About the Digital Transformation of Procurement – interview with Joël Aznar
“All the issues associated with digital in terms of sharing, collaboration, innovation, agility, risk management, etc., inevitably echo at the level of Purchasing, like a sounding board for the internal and external transformations that are taking place.”
Patrick Chabannes : What thoughts do the words Digital Procurement Transformation inspire in you?
Joël Aznar : Purchasing Departments must accelerate their digitalisation in order to accompany the digital transformation of their companies. However, I would first like to define these concepts which are sometimes used indiscriminately. There are three levels to consider here: “digiTIsation”, “digiTALIsation” and “digital transformation”.
- Digitisation” or “digitisation” is the action of transferring a message (document, photo, etc.) from an analogue or physical medium to a digital medium.
- DigiTALization” or “dematerialization” is the use of digital technologies applied to an entire process in order to automate its tasks.
- Digital transformation” goes far beyond this. It is about the company’s ability to reinvent its value proposition on the market thanks to digital technologies.
In this sense, Purchasing Departments have considerably improved the digitalisation of their processes over the last 20 years, but it is now a question of completing this cycle, in particular by mastering data in order to actively participate in the digital transformation of their companies.
Patrick Chabannes : In what way would Purchasing Departments be more involved in Digital Transformation than others?
Joël Aznar : In fact, the whole company must be involved and the Support Departments must reconsider their role as a key part of this transformation, just like Human Resources or the Finance Department. However, Purchasing is not a department like any other because it is at the interface between the company and its market. Consequently, all the issues associated with digital in terms of sharing, collaboration, innovation, agility, risk management, etc., inevitably echo at the level of Purchasing, like a sounding board for the internal and external transformations that are taking place here.
At the centre of the relationship between the internal and external worlds, Purchasing Departments have both more challenges to face and perhaps also more opportunities than other Departments.
Patrick Chabannes : You seem to be saying that the digitalisation of processes, a prelude or condition of digital transformation, is incomplete. Could you elaborate on this?
Joël Aznar : Indeed, although the last fifteen years have seen many developments, I don’t think we can yet talk about a revolution… From the point of view of “Source to Pay”, few companies have really squared the circle, i.e. the digitalisation of their processes from end to end, with homogenous and fully integrated solutions.
What can be said about the user experience, whether he is a supplier or an employee, when faced with the multiplicity and diversity of solutions that need to be understood, which inexorably leads to permanent “load breaks” in operational activities. Interoperability generally remains very partial. All categories, direct and indirect, are not systematically dealt with or sometimes incompletely. Of course, it cannot be denied that investments in Procure to Pay have been considerable over the last few years, but in my view the work remains unfinished.
“It will not be a question of digitising obsolete processes but of rethinking our operations at the same time as we rethink the value offered to the market.”
Patrick Chabannes : Why would over-communication by publishers be a problem?
Joël Aznar : The multiplicity of offers captures all the attention of Purchasing Directors who then ask themselves the question of which solution to invest in, focusing mainly on the “What and How”, and generally overlooking the strategic “Why do it?
Beyond the simple digitalisation of the function, Purchasing Directors should above all have a vision, a meaning to give to this digitalisation and its alignment with the company’s digital transformation… Not just an alignment, moreover, but clearly being a driving force of this transformation and an active agent of change, thereby enabling their companies to anticipate future developments.
Patrick Chabannes : What is your vision of the next few years in terms of digital transformation and the role of Purchasing?
Joël Aznar : In 2017, in its Key Issues Studies, the Hackett group pointed out that although 84% of Purchasing Organisations think that digital transformation will be fundamental in the next 3 to 5 years, only 32% had defined a plan. It is now 2021, do you think these figures have fundamentally changed?
The world will change even faster, that’s for sure. Disruptions are becoming commonplace. AI and all its components, IoT, Smart Contracts & Blockchain, digital-enabled, virtual workspaces of agile teams driven by the so-called liquid workforce will disrupt our lives… and the current health crisis will only accelerate and amplify these disruptions.
In contact with the outside world, Purchasing will have to accompany, enable and facilitate these transformations by deciphering the world to come, by identifying both the weak signals and the major trends in order to enable the company to anticipate, adapt and integrate these changes as best it can.
“DIGITAL = DATA + IT…. + PEOPLE.”
Patrick Chabannes : A final word on data, digitalisation and digital transformation?
Joël Aznar : If data, its quality, control, protection and governance are at the heart of digitalisation, the ability to make it speak and to know how to use it is now the key to this digital transformation. Beyond data governance, it is also necessary to invest in skills, to train and hire data scientists, analysts and data engineers and to develop all employees so that they are better prepared for these future changes.
Finally, in conclusion, I would say that the key to digital transformation will not be technology in my opinion. Even though this is my speciality, I would say that it is not the data either… From my point of view, the whole issue of this transformation is essentially based on the Human being who must imperatively be put back at the centre of this equation. The progress brought about by digital automation must be at the service of our customers, of course, but also at the service of our partners, at the service of our suppliers and finally at the service of our employees and the organisation… but above all not at their expense, at the risk of experiencing a “Modern Times” version 4.0 re-make
– Joël Aznar is Global Supply Chain and Data Governance Director, Schneider Electric
– The comments were collected by Patrick Chabannes, Cyrenac Conseil, as part of the Success Barometer