“what lies ahead for the gpo”
TRANSCRIPT
The Shifting Sands of Transformation, Process & Automation
“What Lies Ahead for the GPO”
Dan French - Founder & CEO, Consider Solutions
27th September 2018
Global Process Owner Summit - London
This Session
Introduction
The Drivers for Digital Transformation
The critical need for end to end process thinking
Why simplification is no longer just ‘nice to have’
The role of the next generation Global Process Owner
Exploiting the Intelligent Automation opportunity –Learning from Success and Failure
Navigating the Waters to Success as a Digital GPO
Q&A
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Digital Transformation – What’s Going On?
Disruption - Fundamental Structural Changes
‐ Society, Markets, Customers, Suppliers, Partners, Stakeholders, Investors, Employees
Catalysts
‐ Technology, Mobility & Volume, Transparency of Data
‐ The Consumer ‘Awakening’, Convenience & Intimacy
Stakeholder Mandated Imperatives
‐ LESS cost, cycle times, negative consequences
‐ MORE value, speed, impact, agility, resilience, transparency
Growing scrutiny of the “How” as well as the “What”
‐ It’s now a team game – Supply Chain partners matter
‐ Balanced “Principled Performance”
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But Our Heritage is Efficiency in Silos:Rationalisation & Centralisation
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“The typical organization loses the equivalent of 5% of its revenues to fraud & waste each year”
Source: Global Economic Crime Survey; PwC
“Just-in-Time” has reached a whole New Level
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Acquire Service Provider
Acquire Customer
ProposeService
Commit Service Provider
Commit & ChargeCustomer
Pay ServiceProvider
Locate Customer
Select Service Provider
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The Role of “Digital”Connection, Location, Knowledge, “Commit”, Funds
The Critical need for end to end process thinking
Executive Priorities & Alignment
Target Outcomes - Efficiency vs Effectiveness
Differing KPI focus
Silos and individual governance “lighthouses”
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When the Consumer is King . . .
Convenience is key
Speed is of the essence
Quality at all costs
100% credit is cost of poor service
New KPIs emerge
‐ Time from customer selection to “ready to fulfill”
‐ Often before “commitment”
“Simple, Standard and Seamless” are key design criteria for business processes
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The role of the next generation Global Process Owner
It’s not just about the “customer” but the “consumer”
Look beyond silos – efficiency and effectiveness beyond
Own the outcomes – assume responsibility, accountability and authority
Dive into Data – fuel the processes, analyse the nuances
Embrace Automation – explore, learn, strategize and exploit new ways of adding value
Focus on Talent – what is the future and what skills do we need to acquire, develop and retain
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This Session
Introduction
The Drivers for Digital Transformation
The critical need for end to end process thinking
Why simplification is no longer just ‘nice to have’
The role of the next generation Global Process Owner
Exploiting the Intelligent Automation opportunity –Learning from Success and Failure
Navigating the Waters to Success as a GPO
Q&A
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RPA Buzz & Reality
“RPA is about fixing the potholes in the road. Do not confuse it with building the new highway”
Steve Gordon, VP Global Service Operations – BD
" Don't trade the entire toolbox for one screwdriver“
Sanjay Srivastava, Chief Digital Office – GENPACT
Software (bots) which allow enterprises to automate high-volume, repeatable tasks integrating existing applications for processing a transaction, manipulating data, triggering responses and communicating with other systems
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“Bot Plaudits”
Potential massive percentage efficiency gains
Cheaper and faster than ERP extension, integration
BOTs don’t get bored, tired or lose concentration!
Rapid implementation
Ease of development
Integrates technology gaps in end-to-end processes
Eliminates frustrating tasks from valuable people
Makes the workplace more appealing to hire into
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“Bot Kicking”
400% task productivity increase may not be significant in the end-to-end process
“Bot-Sitting” control, oversight and governance – who is looking after the bots?
Bot-development still needs governance, control and process
Bots have no judgement and will repeat errors at scale if bot rules are not well designed and monitored
Powerful rules-based automation – but not AI, and for good reason!
