February 04, 2021
February 04, 2021
Contributor: Rama Ramaswami
For supply chain leaders looking to digitalize their supply chains, now’s the time to convince CEOs of the business case. Here’s how.
Supply chain disruption during the global pandemic offers chief supply chain officers (CSCOs) a prime opportunity to get leadership backing for supply chain digital transformation.
Gartner research shows that the pandemic has only increased the urgency for digitalization. Many CEOs expect to accelerate digital initiatives, and the vast majority of CSCOs intend to dramatically speed up their supply chain digital maturity progress over the next five years.
“Supply chain leaders should take advantage of this once-in-a-lifetime chance to raise the profile of the supply chain function and develop supply chain capabilities to support business priorities,” says Pierfrancesco Manenti, VP Analyst, Gartner. “But CSCOs must build a sound business case to support their digital vision’s business value and priority alignment.”
Before you begin, keep in mind that the traditional business case framework has changed in several ways:
To ensure a successful business case, learn, understand and align with your organization’s business priorities. Three factors will most likely steer digital investments.
Any digital investment that helps the organization return to revenue growth will be approved quickly and efficiently. Revisit your supply chain operating model to support new digital business models, such as e-commerce, and digitally enabled products, such as subscription-based and pay-as-you-go options. Artificial intelligence (AI) and advanced analytics are among the technologies that will significantly impact business growth.
Supply chain is often the go-to function for CEOs to optimize organizational costs. Be prepared with ideas on how to leverage digitalization to optimize the supply chain while protecting it from linear cost-cutting. Three technologies can help optimize supply chain costs through operations automation: Robotic process automation, advanced analytics and collaborative/smart robots.
The pandemic exposed supply chain capability gaps that CSCOs are now pressured to close. An agile supply chain is one that can sense and respond to unanticipated changes in demand or supply and do so quickly and reliably, without sacrificing cost or quality.
Digitalization is a key enabler of agility, as it supports a more transparent, automated, intelligent and orchestrated end-to-end supply chain. AI and advanced analytics, along with big data/data lakes and the Internet of Things, are the technologies that best support agility and responsiveness.
Building a successful business case for digital transformation is as much about winning hearts as it is about engaging intellects. To secure C-suite support, walk senior leaders through the short-term initiatives necessary along the journey and define the associated business benefits. Also articulate a bold long-term digital vision, clearly explaining how it will help the CEO achieve the company’s future goals.
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Recommended resources for Gartner clients*:
Supply Chain Executive Report: Make a Compelling Business Case for Digital Transformation
*Note that some documents may not be available to all Gartner clients.