Building digital supply chain capabilities

Date : 26 February 2019

We’ve recently published the latest report in our ‘Powered by People’ research stream. It explores how organisations progress on their journey to becoming digitally capable and outlines the need for change in this increasingly important area and reviews case studies from the industry.

This research follows an excellent report my colleagues in our charity team on the same subject. It helps organisations self-assess their digital capability and plot a route to success. Kudos to the HR Industry Leaders Forum and various industry working groups for contributing to this research.

However, it’s not just a lack of awareness around digital capability that is a risk to our industry, it’s the challenge presented by an accelerating rate of change, which threatens to leave laggards behind. This raises two key questions:

  1. What capabilities are leading digital organisations demonstrating?
  2. How can organisations progress along their digital journey?

Introducing…. A framework for digital capability

To address these questions, we first need to understand where our organisation is on IGD’s journey to digital engagement.  This is measured across four stages of digital capability; Inaction, Recognition, Action and Instinct.  


Source: IGD Research

From Inaction to action

During the Inaction phase, businesses are unaware of the need for digital skills or are consciously not taking any action to address it. They may lack understanding or it may not form a priority in the immediate future. As businesses move from recognition to action there is a clear need for change. But at the Recognition phase, an organisation may be unclear on how to develop it or lack a strategy. When a business understands its priorities, has invested into a digital strategy and has clear capability plans in place, this demonstrates capabilities at the Action phase.

Instinct and beyond: ‘Self-Disrupt or Die’

Even in the Instinct phase, the journey is never complete. We must continue to self-disrupt and continually test new ideas to remain ahead of the curve. In a recent article ‘Self Disrupt or Die’, Tom Goodwin, Head of Innovation at Zenith Media gives several great examples of companies that lack the ability to self-disrupt versus those that do:

“Airlines are endlessly asking for passwords, passport details, frequent flier numbers, and my birthday despite me giving them access to everything always. My cable provider seems to have 42 systems that work separately, in both duplication and parallel, but who can’t talk to each other”
….
 “If I call Airbnb, they seem to know who I am immediately. From Slack to Shyp, from Blue Apron to Amazon, Zuli Smart plugs to Maple, Postmates to Handy, I’m getting increasingly spoiled by companies that seem to just work”
Source: Forbes.com

So why does it seem so easy for some organisations? Simple, many organisations have started at the instinct phase – digital is who they are and core to every business decision. These businesses were born digital. For huge blue-chip organisations with legacy systems, change will ultimately take longer. For other organisations, the route to digital capability may not mean a sequential leap from one level to another. If a suitable culture, structure and skill base exists, the opportunity to jump from inaction to instinct may exist.

Future Challenge

We’re seeing lots of great work by educational establishments to equip young students with some of these skills through an increase in the availability of Science, Technology, Engineering and Maths (STEM) qualifications. However, more needs to be done to expose young people to real life scenarios within organisations, this will help encourage other core skills such as critical reasoning, agile project management and collaboration.  Our report explores some additional best practice examples from Amazon and Unipart, exploring collaborations between universities, government and industry.

The full report is available to access on Supply Chain Analysis.

Thanks for reading, if you would like to discuss how IGD can help your business build its digital capability, get in touch – [email protected]

Alex Edge

Alex Edge

Supply Chain Insight Manager

Download our report to understand how supply chain excellence will be a source of growth and value for the future.

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