In a conversation with CPO Innovation, Vikas Lashkari, Chief Procurement Officer at Ernst & Young talks about planning the journey of procurement digital transformation in India.
Widely known and recognised for his procurement leadership skills, Vikas has been recognised for his work in procurement and sourcing domain. He is a highly Influential procurement supply chain management executive with deep experience in managing large complex procurement in IT, Consumer Goods, Automobile and Consulting Industry. He Possesses strong advisory and execution skills on complex negotiation, total cost management, procurement process automation/building AI functionality, outsourcing, contracting and leveraging forensic capabilities in building a strong procurement environment. He holds a proven track record of establishing procurement organization in world’s top MNC’s like Microsoft, Whirlpool, Goodyear and Ernst & Young.
Q. 2019 is a year of pragmatism for Supply Chain. As we enter 2019, what are the top leaders doing to improve efficiencies in the supply chain today?
So, if I look at the procurement role and how the business is actually emerging, and more so from a consulting industry, where I belong to, I see a whole lot of new technologies coming in and a whole lot of disruption the way business is being done and the way businesses are being created.
“Leaders are focusing on the readiness of their teams to accept the age of intelligence and implement the change in their organization”
The way business was 10 years back, will certainly be totally different from the way businesses will be done in the next 10 years. So, to my mind, we are seeking essentially a whole lot of areas like cyber, analytics, supply chain, digital HR, intelligent automation, industries relevant to IOT solution, etc.
Since whole lot of things which is happening around technology and the way that we are doing work on a day-to-day basis is all changing leaders are focusing on the readiness of their teams to accept the age of intelligence and implement the change in their organization, in fact today we are very well-connected practically with every part of an industry from a consulting perspective, we are seeing that most of the primitive organizations are also looking at different ways of doing business, in fact, the way the whole thing is transforming, it is a must to have a completely different breed of people who can actually manage the future of the business, so that different breed is something that is bothering us and it’s not only related to supply chain but related to every part of the business that we are doing. It’s about HR, the workplace solution that we have, it is about procurement, it is about supply chain, it’s about the inventory management and whole lot of things that we have or we see on a day-to-day basis and creating an intelligent solution through automation, I think is the phrase that we have seen becoming persistence in every kind of industry and the speed at which it is happening is more disrupting than anything else.
Recently, we were having a panel discussion at Indian railways. Indian Railways is also trying to empower India through innovation in technology at railways. They are also thinking in a big way around approaches to automate Indian railways, then, we gave a thought around how banking system today is totally automated, there was a time 10 years back you could not do anything without going to the bank and now you do not go to bank for years and still able to manage funds, transactions & everything, all transactions happening.
I think the speed at which this change is happening requires a huge transformation and we need a different set of people, a completely different breed to really support this whole industry change that is happening. So, to my mind and to answer your question around how to improve efficiencies, I think efficiency is a part you will have to continue improving incrementally with time. It’s about creating talent and it’s about creating solution in the specific domain you are in which is significantly different and easy to use for people, for e.g. at EY I could not have seen a guy who could probably look at POs and agreements & they could be approved digitally from wherever you are in the world so you don’t need to be in the office to really approve or see the agreements that you send to the vendors, wherever you are on the go, you just sign those agreements and documents get automatically transmitted to people, accounts get automatically linked to your bank account and once the services are being supplied the vendor gets paid.
So, I think all these things are getting automated at such a fast pace that it`s mindboggling as to how it will probably happen in 6 months or 1 year or 5 years’ time, so the mantra is not around efficiency alone, it’s about to deliver efficiencies through a differentiated route and utilizing the intelligent automation and industry relevant IOT solutions and digitization of whatever you are doing, so as far as my opinion is concerned that is the solution that we should be looking at and most leaders are doing today.
Q. While numerous initiatives are being brought in the center towards the establishment of the next-generation, consumer-driven digital supply chain, do you think many approaches lack direction and, as a result, fail to scale up effectively?
