Why adding new tech on top of old processes is a bad idea

New, advanced supply chain solutions accelerate decision making to near real time and raise supply chain agility to a new level. But they rarely work well on top of yesterday’s processes. It is time to rethink old doctrines.

The nature of digital transformation has been evolving for decades. We went from turning paper into digits, to optimising processes with software, to networking, to software as a service (SaaS), and now to the new digital economy. Technology today has the capacity to transform nearly every aspect of an organisation, including its supply chain. That in itself presents a great opportunity to reinvent how companies do business and expand their reach. You can also argue that the stakes of these transformations are higher than ever because they can alter the lifeblood of how a company creates value – sometimes with a direct impact on brand perception.

However, as ambitious companies look to next-generation supply chain capabilities, some are still caught in the old world where technology is something you “add” to an existing set of processes. I definitely remember this doctrine from my own career as a young consultant back in the day. Back then, we always started with the processes, and then afterwards we thought about what kind of technology could be used to optimise them. It was a world where technology was an “add-on” in the periphery rather than a bedrock in the core.

Today, thankfully, things are very different. Technology is no longer just about making existing processes more efficient. New supply chain systems now bring completely new processes and ways of working to the organisation. Next generation technologies, such as AI and machine learning, are already starting to revolutionise the connections that organisations have with their customers and suppliers. But these technologies are not implemented by tweaking existing processes: they require fundamental changes to the way supply chain professionals think about mastering complexity.

Another way to look at it is that the relationship between strategy and technology has become more and more symbiotic over the years – as opposed to the one-way street it once was. Strategy should of course still inform the tech needed to deliver it, but advances in technology are also informing strategy – and more and more so. Without recognition of this interdependent connection, the technology used by the supply chain organisation (and the company as a whole) will often be sub‐optimal, lack direction, and be disjointed across existing architecture and processes. Ultimately, by being stuck in the “processes-first” doctrine, conservative supply chain professionals could risk losing sight of how customers want to interact with brands altogether.

Start your digital transformation with the end in mind
There is of course no “one size fits all” for succeeding with digital supply chain transformation, but a good piece of advice is to always start a transformation by thoroughly, strategically and carefully assessing how technology can drive your digital future.