Three digital business changes for supply chain leaders
Supply Chain Chief supply chain officers can lead business transformation by considering these trends.
Chief supply chain officers (CSCOs) have an unprecedented opportunity to turn digital business disruption into success. Speaking at the recent Gartner Supply Chain Executive Conference in Phoenix Arizona, Peter Sondergaard — global head of research at Gartner — identified three key areas that will change in the digital era. CSCOs must react to these changes and learn to control and influence all three to ensure their place at the leadership table.
Power shifts among and within businesses
Every business unit is now effectively a technology startup. There is a shift of demand and control toward digital business units that are closer to the customer. This means business units such as the supply chain organization are spending more on technology. In leading organisations, one quarter of enterprise costs will be devoted to the digital transformation, and around 20 per cent of that will be allocated directly to supply chain transformation. Digital spending by business functions is directly impacting the ability of the CSCO to achieve a higher level of demand-driven value network maturity. This is a significant power shift.
Digital technology is reshaping the supply chain
The CSCO of the past was most concerned with enterprise resource planning and master data management. The focus now is on how the supply chain can consume and leverage data, integrate sensors and other elements of the Internet of Things, and use software for customer segmentation and marketing automation. E-commerce software, supply chain optimisation and traceability and product cost analytics need particular attention. This is a linear evolution of the investments underway in many supply chain organisations.
Some technologies, however, are not just for incremental improvement, they are disruptive too. Take, for example, a drone. It can do last-mile package delivery, but can also monitor disruptions upstream in the supply chain. There are myriad applications for these devices. Five years from now, they will be a standard part of supply chain operations in many industries.
The meaning of leadership is changing
The third area of change is leadership and talent is the key to digital leadership. Leaders must focus on organizational strategy and talented people that understand sales and operations planning, analytics and the emerging world of smart machines.
The best leadership advice is to make your bosses' priorities your priorities. Gartner's 2015 CEO Survey showed that CEOs' top priorities are information technology and talent. Make those your top priorities, then adapt to the digital reality with a bimodal capability, involve your customers, invest in experimentation, expect projects to fail, adjust and try again.
It's important to recognize that digital business is here. It's time to adapt and get a seat at the digital leadership table.
To learn more about trends affecting the Supply Chain, attend the Gartner Supply Chain Executive Conference 2015 in London on 23-24 September.