Inside Insights: Successful SAP Transformation with Lisa G. Smith

In this latest episode, Lisa Smith joins Mustansir Saifuddin to dive into the world of SAP transformation and process improvement. Lisa shares how to leverage SAP to streamline supply chain processes, optimize business operations, and drive significant improvements. Listen in as Lisa dives into the importance of business objectives, alignment, effective change management and so much more.

Lisa Gonzalez Smith is a trusted global procurement leader transforming global end-to-end supply chain processes and driving organizational change management. Lisa is a seasoned source to pay executive with over 30 years in global automotive procurement (Direct & Indirect) and a proven record of delivering SAP Ariba global programs at Ford Motor Company on budget and ahead of schedule with state of the art, cloud-based technology

LinkedIn:
Lisa G. Smith
Innovative Solution Partners

Mustansir Saifuddin

X
@mmsaifuddin

Episode Transcript:

[00:00:00] Mustansir Saifuddin: Welcome to Tech Driven Business, Lisa. How are you?

[00:00:38] Lisa Smith: Doing great, Mustansir. How are you?

[00:00:40] Mustansir Saifuddin: Doing wonderful. Thank you. I'm so excited to have you on our show. And today we would like to talk about SAP transformation and process improvement and what other person can talk about that? , Especially in the context of supply chain processes.

[00:00:56] So I really look forward to this session with you.

[00:01:00] Lisa Smith: I certainly appreciate the invitation to do it, and I'm excited to be here, and thanks for the opportunity. I enjoy being able to share some of those learnings and have these these fun discussions, so.

[00:01:11] Mustansir Saifuddin: Absolutely. So let's get into it. You know we talk about companies leveraging SAP. When you talk about leveraging SAP to identify and eliminate, basically the idea is inefficiencies in the supply chain processes. How can they do that? what's your take on this?

[00:01:29] Lisa Smith: Well, I think, you know, first of all, great technology can be used to really drive change around how business gets done. So defining what's important for the business to have going forward. Defining what is important and what they need then allows for SAP's technology to drive how that gets done. But with that, there's a lot of change to those processes, or if you really want to transform the business, there should be and, but with that, you need to be mindful of the [00:02:00] change impact.

[00:02:00] That comes along with that. The change that impacts the people, be it internal employees, be it external with suppliers, for example, and you want to bring those folks along on that journey and get them excited about the change, right? One of the things that I find is tremendous is being able to leverage SAP's technology to streamline, commonize and simplify processes across the enterprise.

[00:02:25] And it has the great. breadth and depth in order to do that. And that process capability depth and breadth allows for that to happen. And so it allows you to then ask yourself as an organization, why can't we do business, for example, the same way everywhere, unless there's a legal or regulatory or tax reason why do we have to be different?

[00:02:48] How can we simplify this? How can we take some of that inefficiency out of the process? And the software can really help drive that.

[00:02:56] Mustansir Saifuddin: That's excellent point. I think what I'm hearing from you is as much as you can commonize your processes and be able to keep the system as simple as possible. Allows you to leverage the, the capabilities a lot more

[00:03:11] Lisa Smith: Yeah, especially with cloud technology to get the, the lifts and the upgrades and take advantage of those. Definitely.

[00:03:18] Mustansir Saifuddin: Absolutely. That kind of leads me into this discussion about, you know, everybody talks about metrics when we talk about SAP driven process improvements especially, what are some of the key metrics to measure your success in those scenarios?

[00:03:35] Lisa Smith: Well, I think regardless of what functional area that you're looking to improve be it in finance or procurement or supply chain you know, manufacturing, inventory, wherever, I think it's important to start with what are the objectives for the business? What is it that you're wanting to achieve and accomplish?

[00:03:52] Whether it is additional incremental cost savings, whether it is operational efficiency improvement, whether it's better [00:04:00] compliance and controls or faster days to close or better forecasting lower inventory levels, whatever those metrics are, I think it's important to use the business objectives to drive that and then determine what success looks like.

[00:04:17] What are those objectives? How are we going to measure those and determine those up front in your process in your, future state design? If I want to improve on time sourcing by 25%, like, let's say, or lower raw materials inventory by 10%. You know, that's a clear objective. Now, how am I going to measure that?

