Category Archives: Generation Procurement

Closing the Procurement Talent Gap, One GPO at a Time

How do you recruit and retain top talent in procurement? You need to go beyond what’s possible for any one person and leverage the power of communities and technology.

talent gap
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If you ask a classroom of children what they want to be when they grow up, you may get answers like “astronaut,” “football player,” “doctor,” or “ballerina,” but it’s rare you’ll hear “procurement professional.” 

Let’s face it, procurement and indirect sourcing are not exactly sexy areas, at least not from the eyes of an outsider. There are few people who know exactly how much value procurement generates for a business and want to invest further in the organisation.

From strategic sourcing and supplier risk management, to contract negotiations and risk mitigation, procurement plays an essential role in any large business.

Talent Shortages Threaten Procurement’s Function

Despite this incredibly important function that procurement fulfils, consultancy firm KPMG reports that the procurement talent shortage is real and only getting worse. Though it might be enlightening to dive into the question of why such a shortage exists, the reality is that it does and this is impacting businesses today.

Ultimately, we need to figure out how to work around it. 

If hiring more procurement professionals is not an option, one obvious procurement strategy for growth is to scale your existing procurement team’s reach as much as possible given the limited resources. There are several ways to do this, from outsourcing work to procurement consulting firms to implementing supplier consolidation strategies.

As an example, Group Purchasing Organisations, also known as GPOs, are gaining popularity as a way to increase the impact of procurement without adding headcount. 

GPOs Are Low-Cost, Low-Effort Alternatives to Adding Headcount

A GPO is an organisation built to leverage the purchasing power of several businesses to take advantage of high-volume discounts from suppliers. The idea being that utilising the collective buying power of its members creates benefits for both vendors who can grow their business and buying organisations that want to get better deals.

In consumer terms, this strategic buying is like purchasing at Costco or a similar bulk discount store. 

GPOs are a great way to centralise procurement functions and scale the impact that procurement can create without the headache of reorganising departments within a company. They allow companies to prevent spend leakage, get better terms and discounting, and outsource the risk and time associated with contract negotiation, not to mention the time saved when employees no longer have to run RFPs for all good and services.

Members of GPOs report significant savings of up to 25, 30, or even 40 per cent of their previously best-negotiated pricing agreements. 

Becoming a GPO Member May Even Help with Recruiting

An added bonus and secondary reason to add a GPO membership to your procurement solutions strategy is that it can help you attract new procurement talent. When potential candidates learn the business is a member, it tells them that cost savings, strategic buying, and risk management are high priorities for your business. A

t a bare minimum, this helps inspire confidence in the business because company leaders are prioritising ways to protect the company and better manage its spend.

It also tells a potential employee that when they come to work in your procurement organisation, they won’t be stuck in the dark ages hunting down RFPs or the latest version of a contract.

Ultimately, an investment in a GPO gives your business a competitive advantage over similar companies looking to hire that may not have considered procurement innovation a priority. And if procurement experts are in such short supply, this could be a serious leg-up. 

The Future of Talent in Procurement Is Uncharted

Even if you don’t opt to go with a group purchasing organisation, there are several ways to make your procurement organisation more attractive to potential new recruits. Investing in new procurement technology, professional training initiatives, innovative recruitment marketing, and more are all ways you can up the business’ desirability as a career driver for future candidates. 

That said, GPOs are a highly manageable and attractive way to both drive savings and efficiency in the short term while signalling to candidates in the longer term that procurement is a priority.

If you’re looking for an efficient and practical way to get the most out of every dollar while scaling your procurement organisation, a GPO is definitely worth a second look. 

Could Group Purchasing Organisations be Procurement’s Endgame?

Procurement’s fight for strategic recognition could be seen as a fight for its very survival. Could it be time to assemble around a collective idea before the endgame starts?

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Have you heard the one about procurement being outsourced as a function? Where organisations finally tired of not getting the value they need and hand over the reins to an external third-party to run the show? If that sounded like the lead in to a joke, it wasn’t intended as one.

Procurement needs to face up to the reality that if it can’t add value as it promises, then organisations may choose another route for the function. But where there is adversity, there are heroes to stand up. And with Group Purchasing Organisations (GPOs), these heroes are closer than you think!

