SAP exec shares tips on digital transformation, coronavirus disruption and implementing change at the SIG Summit

During an online SIG Global Executive Summit keynote address last Wednesday, an SAP executive and a business consultant who specializes in technology, sourcing and supply chains gave a one-two punch on how procurement leaders can help their companies approach digital transformation.

SAP’s Baber Farooq, Senior Vice President of Product Strategy at SAP Procurement Solutions (Ariba, Fieldglass, S/4HANA Procurement), discussed four reasons why procurement is changing and how technology is playing a role.

Melissa Mohesky-Schmidt, Principal/President of Innovative Insights Group, spoke directly to practitioners in procurement about how to assess their digital needs, find a solution and implement it so that it pays off for workers and the company.

Farooq highlighted four areas of importance when considering digital transformation:

• Automation will become more important for businesses overall, not just in procurement. Productivity growth has flattened, Farooq said, so SAP is designing procurement solutions that can help across the whole business. “That’s not just with respect to making procurement more productive,” he said. “The belief is that if procurement departments become more productive and focus on strategic elements then they can make an impact on the entire company, driving better efficiency.” Businesses also do that with help from suppliers, he said.
• Suppliers and supplier management: “It’s becoming more of an art of managing co-innovation partnerships. Suppliers are truly, truly an arm by which organizations can and should innovate.” He said procurement teams are in the best position to collaborate with suppliers, and that work can foster innovation for the company to grow and add value.
• The rise of external workforce: He said that unemployment from the coronavirus disruption has changed how companies will hire, likely meaning fewer full-time hires and more contingent workforce engagements. But companies will still need to fill key roles. “It’s not like requirements for skills and demands for skills are going to go down for organizations. Procurement can play a big part in making sure that the right skills are available at the right time even though you’re not doing full-time hiring.”
• Ingraining purpose within the process: Farooq said that customers want to buy from companies that are committed to making an impact on communities. Employees also want that from their companies. He said SAP is facilitating that with its new “5 & 5 by ‘25” program, where SAP aims to direct 5% of addressable procurement spend to social enterprises and diverse suppliers by 2025.

For procurement personnel doing the day-to-day jobs, Mohesky-Schmidt’s experience in business led her to what she advises on seeking digital transformation, implementing the technology, and ensuring that your workers’ needs are met and that they buy in through change management.

“In my journey, we were working on legacy systems, and we really had to make a transformation to an ERP system overall,” she said. “In our company, we did that around the world on one platform and in five different divisions — those divisions were very unrelated. So the key there is to blueprint and understand your ‘why’ and get to the people who are performing the tasks and not sit in a bubble.”

 She also told Spend Matters that online events like the SIG Summit held are vital during the coronavirus disruption.

“I appreciate all organizations attempting to keep the ball rolling with learning and sharing events,” she said. “We simply have to make an effort to shift our activity … to participate. In the future, this mode of participating may open doors for many even when face-to-face dialogues are safely offered.”

SIG hosted its 59th Global Executive Summit. Read about the opening keynote address and more coverage of the event from Spend Matters.