1. Successful technology implementation
requires research, change and a look at
short- and long-term goals.
MAKING TECHNOLOGY
WORKFOR YOUR COMPANY
ISM July 20168

2. S
ALT RIVER PROJECT (SRP), a utility company in Tempe, Arizona, was
facing a challenge: Its legacy systems — customized business operations
systems developed by internal IT teams — were outdated and reaching
end of life. “We had existing systems that weren’t integrated and didn’t
talk with each other,” recalls Carrie Young, senior director, corporate operations
services at SRP.
A new approach was needed. SRP personnel spent a great deal of time plan-
ning and researching new technologies. They consulted with representatives
from other utilities for lessons learned.
“This process was a way for us to get ahead of the curve, to determine what
we were going to do rather than wait for a legacy system to crash,” Young says.
“We took a proactive approach by considering what was the best system to match
our internal requirements that we could build upon as we moved forward.”
Implementing the right supply management technology can be challenging at
best for any organization. It can be hard to avoid the hype that a certain technology
will solve all your needs or that the latest and greatest technology will improve
your supply chain’s visibility or effectiveness.
It can be equally difficult to distinguish and assess the possible from the
probable: That although many intriguing technological innovations exist, you
can’t realistically implement them all. With choices that range from automated
equipment and other hardware to enterprise and collaborative-hub software,
as well as intermediate technologies like RFID that involve both hardware and
software systems, it can be daunting for an organization to know the best tech-
nology choices.
Using Technology as a Solution
One way to evaluate whether to invest in a new technology is by looking at what
similar organizations are doing, says Uday Karmarkar, Ph.D., Los Angeles Times
chair in technology and strategy at UCLA Anderson School of Management in Los
Angeles. That’s a conservative approach, he says. A more proactive approach,
such as what SRP took, “is to ask whether the current processes are failing or
broken, and if a new approach can solve the problem in a pragmatic way,” he says.
Supply managers also can look at new technologies from a comprehensive
yet balanced viewpoint, says Michelle Drew Rodriguez, manufacturing leader for
Deloitte’s Center for Industry Insights in Chicago. The November 2015 Advanced
Technologies Initiative: Manufacturing & Innovation report by Deloitte and the
As one of the nation’s largest pub-
lic power utilities, SRP provides re-
liable, reasonably priced electricity
and water to more than 2 million
people in Central Arizona.
ISM July 2016 9
By Sue Doerfler

3. Council on Competitiveness, a
Washington, D.C.-based leadership
organization, suggests evaluating
how technology innovation can
be applied to enhance your supply
chain by looking at:
• Core possibilities. How can you
use technologies to optimize your
existing products for your existing
customers?
• Adjacent possibilities. How can
you use technologies to expand
your business into new areas?
• Transformational possibilities.
How can you incorporate break-
through technologies and/or
invent products/services for mar-
kets that don’t exist?
The report, which surveyed
38 executives from global compa-
nies and organizations, found that
advanced technologies — the trans-
formational — help organizations
gain competitive advantage, pro-
vide new opportunities and create
economic growth.
“You can’t underestimate the
significance of companies’ short-
term needs or their focus on the
bottom line and driving shareholder
value,” Drew Rodriguez says. “But
at the same time, you must keep
an eye out for the future and also
have a longer-time horizon in play
— because that’s when transforma-
tional technologies can truly help
provide significant value to your
3business processes and products.”
Leveraging Technology
Nevertheless, focusing on the
core — how a technology will ben-
efit existing customers, including
employees and stakeholders — is
often the starting point for organi-
zations looking to implement new
technology.
SRP spent a year developing a
list of requirements, which included
electronic procurement capabilities,
when it researched available tech-
nologies. It selected an ERP system,
which it implemented in 2013.
“We developed requirements
to match business processes that
would provide the best opportu-
nity for us to implement a ‘vanilla’
solution,” Young says. “We had to
be clear about our objectives and
what we were trying to accomplish,
to make sure the solution lined up to
those requirements. These factors
contributed to the overall success.”
By implementing the ERP system,
SRP was able to shut down 22 legacy
systems that no longer required
support, she says. “IT could now
focus on this integrated solution.”
In addition to coming up with
requirements, supply managers
also should investigate what tech-
nologies offer and what their key
strengths are. When looking for
spend analytics software, Vulcan
Materials, a Birmingham, Alabama-
based producer of construction
aggregates, spent about nine
months researching solutions,
including viewing demos and con-
ducting pilot projects.
“We didn’t really know much
about these systems but we
became educated,” says Michelle
Lax, procurement product man-
ager at Vulcan, which ultimately
chose a SciQuest solution. “What
we learned is that the importance
of this type of system was the way
it classified the data.”
Finding Unexpected Value
Occasionally after imple-
menting a technology, organiza-
tions may discover unexpected
advantages.
Lax says that not only does
Vulcan’s new software benefit the
procurement group — it gives the
ISM July 201610
“WE HAD TO BE CLEAR
ABOUT OUR OBJECTIVES and
what we were trying to accomplish, to
make sure the solution lined up to those
requirements.
THESE FACTORS CONTRIBUTED
TO THE OVERALL SUCCESS.”
— Carrie Young, senior director, corporate
operations services, Salt River Project (SRP)

