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  • Writer's pictureMatt Sparks

Practical Data or Technology Overkill

The awareness and use of technology and intelligent data analytics in supply chain management is spreading quickly. Even old school purchasing guys like me are starting to come around. With applications ranging from risk assessment, demand aggregation, supplier communication and transactions to cost modeling, product traceability, and others. Whether it’s AI, blockchain technology or just a well implemented ERP system, data analytics and technology are being used by supply chain organizations everywhere.

But the question remains, is the investment in time, energy, money, and training driving a measurable ROI? Many organizations spend money and time on new software tools, highly integrated ERP systems, and other technology and then never fully extract real value from this investment. They generate hundreds of iterations of data and reports but don’t always know how to turn that into strategic direction and actions or they never utilize all the capabilities available within the system. Unfortunately, in many cases, more time is spent putting the data together and implementing the systems than actually utilizing the technology to drive decisions and strategic actions.

So how do supply chain teams learn to balance the investment in the latest technology with real actions and define a clear path forward? The key is to remember these tools are just that – tools, a means to assist in achieving objectives. It is critical before ever investing in new software to have a clear vision of how it will be used. An organization needs to clearly define what it wants to accomplish and have the core processes mapped out before investing in the technology. Then a team can start to focus on what is needed to execute: identifying data requirements, determining how the data will be used, and then what tools will be needed to acquire and manage the data or improve the process. The key is to understand the strategic goals of the business and define processes before addressing the technology needs to support, not the other way around. Once an organization has a clear and focused plan, then they can explore all the new technology and tools available to execute their vision. Investing in anything with no clear direction or understanding of practical application is a waste of time and money.

Regardless of which technology is right for any one organization, there is a lot of value in leveraging these tools. The best way to do this is to make sure goals are clearly defined and the scope is sufficiently focused, and then identify the right tools to support that effort.

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