Outsourcing Procurement

At the turn of the decade there was an increasing number of organisations picking this as their procurement strategy. More recently, and famously, in 2015, PepsiCo took the decision to outsource its marketing procurement function to much fanfare and no small amount of worry for the global profession.

It’s hard to argue against the benefits of this approach too, with cost reduction, increased leverage for discounts and economies of scale just 3 from a wide list. But don’t polish your CVs to find new career just yet. What if there was a way to get the benefits above, but retain control on your procurement and even free up time to allow for more strategic input.

The Avengers and Procurement?

Let’s look at this through a lens the majority of people will be familiar with. The meteoric success of the Marvel Cinematic Universe is based around the ability to tell a variety of different, diverse stories, but then tie up all of these strands into one, larger story.

The collective vision is why the first film in the series, Iron Man (2008) took $585 million at the box office, while the latest, Avengers: Endgame (2019) has taken in $2.796 billion. And counting.

From a procurement point of view, this collective vision comes in the form of Group Purchasing Organisations (GPO). There are numerous similarities between the Avengers and GPOs (bear with me!), but here are the top 3:

1. Leadership

The Avengers is a collection of larger-than-life superheroes, all with their own agendas, quirks and egos. What allows them to be an effective force in the fight against evil is that they have great leadership. Step forward Steve Rogers, a.k.a. Captain America.

What makes “Cap” a born leader is that he sets aside his own feelings and agenda for the greater good. He makes sure that every member of the team has a voice, even down to the smallest or newest ones.

And that is one of the key aspects of a GPO. It enables every procurement organisation to have access to the network, facilitating benefits that wouldn’t have been possible on their own.  These benefits, such as cost optimisation and savings via economies of scale go on to a different sort of leadership – cost leadership.

2. The Power of the Collective

Individually the Avengers were all quite stellar.  As Tony Stark himself puts it in The Avengers (2012), “a demi-god; a super-soldier, a living legend who actually lives up to the legend, a man with breathtaking anger-management issues, a couple of master assassins”, not forgetting Iron Man himself.

Individually, they were heroes, but none of them strong enough to defeat a larger enemy. Only by working together, and in Endgame having a second shot at it, did they possess sufficient power to be victorious.

A GPO ties together the varied procurement strategies of its member organisations, increasing the buying power of the collective.  The centralised procurement would provide great benefits without giving up any of the control.

3. Data & Analysis

Where would the Avengers be without the technology of Stark Industries, the nation of Wakanda or the power of Hulk? Just as important is the data provided by SHIELD and analysis that they rely on for running missions, frequently broken down for them by Vision.

A GPO has access to all the data that a procurement organisation would require for strategic buying, in the form of procurement solutions. Analytics organisations, like Sourcing Insights, provide all the back up required for successful sourcing, while ensuring that everything is managed against real-time, accurate data.

Procurement – Assemble!

It might not be the most obvious of matches, but there’s no doubt that for many organisations this could be a huge win. Far from ceding control of their procurement, they can pass over the transactional and highly resource-intensive aspects to someone else, meaning their procurement team can be strategic, like SHIELD.

So maybe it’s time for us all to embrace our inner superhero and take a step towards a collective vision of the future. Who knows, we might all together be able to save our great profession before the Endgame arrives!

If you would like to learn more about the super benefits of Group Purchasing Organisations and how they could assist with your savings agenda, please visit UNA.com today!

Three Reasons I’m Excited About Blockchain

Blockchain – is it the answer to procurement and supply chain’s prayers?  Or is it over hyped, another ‘technological innovation’ that promises much and delivers little?

blockchain
Photo by Mert Guller on Unsplash

I must admit I was leaning towards the pessimistic camp – when were those great use cases really going to happen?  I signed up for the Procurious webinar to find out more about how this new technology is impacting supply chains – and what I learned was very exciting:

Blockchain Lets You Focus on What Is Important

One of the pieces of work we all wish would disappear from the day job is the time-consuming process of supplier onboarding. 

Webinar guest IBM Sterling’s Shari Diaz told us about a blockchain-enabled onboarding process that would “give the procurement professional all that time back”. 