[00:04:39] What's my format or the actual calculation tactically to measure that? And then , you can understand those. And the reason it's important to understand those up front in the process is because that helps ensure as you're designing your future state business process in the software and the software starts to be configured that you drive those outcomes based on those metrics.

[00:05:03] So what are those metrics that are important to your business to achieve success and implement those very clearly with a way to measure and then use those to guide the future state process design.

[00:05:20] Mustansir Saifuddin: Interesting. So it seems like you're using your business KPIs and kind of molding it into what SAP can do for you in those key metrics.

[00:05:29] Lisa Smith: Right. And there's a lot of embedded , kind of inherent KPIs that are part of that process. And then, of course, with the incremental, A. I. capabilities and the analytics capabilities and so forth, you start to bring those metrics to light much much more quickly than perhaps in a, previous state, especially if that previous state was manual or very heavily reliant on Excel and things of that nature, which I'm sure there's a lot of companies that experience that.

[00:05:58] Mustansir Saifuddin: No, absolutely. I think you hit up on a [00:06:00] very good point over here. I mean, analytics is one of my areas and I know that it is so important in this SAP implementations that you have a very, I mean, there's a robust set of analytics that comes to the system. But based on your business requirements and your measurement or the KPIs that you're looking at it can play a huge role in your success.

[00:06:23] Lisa Smith: Yes, absolutely. It can jumpstart or serve as a catalyst for those metrics. Many of those metrics are already from a common sense point of view. There may be incremental ones that you want and the data exists to allow for those to be created. And so there's a lot of flexibility in that space.

[00:06:40] The quality of built in compliance exists because it is moving processes from one step to the next and doing so with quality and embedded foolproofing mechanisms, similar to an assembly line, For example, when you're doing quality checks, as you're assembling parts on a, product, for example, you have the ability to understand the outcome.

[00:07:02] The embedded process capability that exists, has a built in quality and with that the analytics that come along with it. So those analytics are being driven by quality information and quality and disciplined processes. If that makes sense.

[00:07:18] Mustansir Saifuddin: Absolutely. And I think I like the comparison you gave with the assembly line. It's so true. It's everything. It flows in a, in a very. seamless manner. So it's like you don't even notice how this next process is going to take over. It's just from a business standpoint. It makes it so much easier.

[00:07:35] Lisa Smith: Right?

[00:07:35] Mustansir Saifuddin: For folks who are dealing with it day in day out that not only the analytics part, but, the different functions being able to communicate freely

[00:07:46] Lisa Smith: Exactly. Yeah. And share the actual data, share the real time data. Allow the, source data to drive analytics, but it's a consistent set of source data. That is across the functional areas, [00:08:00] although their metrics might be different and what they derive from that data, it may be different.

[00:08:04] It's based on that same quality of source information. And I think that's a really impressive capability to be able to bring to the analytics table and and bring that discipline to the analytics.

[00:08:19] Mustansir Saifuddin: Absolutely. Kind of leads me into this next discussion. You know, everything needs change management. Change management is one of the big topics, right? When you are doing an SAP transformation, especially in a global organization, where you have to deal with cultures, where you're dealing with languages different way of doing things how do you go about doing it?

[00:08:41] Lisa Smith: Well, my first two words are very carefully. The change management aspect of any you know, implementation like this or call it transformation, the change management is as critical as the business process as the software, those other elements it is critical key to a successful adoption and a successful outcome, but it starts with having the case for change, because what you're doing is formulating a vision for folks to help them understand this is where we want to go. This is where we want to be, you know. In the future, so many years from now and so forth. So what is that case for change? What's driving us to need to move to this next level? And if people understand the why, okay, that case for change, they're going to be far more open to considering and actually start to get excited about it.

[00:09:32] And I think that. Is also very important to have that message in that case for change articulated by the senior leadership from what I call a top down perspective and a top down advocacy, because that message sets a tone for the organization and it filters through the organization and it's very important part.

[00:09:53] I had a very strong set of C suite leaders that were very much [00:10:00] advocating for this. And so they were able to articulate that message. And then we could take that and embrace it with what I'll call a bottom up approach with the affected stakeholders. So who are those stakeholders? Understand the different what I call personas.

