Prof. Jack van der Veen is professor of Supply Chain Management at Nyenrode Business University, with a particular focus on collaboration in the chain. He set aside 1.5 hours of his time to tell Yellowstar his thoughts on the subject. This is part 1: "You can calculate all kinds of things in a business case, but it always starts with vision."

Do you have doubts about the value of a business case?

"The context within which firms have to operate is changing at breakneck speed. Who could have imagined a year ago that we would now be in the middle of a war in Ukraine? Never mind understanding the implications of that. You won’t find that in a business case. Nor will you find a pandemic like the coronavirus. In short, who knows what the world will look like in five years’ time? Of course, you can perform scenario analyses that will tell you something about the future. But the idea that you need a business case for a strategic decision like which IT system to choose is a bit of a cop out. With my training as an econometrician, I can calculate a positive outcome for you just like that – it all depends what you put into it. Often it's about 'how to ly with mathematics'."

So how should one go about it?

"To me, the focus should be much more on strategic factors. If the future cannot be predicted – as is increasingly the case – a company has to work from a strategic vision. What do you want to achieve as an organisation, what do you stand for, how do you want to differentiate yourself, which supply chain partners do you work with, what customer values do you strive for... So for example, don’t start using blockchain just because it’s available, do it because you have a clear idea of how you can benefit from it. Rather than a business case, I am talking about a strategic business model. So does the investment in a particular IT system fit with that vision, yes or no?"

Do you actually see that happening around you?

“What I see, unfortunately, is a dearth of strategic thinking within many organisations. They aren’t thinking about a strategic vision at all but instead are operating primarily in the short term – let’s just survive the next crisis first. And just look at the government. As the Dutch puts it, "vision is an elephant in the room obstructing the view". That approach is all very well for a time, but sooner or later the problems all hit you at once."         

What is the significance of digitisation in all this?

"First of all, digitisation is a tool, not a strategy. That said, digitisation has massive benefits. By collecting and combining data, you can optimise your operation, making you work more cost-effective. At the same time, digitisation creates transparency, which makes a company agile. In what we would nowadays term a VUCA environment (volatility, uncertainty, complexity, ambiguity), that is becoming increasingly important. Being able to combine flexibility and lower costs thanks to digitisation is truly a breakthrough. In the past, you couldn't be flexible and cheaper at the same time – flexibility was more expensive by definition. Digitisation has changed all that. Again, the point is that as a company, you need to know what you want to achieve. Do you want to be agile and cheaper? Or do you have very different plans? "Start with the end in mind”, Stephen Covey used to say. Which customer values are you pursuing? Too often, I see companies buying software packages without having considered their strategy."

So what is the crux for you?

"Logistics is sometimes called the art of smart organisation. I think ‘art’ is a great description, because art is something you can’t express in numbers. In my opinion, that's not what it's about; it's about a company's vision, its strategy. Of course, you need to perform calculations and collect as much data as possible. But as a company, don't blindly follow a business case riddled with uncertainties. I was a numbers man myself, but I no longer regard maths as the be all and end all. You definitely need to keep doing the sums, it's just that the outcome is not necessarily the truth."