Describing immutable records that the supplier would update themselves and third-party validation of accreditation, Shari encouraged us to think of a world where master data management had transferred from the buyer to the supplier.

Imagine what you could do if you didn’t have to worry about more mundane tasks within your role and could instead give more focus and energy to strategic projects!

A New Way of Measuring Value

One way that Professor Olinga Ta’eed is taking forward the development of a blockchain is through the not for profit Transnational Transaction Procurement Foundation.  Since its launch earlier in 2019 the TPP foundation has grown to over 165,000 members, impressive numbers! 

Olinga set out the goals of the TPP as being practical – to “fathom out” use cases like how we can capture and report things like intangible assets using blockchain to give a broader picture of an organisation’s true value.  

Olinga thinks this new reporting will be liberating for procurement professionals allowing a more strategic focus to the role. 

How much more value could we demonstrate if we could capture and record it?

A Re-Alignment of Values for the 21st Century

Both webinar guests thought that the greatest potential for blockchain will be the ability to articulate the alignment of values.  As we move into a world where values are becoming more important, blockchain is going to provide the traceability and trackability that consumers demand. 

As Shari observed “there’s a huge trend for supply chain to be able to demonstrate their values and consumers are starting to speak with their dollar”.

Shari also stressed that blockchain can enable our eco systems to work together.  “Enterprises [typically] depend on partners for 65 per cent of the value they deliver to their customers.  The more collaborative and connected we are – the more efficient and effective we’re going to be”.

So, blockchain technology is ready to give us time back, new ways of measuring value and for our values to be realigned. 

Our webinar guests have given procurement and supply cause to remain optimistic and in fact licence to dare to dream big.

I’ll leave the last words to Professor Ta’eed,

“Blockchain will light up the path for procurement to align with mankind – making procurement and supply chain the single greatest instrument to change the world”.

A recording of the Procurious-IBM Webinar – Blockchain Supply Chain’s 21st Century Truthsayer – with panel members Shari Diaz, IBM Sterling, Professor Olinga Ta’eed and host Tania Seary, Procurious is available here

Want to be Number One? Put Employee Wellbeing First

A happy workforce is a productive one. That’s why more and more organisations are taking account of employee wellbeing in their business travel activities.

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Recently, a term that has been trending among procurement professionals is ‘employee wellbeing’. It refers not only to the physical and mental health of your workforce but also to the idea that a happy workforce will be a more productive one and this is nowhere more evident than in the business travel industry.

When it comes to sending your team on the road, there are so many factors to consider, from speed and efficiency to cost effectiveness and reliability. Now we can add employee wellbeing to the list, and arguably it should be up there at the top. Evidence is emerging that the welfare of your team can impact performance and the growth of your entire operation.

Business travel, especially international, can offer exciting opportunities for personal career growth, as well as a chance to experience new cultures, foods, people and environments. On the flip side, frequent international travel can also be highly stressful and physically demanding with the need to adjust to changing climates and time zones. Putting work needs before personal needs is a common habit of many frequent work fliers. Yet, everyone knows that a well-rested employee is better able to give their all and achieve great results.

There are a number of steps that travel managers can take to ensure the health and happiness of the team. Here are some effective strategies for improving the wellbeing of your team and, in turn, benefitting your business.

Integrating Employee Wellbeing

If you’re new to this, here are some tips on how to integrate wellbeing strategies into your business travel policy:

1. Ensure a stress-free ride:

Reliance on multiple transfers and public transportation in an unfamiliar location can lead to lost time through the confusion, lost connections and complex directions. This means that your employee is likely to arrive flustered, delayed and not in the best shape for work.  

You need to simplify the logistics, minimize stress and cut down on wait times. Find a provider that can offer both pre-book and on-demand options at home and abroad with a reliable service that can ensure rapid arrival times.

To achieve this you’ll be looking for a provider with a large fleet size, as this will enable it to guarantee availability, so long journeys aren’t made even longer.

2. Go with a service you know

Use brands you trust and have a relationship with. This way you and your employees know you are getting a reliable, secure service, which helps to create a relaxing travel experience.