[00:10:16] Are we talking about requisitioners, or buyers, or manufacturing operation people, or finance analysts? Who are, who are the stakeholders that are going to be affected or impacted by this? And understand their cultural differences. From a culture standpoint, whether it's across regions or countries, whether it's across functional areas, You know, how messaging and how that change is impacting someone , in Europe versus Asia Pacific, very different.

[00:10:45] And so how you package the information and package the communications is important as well. And to nuance or tailor that accordingly. nuancing and tailoring also for the functions. It's what. Maybe how manufacturing perceives it may be very different than how marketing would perceive it or IT would perceive.

[00:11:03] And so how do you tailor again to the nuances of a particular functional area as well? If you can understand that impact and what the technology is going to do to their respective business processes, then you can say, well, what input do I need from them to ensure I take into consideration what's necessary and , Now, how we do it, they look different.

[00:11:26] And we'll assess that impact and create a strategy around that, but I need to make sure I consider what is needed for their, you know, for them to do their job successfully. And so when that's understood, then you can help them understand the change, keep them tied into what's happening, keep the communication flowing.

[00:11:47] And it gets them excited about a new way of doing business. And you can start to get creative about the way things are communicated using. You know, animated personas to help illustrate the from and to condition or [00:12:00] communication broadcast. Various things can be implemented and deployed. To give one example, when we had a very wide span of, of particular personas in this case, requisitioners that had to be communicated to, and they were very different because every function in the company requisitions, we held virtual office hours and we held them in local languages.

[00:12:20] We had the training materials, in the local language because somebody on the manufacturing floor may not be proficient in you know, one, one language, let's say English. So we had the materials in local language and so forth, depending upon the personas. So those are the things that need to be considered to help re respect that input from , the folks who are impacted and then be able to, to communicate it in a very clear way that resonates for them.

[00:12:47] Mustansir Saifuddin: I think that's a great advice and a great takeaway, especially when you're dealing with the folks on, on ground, you want to make sure that you're able to reach , to them the way they can consume the information and be able to train accordingly. So now that's very helpful. On a personal note, how are you staying on top of changes, now we are talking in the AI age, both business and technology are, are rapidly changing. So how do you keep up with these kind of change?

[00:13:19] Lisa Smith: Well, my youngest son would tell me I don't, but in, in reality, what's important to me is understanding that the continual evolution and innovations that are happening inside of SAP's technology, for example, and cloud technology in general. And I think there's so much out there. Yeah. SAP has tremendous webinars, you know insights, podcasts, things of that nature that can be, very illustrative of what's going on. There's a lot of information in various media forms that I use. But there are webinars, and also I do a bit of Googling and, you know, YouTube demo watching and those kinds of things. Also I think , their solution integration partners, their solution integrators also bring. [00:14:00] A lot of insights around what's happening. What are the trends in the business? What's happening in this industry? What does that mean in terms of leveraging the technology? So it kind of brings the technology and the business together. To understand where things are headed, be it, what are some of the new challenges of chief procurement officers, for example, in a post COVID society. You know, very different than a pre COVID condition perhaps.

[00:14:26] And so those kinds of strategic understanding, as well as what is the technology doing to support that understanding is largely available. So I do a lot of that just out of interest,

[00:14:40] Mustansir Saifuddin: Yeah, no, that's the only way right now to keep up is just be aware of what are , the mediums available to you and have that tenacity to go and get that information from wherever you can get and keep up with the changes in technology.

[00:14:56] S4HANA is top of the mind, a lot of companies these days. How can companies ensure a smooth transition to S4HANA? And especially when you talk about S4HANA, it's a big undertaking. How can you minimize disruptions to your operations? Can you elaborate on that?

[00:15:15] Lisa Smith: Again, I'll use that "very carefully" answer, but I think the first thing is it's important to prioritize risk mitigation first and foremost, you never want to jeopardize the business or disrupt the ability to provide the goods or services , that the company is charged with, providing.

[00:15:33] And you can't take it all at once either. How can I sequence this? If I establish a longer term vision or a view or a road map, okay, where I want to be, I have to take it in a series of steps. And perhaps some of those steps can happen in parallel. Some need to happen in a particular sequence because of interdependencies.

