Preparing procurement for a digital disruption

1. Preparing procurement for
a digital disruption in
Supply Chain
Amit Verma
Sr. VP, Head of Digital Transformation in
Procurement and Contracting
Reliance Industries Limited
April 2017

2. Agenda of CPO in 2017
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Cost Reduction, Managing risks and supporting growth… key goals of CPO
Source: Deloitte Global Chief procurement officer survey 2017

3. Going Digital – A key Strategy in VUCA world
Increasingly complex world.. #VUCA
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Technology is key to coping with VUCA
Source: Deloitte Global Chief procurement officer survey 2017

4. Digital Disruption: Which technologies are disruptive?
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Existing, scalable technologies Emerging technologies

5. What should a CPO do?
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Digital
Approach – How is
value created?
Talent – How do we
organize talent in to
become digital?
Supplier Collaboration –
How do we work with
suppliers?
New sources of value –
Digital economy?
Kick Off – where do we
start?
Some key challenges…

6. Kick Off: Dedicate resources, start small and set realistic aims
1. Invest: Create a Digital
Transformation team
2. Initiate a few projects 3. Build a Digital roadmap –
post 6-12 months
Skillset - mix of procurement,
project management, analytics
and technology; Innovative yet
collaborative leadership
Start with projects where
technology is proven and which
address pain points (not
vitamins); POC vs. Full project
Create a rolling 12 month plan
every 6 months and overall
vision statement
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7. Approach: Value lies in diving TCO & improving E2E metrics
Total Cost Optimization Scope Digital projects across functions to
optimize End to End (E2E) metrics
Higher value is delivered when Digital is
leveraged on TCO rather than price only :
Quantity, Quality, Accuracy, Transparency
Create shared goals and work with
collaborative approach
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8. Talent: Agile, Innovative and Connected organisations
1. Connected Organizations vs.
Hierarchical
2. Agility 3. Innovative organizations
Tools: Provide forums & tools for
staying connected, skills for social
media - Intranet portals, group
collaborations tools
Planning: 10-20% is monthly/
quarterly
Staffing: Slack in system to drive
quick projects with SWAT teams
Skills: Innovation mindset –
traditionally strong; Diversity
Reward system: Reward effort.
Do-Check-Fail-Redo
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9. Supplier collaboration: Contracts, Co-create, Start-ups
1. Engage with them as
suppliers/ partners:
2. Initiate Pilot Projects
and Co-creation
3. Support potential
start-ups in our
Accelerator - GenNext
4. Acquisitions/
Partnerships/
Investments
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Best used when
readymade solutions
are available
Technology exists but
not applied to your
industry
Support start-ups to
create new solutions
Co-partner with peers,
vendors for joint
ventures

10. New sources of value: Monetize data and Build IP
1. Monetize data 2. Build IP together with vendors
Solutions for your industry – “Connected
retail warehouse person”
Terra bites of data generated daily – what
can be monetized? E.g. drone along
pipeline also monitoring weather?
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11. Challenges: Acceptance of failure, Cross silos working, Collaborative
ecosystem
1. Can we accept failure? 2. Will we able to work
across silos?
3. Will we try to do everything
alone or collaborate?
All technology isn’t perfect as yet
and its application may fail. Don’t
punish failure and reduce risk
through POC’s
Success of a project lies in its
implementation and that needs
alignment of goals and
collaborative approach
Highest value is created by
partnerships – industry,
vendors, R&D labs and
regulators
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