3 Misconceptions Holding Back Supply Chain Planning Technology Initiatives

To address accelerating supply chain disruptions, planning leaders have aptly invested in digital technology, and looking toward the future, investment is expected to continue. According to Gartner research, over 50% of supply chain planning leaders surveyed expect to invest in or plan to invest in some combination of emerging supply chain technologies in the next two years.

However, today many are not realizing the full potential of their organization’s digital investments. Our research indicates that 44% of planners surveyed report that supply chain transformation initiatives executed in the past three years achieved half or fewer of the initiative’s targeted benefits.

What is standing in the way of digital transformation efforts? In recent detailed interviews with planning leaders, the main issue that comes up time and time again is a lack of adoption among their teams. When it comes to addressing this challenge, we find there are common misconceptions about what is holding teams back and which strategies will improve the results. The three most prominent misconceptions include:

1. Building awareness of the benefits alone will drive adoption

Many planning leaders think the greatest barriers to adoption are technical. In actuality, the primary reason new tools face resistance is because of perception. The tool can be configured just right, and planners won’t use it if they’re not convinced of its reliability and effectiveness.

This presents a problem for leaders who tend to lead with the benefits of the tool; these benefits will not break through to their teams if the planners do not trust that the tool will function as intended.

There are many potential causes for this mistrust. Planners may be unclear about the data sources or may find the data that feeds into the tool to be limited or otherwise have shortcomings. Planners may also test the tool and find discrepancies between its output and those of existing tools they are comfortable using, such as spreadsheets. These discrepancies can erode confidence in the reliability of the output of the new tool they are being asked to use.

To increase planners’ willingness to adopt, involve planners in the selection of the tool, not just the customization of the tool after it is chosen. You can also build trust among the team by showing which data sources feed into the tool and asking for feedback on the limitations of those data sources. Lastly, in advance of implementation, compare the new tool output to that of the legacy system and, if needed, explain the reason for the discrepancies.

2. New technologies must be user-friendly

Planning leaders have typically prioritized user-friendliness and simplicity as key criteria for introducing new tools to their teams. However, our research indicates planners do not mind using a complex tool.

If the tool can achieve the level of data granularity and visibility needed to make an informed decision, complexity itself is not the main barrier. Instead, the key challenge to using a new tool is that planners struggle to transition their workflows in accordance with the new tool. When they encounter challenges that they can’t quickly overcome, they tend to regress to legacy planning tools.

To improve adoption, planning leaders need to have a mechanism for receiving feedback early in the process of introducing a new tool to their teams and ensuring that the feedback is addressed. If concerns are not alleviated early in the process, negative attitudes about the new tool’s shortcomings have a way of snowballing through the team and creating entrenched negative attitudes that are hard to overcome later.

Additionally, extend change management activities to collaborators outside of the planning unit so that collaborators embrace and reinforce the use of the new tool rather than asking planners to work around the tool or use the old tool.

3. Existing business metrics will successfully measure adoption

Traditional business metrics that measure adoption can be misleading because they do not always account for work that can be done outside the tool, or they may be impacted more by factors outside of technology such as process efficiency and organization structure.

We recommend using multiple types of metrics to measure adoption rates more holistically, including tracking user experience, automation, and efficiency metrics.

Planning leaders also need to adopt a governance framework to ensure these metrics are being updated in a timely fashion, ownership of metrics is clearly defined and connected to key performance indicators, and that action is actually being taken based on the metrics.

To achieve greater value, planning leaders must shift the conversation with their teams from “Why are you not adopting the tool or process?” to “What do you need from me as a leader? and “How can I help you overcome barriers?” By identifying friction points and eliminating them so that planners do not perceive new tools as a risk to their job performance, leaders will develop trust among their teams that will lead to greater adoption.

About the author:

Ingrid Gonzalez McCarthy is a senior research director in the Supply Chain Planning Team. Ingrid focuses on sales and operations planning, sales and operations execution (including implementation), demand and supply planning. She can be reached at: [email protected]

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