Embracing the Churn: How Digitalization Will Drive Us Forward as We Face a New Post-Covid Frontier

By Andy Beth Miller

The Cambridge Dictionary defines the word churn as moving something with great force, or to be agitated. Now, I don’t know about you, but I would certainly say that these recent days, weeks, now stretching into months, match that definition to a tee. And COVID-19 is the culprit behind the chaos. If you are also like me, you find yourself feeling like you are operating in the dark, trying to navigate your way through these unprecedented circumstances, where there simply is no rulebook or manual to light your path. Or is there?

My following interview with expert Joanna Martinez proves her to be a visionary far before her time, having already penned a book that speaks (almost with an eerie premonitory nature) to exactly the conundrum that we are facing during this global pandemic. But we will get to all of that. In the meantime, we begin our talk discussing her solution, which requires fast action, including the adoption of digital elements like Artificial Intelligence (AI) or Robotics Process Automation (RPA).

“I’ve been doing a lot of educating lately on digitization - there are a surprising number of people out there who have heard words like AI or RPA, but don’t understand them. [These tools] offer a huge opportunity for companies to become more efficient and lower costs—which is going to be very important as things gear back up in a post-covid world,” Martinez says.

I then ask Martinez, who studied engineering at Rutgers University and has held a succession of executive positions with such powerhouses as Cushman & Wakefield, AllianceBernstein LP, Diageo, and Johnson & Johnson, and is now a speaker, advisor, and self-described “Digital Enthusiast”, to define digitalization in layman’s terms. “Digitization is the application of technology to change a business model. Exactly which technology and how you employ it depends on the business you’re in. Overall a digital transformation should result in improved process, quality, and consistency,” she explains.

Martinez then offers two excellent examples of the possibledigital tools that a company could employ: “AI is the capability of machines to do things that typically require human intelligence, like language translation or problem solving. When you ask Alexa a question, you’re dealing with an application of AI. Same when you’re ordering online and have a question – likely, the first ‘conversation’ you have willbe with a Chatbot powered by AI.”

She continues: “RPA is about automating repetitive transactions. For example, an insurance company processes thousands of forms a day. Getting the right information to the right place in their system is likely being done through an RPA tool. Businesses with modest volumes who can’t do it on their own can outsource to an RPA provider.”

These innovative tools sound great, and I have to wonder how exactly they can be integrated into today’s procurement world. So, I pose a favorite question: “We often think of the saying, ‘Out with the old and in with the new,’ does this jive with your perspective of digital’s role in procurement… for the future?”

Martinez kindly obliges with a succinct answer and ready smile: “I love this question because the answer today is so different from what the answer would have been afew years ago. Early adopters [of digitalization], the large companies that have been around for a while, all have some kind of platform solution like Ariba or Oracle or Workday that integrate the entire financial process flow and ofteninclude procurement functionality. In the beginning, the implementation of these big box solutions created many opportunities for process improvement. With any end to end enterprise solution there are compromises, and often, they were in the procurement space. But that was the best any of us could do.”

She quickly follows her assertion with yet another downside: “And the transition cost of switching platform solutions is huge, particularly when they’ve been in place for a long time. There are tentacles reaching all through the organization.”

Luckily, according to Martinez, times—and options—have changed, or to use a better word, they have evolved: “Today, there are countless point solutions that deal with specific tasks – Bid Ops, for example, integrates AI into the bidding process. Tealbook for supplier identification and vetting. RSN is specific to print and promotional materials. You don’t have to throw out your big box platform model anymore or compromise with a sub-optimal solution. Instead, you can find the right point solution and employ it at a reasonable price point. Your P2P process can be the sum of many specific automated solutions. That’s a game changer.”

Today, there are countless point solutions that deal with specific tasks – Bid Ops, for example, integrates AI into the bidding process.

–Martinez

A game changer. A concept that is music to most of our ears in the current COVID-19 era, which is changing everything, shaking things up, and creating so much chaos and uncertainty—almost as if we (and our businesses) are being churned like butter, rousted about as myriad dynamics are constantly shifting all around us.

Martinez understands the fear and uncertainty we are all feeling, but rather than sit and allow it to overwhelm, she offers a much more proactive call to action: “In the midst of the COVID-19 crisis, it should be all hands on deck to do whatever is needed to source, manufacture, or distribute what the world needs today, whether it’s a food item or a respirator. That’s the number one priority, the short-term need.”

After clearly pointing out this initial first step, she then wastes no time in pointing to where the other proverbial procurement foot should be placed next: “How you do it is another matter. Many of the new point solutions out there are making their products available to help in the sourcing process, and even more importantly, their experts are there to assist. The point solution providers can do that because they are cloud-based and don’t require a lengthy implementation.”

Then? “[Ask yourself]: ‘What doesn’t work in our buying process?’ As you’re sourcing these important items, maybe you can be trying out these new tools to see if there’s one that’s right in the long term for your business,” she explains. “Emerging from the COVID-19-caused disruption, nearly every business will have an uphill climb back to prior profitability. How will you make your company more competitive going forward?”

Martinez reminds us that we are in the early stages of a digital revolution, then offers a somewhat surprising way to cope: “This is disruption, pure and simple, and the way to cope is different for every person. I specialize in helping businesses that are undergoing upheaval because I endured so much business disruption through mergers, acquisitions, sales, competitors, you name it. It was so traumatizing that I eventually developed a way to ‘embrace the churn’ – and I wrote a book about it. Maybe you’d cope the same way I did, maybe do something different, but none of us can stick our heads in the sand.”

This is disruption, pure and simple, and the way to cope is different for every person.

–Martinez

Martinez’s alluded to book, A Guide to Positive Disruption: How to Thrive and Make an Impact in the Churn of Today’s Corporate World, does exactly as the title teases, offeringa roadmap of sorts to navigate your way through these turbulent times, and as she notes, “embrace the churn.”

The good news is that, according to Martinez, this act of embracing—although it may sound daunting—is not Mission Impossible. “[Procuring] the money to invest in new [digitalization] tools is going to be a lesser problem than you think, because we are talking about point solutions, not the multi-million dollar multi-year big box installations. I’ve already mentioned that the smartest product providers will allow you to ‘try before you buy.’… If you are interested in trying one of the point solutions out there and a test run isn’t offered, just ask. It never hurts to try.”

Martinez’s passion about educating her colleagues on digitalization is clear, which makes it come as no surprise that she has recently developed a course called “Blockchain to “Bots” which does exactly that. “Time after time, people have quietly confessed to me how little of this digitization they understand. Executive management often thinks the organization is in a different place than they actually are... or maybe their own understanding of the possibilities isn’t robust either,” she shares. But she is seeking to change all of that—so that we can deal with, change.

Martinez leaves us with this priceless nugget of wisdom: “Digitization brings lower cost, better quality, improved decision-making and a faster process. Success will rely heavily on the smart contracts we negotiate and the way the tools are put to use up and down the supply chain. For those who embrace it, there is a whole new set of ways procurement can add value.”

She then issues a final, emboldened battle cry: “The futurebelongs to the brave. The shortages and agility demandsfrom COVID-19 required many of us to step out of ourcomfort zones, because in the midst of the crisis the oldplaybook no longer worked. Don’t go back.”

Joanna’s Martinez’s online tutorial, Blockchain to ‘Bots, is available at www.worldofdisruption.com.