Yes, true but it’s not about the inability to scale up, I think you need to understand how the industry is changing and how the things are changing. So that’s more important to understand what will be relevant in one year from now and five years from now and how do you keep pace with that, so the technology that is there today to deliver a solution may not be relevant in two years or ten years’ time. The transformation which is happening between now and in the next ten years it’s going to be extremely fast paced, so in my mind to scale up with these new challenges & technology we need to keep pace with the whole new breed of startups that are now developing and you need to know that which strategic startup might become a Google or Amazon in five years from now and that is the piece that you really need to understand and tie up to, if you have to be effective in your strategies and meaningful innovation.
Q. How important will be the decision toward the choice of Technologies towards the transformation journey?
Yes, so I think from a stability perspective, you need to choose a partner who has at least deeper knowledge & deeper sustainability, ability to really sustain itself to the changes that are happening and also imbibe and adapt to the changes which are happening at a very lightning scale. I think it is very important for us to partner with the right technology solution providers and young entrepreneurs.
There are today, lot of young people out there, who are IIT pass-outs and want to do business and no more opting for jobs, they want to understand the challenge and current pain points, propose and come up with a unique solution and do business, earlier these youngsters wanted to get placed at a multinational organization and secure their future.
Q. What could potentially turn out to be the biggest challenges in the coming years and how should Supply Chain Organisations intend to meet them?
So let’s look first at the supply chain perspective altogether, supply chain, if you look at it purely from a procurement angle or from an inventory management or warehousing standpoint, and to an end, if you look at the supply chain solutions we are looking it, these are changing very fast, so it is not about the growth of the number of people who will be there but it’s about the quality and innate talent of these people who are going to be sustaining themselves in procurement more longer, these people will be transactional, so we really don’t require people who check POs, type POs and call vendors or other similar things which were done manually in the past, all of these is now automated, thus we really don’t require people to create POs, PO is being automatically generated, automatically getting signed.
“Today procurement is no more a mundane job and has evolved as a value-added centre of profit delivering more strategic bottom line results and values mission critical to business”
We don’t need that staff in procurement anymore who are experts at doing repetitive jobs. Now you need new people who are well aligned with the emerging technologies and people who are highly trained and armed with the latest trends to deliver the final value, earlier people in procurement were doing the mundane job, but today procurement is no more a mundane job and has evolved as a value-added center of profit delivering more strategic bottom line results and values mission critical to business, prosperities and highly trained in terms of putting the final leg procurement solution in the industry. So as far as my opinion is concerned right talent who are aligned with emerging strategic concepts would be one of the key challenges in every industry and also be in focus in near future.
Q. Will the Digital Operating Model help realize the untapped potential of existing resources and capabilities within an Organization?
Yes, that’s the way the journey is going to be, it’s not about the growth in numbers and not the growth in talent that we are looking at, but again it is about the quality of talent that will be supporting the overall implementation of emerging technologies and the entire gamut of activities that we will do in the procurement and supply chain.
The future of supply chain is going to be totally different from what we have done till now and to manage that you will have to have a different set of talented people who would be essentially required to support that. The quality of that breed has to be totally different from what it is today and when I say quality it will be both in terms of technological knowledge that they carry in terms of managing the supply chain and also how to execute the knowledge that they carry and use the tech tools that are available in the market.
No doubt one has to be fast paced in learning and updating once knowledge for optimal utilization, optimizing assets at an ideal rate will certainly be always a challenge because new technology always keeps coming and we have a pressure to work more and more with lesser number of people. So, imagine 20-15 years back I used to run an organization worth 1000 crore of buying with a 25-people team, today I do 7 times to that value with hardly 10 people and probably in times to come there will be only 4 people who would be doing the same buying. So, you know the number of people would be compressed on an ongoing basis in times to come but the focus, to really realize the untapped potential should be on having the right quality of people who are experts at using optimally the disruptive tools that are available in the market and in right terms fit in the organization overall agenda.
Disclaimer: This article is based on an Interview with Vikas Lashkari.