Page 11 - Risk Management Bulletin January-June 2023

RMAI BULLETIN JANUARY - JUNE 2023

tightly integrated into ERP and back office systems not are focused on digital transformation, but supply chain
allowing planners to perform what-if analysis, you run teams are unclear what this means. Unfortunately, the
the risk of planners forced to use spreadsheet analy- focus is on technology acquisition not on building ca-
sis and build maverick processes. The issue is simple. pabilities. For example, SAP touts digital transforma-
No spreadsheet jockey can adequately model the com- tion an integrated cloud-ready portfolio that includes
plexity of supply and demand variability in a spread- predictive analytics, automation, and Internet of
sheet. As a result, in the first phase of the pandemic, Things (IoT) capabilities. The issue? There is no clarity
due to the tight integration, over 90% of decisions on how these advancements in technology improve
were made based on spreadsheets. The action item is capabilities. In the process of software evolution, SAP
to redefine planning. Only 28% of companies invested teams, like other functional and well-intended teams,
in the capabilities to analyze planning outputs based become self-serving. Don’t investment to chase shiny
on collaborative workflow using “what-if analysis.” objects. Instead, focus on defining core capabilities. In
the process, make sure there is clarity on process re-
3. Private Equity Investments in Supply Chain Soft- definition. Doing the same old process, but only faster
ware: Increasingly, private equity investments in soft- could be the greatest risk of all.
ware from PE firms like Blackstone GroupBX +2.5%,
Insight Partners, and Thoma Bravo are milking cash Conclusion
from customer contracts, saddling technology compa-
In the review of supply chain strategy documents by
nies with debt, while slowing R&D investment, and manufacturers and thought leadership content by con-
slashing workforces. For strategic IT investments get
sultants this quarter, I find these risk management el-
involved at a board level to protect these assets. Never
ements missing and concerning. I hope that this article
believe press release claims that accompany these
helps you and your company to think more holistic and
acquisitions. be more resilient in 2023. Buckle your seatbelt, I ex-
pect turbulent times ahead.
4. Chasing Shiny Objects: Today, 48% of companies

9