Supply chain disruptions: increase revenue and reduce risk

An essential link in the economy and society, the sector represents 10% of French GDP for 1.8 million jobs, ie 4 times the automotive industry. However, according to the latest project figures44, in June 2022, only 20% of transatlantic shipments to the West arrived less than 24 hours late, compared to 75% at the same period in 2020.

In order to continue to thrive and limit the risk of a supply chain breakdown, it has become essential to strengthen vertical integration with customers and suppliers to successfully close existing gaps and repair broken processes, not only within the organization, but also outside of it. Digital transformation, and in particular that of the middle office, have a decisive role to play in this area.

Bringing together the functions associated with the management of information held by the company – from the life cycle of contracts (CLM), to the configuration of quotes (CPQ) or to the management of relations with suppliers (SRM) – the middle-office truly embodies the space that links the front office and the back office.

As a result, it plays a strategic role in digital transformation processes, provided that the main business functions that support it, namely sales, purchasing and legal, work in a harmonious and integrated manner. For businesses and organizations to move forward and achieve a next-generation operating model, operating in silos is therefore no longer acceptable.

Responding to middle-office challenges

Given the urgency inherent in these challenges, a hybrid approach combining waterfall (traditional waterfall project management) and agile, or “wagile” methods, makes it possible to take advantage of the best of both approaches. It is the key to regularly deploying new products, new services or new functionalities in a very short timeframe, or to soliciting rapid and frequent feedback in order to be able to make the necessary adjustments.

However, if moving forward is urgent, collecting baseline data along the way, leveraging information that already exists internally and is often underutilized, is also important. If some data is sometimes not available, quotes and commercial proposals contain an abundance of information that is not recognized or used to its fair value.

The average duration of quotes, types of discounts, payment structures, or the specifics of an agreement compared to the standard model are some examples of the data that can be used in the context of this analysis, and serve to establish a point reference.

Breaking down silos with AI

In addition, companies often retrieve contract data from purchasing departments, from a multitude of different repositories and locations, to assess their risk exposure based on the payment terms of their various commercial agreements. .

In particular, AI makes it possible to create and develop a database through which these documents pass and where all contracts can be collected, stored and, above all, made understandable. Once this data is aggregated, teams are able to appropriately assess processes and identify the root causes of friction within the business.

In addition, digital tools have become strategic. They make it possible to quickly stabilize and reorganize strained and, in some cases, broken processes. They also promote obtaining precise, concrete and reliable information on the real-time situation of the company.

In this context, in order to better control costs and increase revenue while reducing risk, companies can additionally rely on AI to access new functionalities, such as validation requests for contracts that are subject to numerous modifications, or the implementation of alerts and notifications when necessary. It is also important to examine and collect this data empirically to be able to analyze the processes, in order to support sound and informed decision-making from the deployment stage, and not only after the commissioning of the system. these new features.

Digital transformation of the middle office

In order to set priorities and embark on a digital transformation journey, companies need to start collecting and analyzing analog data from contracts and business proposals.

These will help formulate a fact-based hypothesis about the value that can be achieved relative to business goals, with the goal of reducing friction within operations. Once this hypothesis is validated, the company will be able to mobilize the rest of its organization starting with its leaders, in order to define a clear vision of the objectives, to establish a roadmap and to guide the organization towards the implementation and the adoption of new processes.

Ultimately, despite a real need to improve the functioning of the middle office to optimize the supply chain, certain prerequisites are essential before considering any digital transformation project.

Thus, the proper integration of these technologies, and this from the first phase of implementation, supported by the help of a professional, are decisive elements to ensure that the following stages are successfully completed and that the expected results.

The key: better visibility, and therefore better control of the supply chain from A to Z, to repair but above all to anticipate any malfunctions that weigh on the logistics sector, whose good health is inseparable from that of companies. and territories and, by extension, of our economies and societies.

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