If you don’t have detailed, task level, standard operating instructions (SOP), don’t bother with RPA
“Automation makes bad worse, faster”
38% of RPA implementations FAIL to achieve expected benefits
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The AI Classifier found 92.5% of cases!
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Diagnosis by AI
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
But the Human Pathologist was better – 96.6%!
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Diagnosis by Human Expert
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
But AI supporting humans is even better! 99.5%
Diagnosis by Expert Human AND AI
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The GPO Balancing Act
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Efficiency(Task Automation)
Effectiveness(Process Optimisation)
Practical Insights: Purchase to Pay / Source to Pay
Demand Sourcing Contracting Ordering Fulfilment Settlement
Supplier Management
Working Capital Management
Spend Analytics & Cash Recovery
Performance Management (KPIs, Benchmarks, Trends, Process Variations etc)
Source to Contract Purchase to Pay
Source to Pay
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Practical Insights: Performance Gaps
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Peer Group Benchmark
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Practical Insights: Process Cycle variations
Days 0 5 10 15 25 30
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Practical Insights: Payment Terms vs Working Capital
Procurement
Sourcing
Operations
Finance
E-Inv
ERP RPA
P2P
Insight across End-to-End Process & Technologies
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Getting Insight from Data – Old World
Requirements
Planning
IT Facilitation
Configuration
Results
Cycle Time
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“Uberization” of Practical Insight
Results
“Connect &
Go”
Technology Disappointment CycleRobotics, AI, Blockchain, IoT, Autonomous
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This Session
Introduction
The Drivers for Digital Transformation
The critical need for end to end process thinking
Why simplification is no longer just ‘nice to have’
The role of the next generation Global Process Owner
Exploiting the Intelligent Automation opportunity –Learning from Success and Failure
Navigating the Waters to Success as a GPO
Q&A
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Navigating the Waters to Success as a GPO:
Manage the Detail and the Big Picture
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Navigating the Waters to Success as a GPO: Focus on Critical Business Outcomes
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Increased Contract Compliance
Increased spend visibility
Bring more spend under IP control
Pay on time
P2P Efficiency
By implementing P2P Standardisation we will:
➢ Increase contract compliance
➢ Increase spend visibility
➢ Pay suppliers on time
➢ Increase the efficiency of the P2P process
➢ Increase reach of the P2P compliant solution; and
➢ Reduce risk by bringing more spend under control
Navigating the Waters to Success as a GPO:
Dual Operating System – source Kotter
Managing
1. Planning & Budgeting2. Organising & staffing3. Problem solving4. Doing what we know well5. Continuous reliable results
Leading
1. Establish direction2. Align and motivate people3. Inspiring and mobilising4. Exploring and creating5. Propelling into the future
Process OperatorRobust
Process OwnerAgile
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Process Operator vs
Process Owner
No One Hit Wonders - It’s a continuous journey . . .
“We always hope for the easy fix: the one simple change that will erase a problem at a stroke. But few things in life work this way. Instead, success requires making a hundred small steps go right -one after the other, no slipups, no goofs, everyone pitching in.”
Atul Gawande, Better: A Surgeon's Notes on Performance
The “aggregation of marginal gains”, improving everything by a small percentage, is a proven recipe for success
47 © 2018 Consider Solutions All rights reserved
This Session
Introduction
The Drivers for Digital Transformation
The critical need for end to end process thinking
Why simplification is no longer just ‘nice to have’
The role of the next generation Global Process Owner
Exploiting the Intelligent Automation opportunity –Learning from Success and Failure
Navigating the Waters to Success as a Digital GPO
Q&A
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Navigating the Murky Waters to Success as a GPO
Some Thoughts from a 3 minute TED Talk
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“I skate to where the puck is going to be, not where it has been.”
Wayne Gretzky
Reputedly the greatest ice-hockey player ever
Questions or Research Participation? [email protected]