[00:15:53] Some may be able to, as you learn, you might say, gosh, I should do this instead first and then followed [00:16:00] by X. I learned a lot of those things as we went through deployment and the ability to kind of flex and be a bit more agile, I think is important, but sequencing things in order to try and gain the optimal value as quickly as possible, while you mitigate the risk. It's a delicate balance, but that's probably one of the , more important principles, if you will, to have top of mind in terms of how can I glean the value quickly while I de risk the business? And in order to do that, I think you need to have very clear timing milestones and deliverable milestones.

[00:16:37] And there needs to be a very good disciplined program or project management process, that is enabling that to take place. And you need to do that in order to ensure that the timing is kept. And also to contain the cost. Otherwise, you can start diverting off on different paths and the scope starts to creep and the money starts to keep moving, up you know, , on the scale and the timing continues to shift out.

[00:17:09] So it's really important to keep, the clear timing with the deliverables and have a governance of project management to control that very very tightly. And then the other one I mentioned is, is governance. That is critical as you're changing these processes. And you're perhaps completely eliminating a policy or preparing a new policy in order to do business a different way. Then what governance do I need to have in place so that I escalate those decisions quickly so that I'm not being. bound by or, you know, delayed by lack of policy decision making, lack of policy change approval, for example on the program. If I know I need that policy change in order to configure it this way, I better start having the governance or I better have the governance in place to be able [00:18:00] to escalate that quickly if it requires certain levels of approval within the organization. And then readying the organization for change. That's one of the key attributes to ensuring a smooth transition. Having a robust cadence of communication, a repeated cadence so that people know what to expect. It can be at a relatively high level.

[00:18:22] And as they get close to their respective deployments, it becomes more granular. The communications, the training materials, the virtual hours, things of that nature become more granular as they get closer to their respective deployments. And then , I employed something that Toyota taught me. They referred to it as PDCA and plan due check act.

[00:18:43] And so I have a detailed plan, not just about the program milestones and deliverables, but everyone's role and responsibility and all of the things associated with making that implementation happen or get to that achieved outcome and execute to that plan. Have the controls on the status through the project management or program management and the governance that I mentioned. Then act and adjust accordingly if, and when needed, which inevitably it will be needed.

[00:19:14] You have to adjust course, but it's really a PDCA continual loop of plan to check act as you move through the life cycle of a program.

[00:19:27] Mustansir Saifuddin: I like it. I think that's very useful, especially when you are In this cycle, if you want to make sure that every small piece is covered and the only way you can do it is having the right governance, having the right plan in place. And then, of course, the checks and balances at each and every milestone.

[00:19:44] We talked about a lot of different things. I would like to leave the session with what is the one key takeaway you would want to leave with our listeners today. Can you share that?

[00:19:56] Lisa Smith: Yes, I would. It's going to be 2. 1 is [00:20:00] embrace the technology to allow it to propel your business forward for a long term sustainable outcome. And do that with an open mind to changing process. And leverage that technology to drive that simplified process and understand the impact from a change perspective that comes with it and manage that in concert, because when you do, the success can be absolutely tremendous.

[00:20:28] It can be transformational. But the two go together.

[00:20:32] Mustansir Saifuddin: Absolutely. Great advice. Thank you for coming on our show. It was real pleasure to have you join us today.

[00:20:38] Lisa Smith: Well, likewise, I really enjoy the conversation and certainly it's an exciting space. There's tremendous opportunity for companies you know, that are looking to find whatever those objectives are, improved efficiency, cost reduction all the different things, the disciplines that , can really level an organization up to the next stage.

[00:20:58] And the next level in a, in a longterm way. So it's great fun. And I really appreciate the opportunity to be able to, to have the conversation. Thank you.

[00:21:07] Mustansir Saifuddin: Thank you.

[00:21:08] Thanks for listening to Tech Driven Business brought to you by Innovative Solution Partners. Lisa shared valuable insights that apply to all areas of an enterprise. Her key takeaway? Embrace technology to allow it to propel your business forward while effectively managing the change impact to ensure a smooth and successful transition.

[00:21:34] We would love to hear from you. Continue the conversation by connecting with me on LinkedIn or X. Learn more about Innovative Solution Partners and schedule a free consultation by visiting isolutionpartners.com. Never miss a podcast by subscribing to our YouTube channel. Information is in the show notes.