe generative AI technology is introducing new security risk to their data.”

90% see improving compliance and risk as important for driving their data-driven decision intelligence investments ​​​
Source: ProcureTech research

Increasing Complexity Trend

Data, Data everywhere but not a drop to drink

Accordingly to Gartner, increasing supply chain cost and complexity, as well as economic and geopolitical instability, are significantly impacting business margins and supply continuity. Inevitability this means that organizations will require more TCO data points to manage the evolving supply chain scope.

Structuring unstructured data will make it a business asset.

Back to Basics

Seemingly the procurement road to success is not only to change the perspective, but to take advantage of technology, they must revisit their risk and reward balance. Understanding how to deliver improved data integrity within the supply chain will support the journey of winning ‘hearts and minds’.

AI is intended to simulate human intelligence and the ability to acquire and apply knowledge in an application that users trust and adopt will be a critical success factor.

Execution is Everything. AI is coming home. Share your Perspective.

Change Leadership, Operating Model, Strategy

Do you feel the urge (to innovate)?

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The call to innovate has never been stronger given the current market challenges. The dilemma faced by many organizations is that reality is never simple and often there is a significant mindset block in tackling how innovation requires a change in Operating Model.

The fear of failure, loss of influence or power, lack of control and inability to trust in a guaranteed outcome block changes. How do organizations navigate this?

To truly leverage innovation, you need a plan:

“If you fail to plan, you are planning to fail

Benjamin Franklin

Information + No Insight = No Strategy

No strategy? Leaders need to step up to the call to action and develop a plan to utilize innovation. This plan must address people, process and technology. Hoping technology adoption will happen just through training is over simplistic – what does it mean for the user experience? The innovation needs to deliver a well thought out advantage and resolve the WIIFME (What’s In It For Me) ‘balancing act’ across the end-to-end process. Innovation for innovation sake is not a plan. The strategy needs to be clear, insightful and deliver value.

Investment, leadership sponsorship, ‘A’ team formation are of course the usual prerequisites.

Still keen to to innovate? Establish a super user audience to ensure your strategy is smart. Even the best innovation can result in a ‘hot mess’ which will be considered as a ‘great idea, just badly executed’ if there is no clear understanding of the outcome benefits and process to capture value.

Know your audience! Transform the mindset.

This is Cognitive.

Digital Transformation, Project Management

Digital [Invention] Drivers

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‘Necessity is the mother of invention’. Practicality is a driver of necessity. The earliest concept of the modern day monetary system, metal coins, can be traced back to 600 BC, the Lydian Empire. Coins reigned supreme until the 11th century when the Song dynasty invented paper money ….. paper revolutionized the way that people could carry around their wealth without weighing them down! Ease and convenience are powerful USP’s (unique selling points).

Digitization, 1 and 0’s, paperless money is now starting to dominate our daily lives. The proportion of cashless transactions increases every year with over 70% of Asian and European payment transactions now going paperless. Whilst there may be cultural acceptance differences across the countries, the ease and convenience of ‘tapping’ your card or phone is now a digital cultural norm.

Foundational to the digitization enablement is the change in underlying process and platforms needed to support each ‘revolution‘ step. This is complex and often requires a mindset change. Under the digital transformation ‘call to action’, we refer to this as ‘digitalization’, or the ‘digitalization journey’. Digitalization involves the adaption and re-engineering of processes to balance user outcome benefits with business policies and procedures to ensure secure, consistent and robust controls. User adoption is improved by making the process easy and convenient.

What is the next tech wave?

The news is awash with the recent Microsoft investment in ChatGPT. Personally I believe we are still in that hype phase; and have yet to fully realize the benefit potential of using a ‘super charged’ chatbot to make the process easier and more convenient for the user. I articulate the challenges of AI in my last article, “The Age of AI: What’s Procurement’s fate?“.

As we close out 2022 and fast-forward 2023, my ongoing outlook is that we remain constrained by the complexity of the process being addressed and whether the user themselves are able to accept a new operational/ cultural narrative. The art of ‘digitalization’ remains, as ever, critical to success.

Confused by the digital tech talk. Share you perspective.

Sustainability

Eating your own dog food

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Or my preferred “Drinking your own champagne” are terms to describe the practice of using your own products and services. It serves as testimonial evidence that practices what the company preaches, and demonstrates a high level of faith in the quality and value derived.

It seems strange therefore that organizations marketing sustainability credentials, citing net zero aspirations, but have a reputation not to “walk the talk”, expect third parties to sign sustainability pledges without question. This lack of leading by example is a quick way to destroy credibility of the program before the start.

According to Forbes, there are 6 mistakes that organizations make when building a sustainability program:

  1. Setting goals before properly assessing the impact
  2. Failing to identify the right do-ers and deciders
  3. Not effectively measuring progress towards your goals
  4. Using sustainability only for PR
  5. Failure to test strategies before applying them to scale
  6. Not asking for help

This research was conducted over 2 years ago and is still relevant today.

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Change Leadership, Digital Transformation

The importance of Digital Culture

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The relationship between humans and technology continues to advance rapidly. For many us, interacting with Siri or Alexa is now second nature, however assuming that individuals will automatically understand and adopt technology is not a given. These developments are creating another set of challenges (and opportunities) for the organization.

