A recent survey by PwC revealed that 83% of companies have not achieved the expected results from their supply chain technology investments. This highlights the need for companies to reassess their strategies to ensure they are getting the most out of their digital solutions and improving overall business outcomes.
The Importance of Clear Objectives and Selective Investments
The pandemic underscored vulnerabilities in supply chain operations, leading many companies to invest heavily in supply chain technologies. However, to see real value from these investments, companies must establish clear objectives and success criteria from the start. It’s essential to be selective with technology investments, ensuring that the chosen solutions align with the specific needs of the company. Moreover, it’s not enough to simply implement technology; companies must continuously monitor its effectiveness and make adjustments as needed.
Current State of Supply Chain Technology Adoption
PwC’s “2023 Digital Trends in Supply Chain Survey” gathered insights from over 300 executives responsible for supply chain and procurement operations. The survey showed that most companies are actively working to enhance their digital supply chain capabilities. Popular technologies include cloud-based platforms, the Internet of Things, intelligent data capture, and third-party spend analytics tools. Future investments are heavily focused on artificial intelligence (AI) and machine learning, with significant planned spending in these areas.
Challenges in Realizing Expected Outcomes
Despite high levels of technology adoption, many companies report dissatisfaction with the results. The issue often lies not with the technology itself but with the implementation process. Common challenges include insufficient time, inadequate capabilities, and a lack of effective change management. Only 17% of surveyed executives reported that their technology investments had delivered the expected results, emphasizing the need for better implementation strategies.
The Human Factor in Tech Investment Success
A significant barrier to maximizing tech investment value is whether employees possess the necessary skills and motivation to effectively use new digital tools. The survey found that 31% of executives identified challenges in getting employees to adapt to new ways of working. Additionally, 25% reported difficulties in attracting and retaining the digital talent needed to transform their supply chains.
Upskilling existing employees is crucial, as more than two-thirds of respondents expect this to be necessary for digitizing their supply chains. Training should focus on not just using new tools but also understanding their full capabilities and how they can enhance job performance. This approach will help employees adapt to new processes and contribute to the company’s strategic goals.
Balancing Long-Term Growth with Immediate Priorities
One of the challenges companies face is balancing transformative initiatives with day-to-day operations. Many leaders find themselves focusing on cost-cutting measures or short-term objectives rather than investing in long-term growth. According to the survey, while 53% of respondents cited driving growth as a top objective of their supply chain technology investments, fewer companies prioritized exploring new innovations (30%) or implementing different business models (16%).
Another crucial area for long-term focus is building resilience and managing risk. Despite recent disruptions highlighting the need for greater resilience, only 34% of operations leaders listed it as a top objective when investing in supply chain technology. This suggests a gap between recognizing the importance of risk management and taking the necessary steps to integrate it into technology strategies.
Strategic Implementation for Greater Returns
To truly benefit from digital investments, companies need to rethink their approach to technology enablement. This involves aligning investments with the company’s specific needs and being proactive in addressing potential gaps in planning and execution. Companies should critically assess why past investments may have fallen short and be willing to make necessary adjustments, whether in leadership, planning, or staff training.
By adopting a more thoughtful and strategic approach to technology implementation, companies can better prepare for disruptions, achieve a higher return on their investments, and capitalize on the growth opportunities that digitalization offers.