4. team more visibility on its data —
but the company’s financial analysts
also are starting to use it.
“Instead of only using it for
cost-saving projects or under-
standing the spend from a pro-
curement perspective, they are
looking at it from a financial analy-
sis-perspective to understand what
the spend is,” she says. “They are
communicating with operations
personnel so they can understand
who they are buying from and what
they are buying. Thus, plant man-
agers can now make better buying
decisions.”
Vulcan also has been able to
use the technology in unexpected
ways, particularly adding new data
fields that increase analytical capa-
bilities, Lax says. “We added a field
called ‘spend manager,’ which has
enabled us to enter the department
that is managing the spend. It could
be our department, which is more
of a centralized, strategic sourcing
group, or a local procurement
department, which manages spend
from a more regional perspective.
Or it could be managed from a func-
tional perspective, such as benefits,
insurance or IT.” Because the com-
pany is able to designate the spend
manager, it can better examine its
spend and determine the appro-
priate department to reduce costs
in those areas, she says.
“Another example is large
mobile equipment. When you buy
from dealers across the country,
such as a Caterpillar dealer, each has
a different name in your data base,”
Lax says. “It doesn’t say Caterpillar.
So if you want to know everything
you’ve bought from Caterpillar, you
can’t tell. We were able to add a new
field called ‘reporting parent’ and
name all the dealers as Caterpillar
or the designated brand. Now we
are able to run reports and we know
all of our spend with Caterpillar and
other companies.”
It’s important to think outside
the box of what a system can do,
Lax says.
Implementation Challenges
It’s not uncommon for orga-
nizations to experience hurdles or
challenges when implementing new
technologies.
For SRP, installing the ERP
system was the easy part of the
process, Young says.
“The most challenging and
most difficult part is the change
management, because you are
turning people’s worlds upside-
down,” she says. “You have
employees who have been in those
jobs 20 to 30 years, and now you’re
telling them you’re going to change
and do something different.”
New technologies always
create process and organizational
change, Karmarkar says. “It is
pretty much a rule that there will
be winners and losers in the course
of change, not to mention a lot of
new work,” he says. “Thus, getting
buy-in from senior managers and
overcoming resistance — both vis-
ible and unseen — is both crucial
and difficult.”
Lax says Vulcan’s procurement
group received management sup-
port to buy and implement the new
software. “In our company, if we
are doing something that affects
the stakeholders, we need to get
them on board. In this case, we
didn’t need to do that,” she says.
“It didn’t really change anything our
field personnel were doing. We just
had to make sure the new software
was valuable from a procurement
perspective. But our stakeholders
are now seeing value in the data
we receive. I get calls now from the
field asking me to run reports for
them.”
SRP established an organiza-
tional change management group,
whose members included stake-
holders, to help with the transition
to the new system.
“We spent months talking about
the process flows that were going
to change,” says Steve Francois,
director, purchasing services at SRP.
Training has been key to a successful
implementation. “You definitely
move toward process consistency
when everybody uses the same
system, when it’s fully integrated, and
when the cause and effect is under-
stood by everyone,” he says.
The Bottom Line
New technologies often contain
the promise of providing more value
to the customer or improving pro-
cesses, Karmarkar says. “But at the
end of the day, the only justification
for implementing a new technology
is improved business performance,
or in the common parlance: a posi-
tive ROI,” he says. “This may sound
conservative, but experience teaches
us that backroom improvements are
best treated that way.” However, if a
new technology also provides cus-
tomer value or process improvement,
that’s even better, he says.
To achieve positive ROI, supply
managers need to look at both short-
and long-term implications to see
what can help solve their business
needs today and in the future, Drew
Rodriguez says.
Some of those needs or perfor-
mance benefits may not be realized
immediately after implementation.
And the implementation of one tech-
nology may spur the need or desire
for another.
Young says, “We have a tech-
nology roadmap for supply chain.
We put in the core ERP system. We
got rid of the legacy systems. But
now, in that roadmap, we have other
requirements we need to build upon.”
One is a work-management system,
she says.
“We had an analogy during the
project that post-implementation we
were going to crawl, walk and then
run. Now we are no longer crawling,
we are walking. And we need to get
to where we’re running.” ISM
Sue Doerfler
is a publications
coordinator for
Inside Supply
Management®
.
AUTHOR
ISM July 2016 11
© Institute for Supply Management®
. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management®
.