Digital culture describes how technology shapes the way we think, interact, behave and communicate, and as technology revolutionizes, there is invariably an impact corporate culture. Being digital savvy is more than just being paperless, it is about being attuned to the opportunities presented to the organization – all of which need considered management.

For example. remote working technology implementation delivered efficiencies, speeding up work and empowering the workforce. The COVID pandemic accelerated the deployment of these remote working technologies and demonstrated that users could be both productive and effective working from home. Post pandemic, having now grown used to these technology benefits, it is not surprising that a large number of users are resisting the call to the return of a 5 day per week office working. It will be interesting to see how the recent Twitter employee backlash unfolds on the scrapping of the working from home policy.

As these technologies become more embedded, building on the previous theme, hybrid (home and office) working becomes a digital cultural norm, and therefore likely to be a standard employment practice to attract new employees into an organization. Organizations that foster and embrace an environment where users can explore, experiment, develop, and benefit from technology innovation lead to a more motivated workforce.

“Putting People first in Digital Transformation” Survey 2021: 66% are optimistic about the opportunities that technology can bring to their career and work.

Ricoh

Further advancements in cognitive technologies that mimic the human brain: perceiving, judging, thinking and reasoning will continue to challenge the digital culture. There is a whole new profession in the making.

Bottom line: It’s not about the technology, it’s about the way people will use the technology. This should be a key assessment when designing and planning your digital transformation.

To bring home the point, here’s a link to footage of two teenagers completely baffled on how to use a rotary phone. It is easy to forget how rapidly culture evolves!! How are you managing change?

From

Rotary analogue phone

To

Does your digital eXPerience have P for People? Contact Us.

Digital Transformation, Strategy

Addressing low Digital adoption – Top Tips

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If you are still using a manual arrangement for raising and issuing orders, you have fallen behind. For those organizations already out of the starting blocks; experiencing delays in adoption and or experiencing compromised implementations that fail to deliver the value expected, the clock is still ticking…….

Runners lined up on starting blocks

The prevailing assumption is that digitization improves efficiency. Removing paper from the process is good; automating workflow approvals is good; using catalogs to help your organization buy off contract is good; yet for these examples and others, organizations face low adoption. Why is this?

The gap between vision and execution. They say ‘bad workmen blame their tools’ and unfortunately if the solution is not delivering against expectations, the technology is blamed. The gap between the vision and execution is a failing that challenges many projects.

One shoe size does not fit all – however the end-to-end process steps to assemble shoes is the same. Organizations unable to segment different use cases and apply appropriate and relevant processes within the platform will face user resistance. These failings will have users complaining that the new solution and process is more complex and less efficient than the previous manual arrangement. It is no surprise then adoption remains low!

Critical to success is the ability to assess, match and configure a process to a process flow sustained effectively within the applicable technology platform. Configuration does not mean customization. The art of digitalization is delivering a more effective outcome for the user and business by balancing and re-engineering processes to leverage standard platform functionality configured to meet your business needs. There is more than one right answer, but typically one answer makes the most sense.

This art requires an agile mindset – particularly, where there is a need to integrate across different technology platforms. There may be trade offs when considering functionality overlaps – which platform remains the source of truth and core to the process – this requires a solid understanding of the end-to-end process and how similar use cases can be consolidated and optimized. The goal is ensure a seamless flow from A to B, to C, to D that is both efficient and effective.

Top Tips

  • Understand the landscape holistically to define the strategy
  • Understand the technology suite
  • Engage users early on to understand use cases (capture the As-Is baseline and pain points)
  • Align the best talent and user champions to design the new To-Be processes
  • Challenge current comfort zones to avoid repeating the existing process
  • Keep userability front of mind – keep it simple and intuitive
  • Lead, communicate and train extensively

The digital journey is not an easy one. Value the transaction and act accordingly.

Are you in Digital Hell or Heaven? Bridge the gap between Vision and Execution. Contact Us.

Change Leadership, Digital Transformation, Operating Model, Project Management

The Danger of back office Digital Transformation without Balance

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With all new technologies, there is a danger that they get misapplied. misused and abused. Given the drive to digitalize the back office and deliver ROI, there can be a lack of consideration and practical understanding on how policies, people and processes are optimized.

Finance and Procurement functions measure spend managed by the team, encouraged by compliance and governance committees, to steer towards a ‘one size fits all’ approach in how the technology platform is configured. This usually leads to an overstretch of available resources, creation of process bottlenecks and a failure by finance and procurement to service the business adequately. The result is seen as an over promise and under deliver, and the technology is blamed.

This is not a technology problem, rather reflects the challenge of how the technology was implemented. Organizations must spend time to get into the detail on how the stakeholders buy; seeking to differentiate and simplify the different sourcing channels that can become configured correctly in the technology platform, and supplemented as appropriate, with complementary solutions. The output defines the new target operating model, matched with organization’s capability, to deliver value add across the end-to-end process without hampering one function over the other.

Together with investment in change management and all that it entails, digital transformation becomes a journey that starts with this first purposeful step.

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