'One handshake' tech initiatives hurting supply chain - EY

Organisations looking to digitally transform their operations are damagingly obsessed with a “single handshake” approach to the undertaking, one of EY’s top supply chain expert says.

In an exclusive interview with Supply Chain Digital, Sudhir Singh – EY’s UK&I Supply Chain & Operations Lead, says in today’s fast-paced digital landscape, companies need to adapt quickly to remain competitive.

Yet as businesses turn to digital transformation to achieve this, Singh says too many work with a single vendor to provide all their digital solutions.

This approach, he says, is limiting because it doesn’t allow for the flexibility and scalability that companies need to thrive in a digital age.

He urges companies to instead adopt an ecosystem approach, whereby they work with a set of specialist partners, each with their own area of expertise. 

Ecosystem approach best for transformation - EY

By embracing this approach Singh says firms can not only access a wider range of knowhow and technology but can also build a more resilient, adaptable and innovative digital environment.

He adds: “Companies should look for vendor ecosystem collaboration, and ensure they have scalable and flexible technology architecture in place so they can take full advantage of this approach.

“Too many companies still like working with a single vendor because this offers a single hand to shake, and means one supplier takes full responsibility, which gives clear accountability and more-manageable costs.

“Yet this ignores just how limiting working with one supplier can be for businesses undergoing digital transformation. It often leads to a reduction in the solutions, innovation, flexibility and scalability that an ecosystem approach provides.”

Singh also stresses that working with a single vendor makes it more challenging to address issues if a suitable solution is not found. Neither is it cost-effective, he points out – particularly if the vendor cannot handle large-scale projects or complex integrations.

Best-in-class supply tech partners

He continues: “Choosing to work with partners who are experts in their own areas allows businesses to get the most out of all the components needed to digitally transform their business.

“Working with best-in-class partners provides greater flexibility around solutions, rather than being limited to the offerings of a single vendor.

“It also allows for more scalability, as well as helping promote innovation and the ability to adapt to changing business needs.”

Plus, says Singh, a multiple-vendor transformations reduces the risk of vendor ‘lock-in’, where a company is dependent on one vendor for all its digital solutions with no flexibility to move to other vendors. 

“This can become a significant issue if a vendor’s quality of service declines or doesn’t meet the desired threshold,” says Singh. “It canleave a business stuck with a sub-par service and potentially hampering its transformation efforts.”

Supply chain transformation ‘a complex affair’

Business transformation is a complex and long-term process, Singh observes, adding that this is why many companies struggle to develop a clear roadmap on how to move forward.

He says: “Due to technological advancements, increased competition, changing customer expectations, complex regulations and a global talent shortage, transformation is more complicated than ever.

“Working with a range of partners can help organisations navigate complexities, as each supplier will bring their own unique set of skills and expertise to the table which businesses can tap into. Different partners may also have their own ideas and approaches that a single

supplier may not have thought of, which can help companies drive innovation and stay ahead of the curve.

“By working with a range of best-in-class partners, companies will be able to get the most out of their digital transformation, stay competitive.”