Choose a provider that prioritizes fleet security, using vetted cars both locally and internationally, so that you can be absolutely certain that your employees are travelling in safety and your ‘duty of care’ obligations are being met.

3. Keep track of your team

Tracking tools can keep you informed of where your employees are, especially when they travel abroad. This allows you to guarantee their safety and make it possible to locate and assist them in case of travel disruptions, caused by political upheaval, extreme weather, or any other kind of emergency.

4. Take your foot off the gas

Add breathing room into the schedule. Just because, hypothetically, your employee could fit all six meetings into one day, spreading the work over two days will allow your team member to arrive to each meeting well, properly recharged, rested and prepared.

In addition, build in flexibility in the schedule gives employees time to see the sights, and decompress, enjoying a new city so they can get back on the job refreshed and reinvigorated.

5. Spread the word

Set travel policies in advance and then make sure they are well advertised.  Employees are frequently unaware of their options, particularly with foreign travel.

For example, in an unfamiliar environment, employees may use an unvetted cab service, if they are not aware of partnerships with local providers. Or if they become unwell while abroad, they may be unaware of insurance coverage. This could result in them trying to hold out until they get home with regard to a medical issue that would be better dealt with immediately.

The performance and the personal wellbeing of your employees are tightly interwoven. Being at their best is what allows your team to give their best. To achieve this goal, companies need to ensure a friction-free travel experience for their employees.

To perform at their peak, they need to be able to relax between meetings and at the end of the workday. By partnering with a reliable, pre-approved service your company can meet its duty of care anywhere in the world.

Learn more on how to make your employees’ travel experience healthier, happier and more productive here.

Bridging the Cultural Gap – A Case in Point

Having an understanding of Cultural Intelligence in one thing. Knowing where and when to apply it is a different thing altogether.

Photo by Wojtek Witkowski on Unsplash

Over the last few months we have discussed the idea of what Cultural Intelligence (CQ) is, the 4 key components that comprise CQ and how they are can be utilised in the workplace to assist us to work more effectively across distance, culture and time.

From here I will describe some case studies so that you are better able to grasp some of the issues that can arise when working across culture. Then I will explore ways to reduce tension and miscommunication.

Recognising the Cultural Differences

Recently I was with an Australian organisation that has a global presence. As their business grows and matures in the international market, it is becoming increasingly important for them to adopt a more culturally agile approach. During the discussion an incident was raised that did not have the desired impact.

Due to the growing awareness around mental health and the increasing rate of suicide in Australia, a dedicated day called “R U Ok Day” is held on September 12 every year to focus on mental health. The idea of having this day is to encourage people to ask others how they are feeling, if there are issues to share, so that they feel supported and not isolated.

It is recognised in Australia as an important step towards reducing suicide and developing a strong and supportive network for those that may be struggling with mental health.

This organisation extended the recognition of the “R U OK Day” event to it’s international offices, thinking it would be a powerful, well received and progressive gesture.

Despite the good intentions held by the organisation in promoting these values of openness and support, the organisation received a lot of resistance particularly from offices in the Asian countries. The pushback from the Asian offices occurred because, while the organisation acted with the best intentions they did not foresee the impact of those intentions.  

The organisation failed to take into consideration how this kind of discussion might be received in different cultures. In many Asian cultures, discussing mental health or experiencing mental health issues is very taboo.

Admitting you have problems is a source of shame in these cultures so understandably this initiative caused unease and tensions for the offices. The offices felt that this had been forced upon them and it was anything but well received.

Avoiding Cultural Tension

How then can we avoid a situation like this in our own workplaces?

Some points for consideration are:

  • Be Conscious:

Be aware of our own biases – this means being mindful that the way in which you view a behaviour, practice or topic may not be the same as some one from a different culture. Culture is effectively the lens through which you view the world, so it is important that whenever you are working across culture you consider how your actions, attitudes and behaviours will be received.

At the same time, how do you attempt to understand the “other” point of view?

  • Ask Questions:

When introducing new initiatives, it is imperative to ask questions and receive feedback so you are able to gauge the response before putting things into place. Listening to the perspective of those in a different culture will broaden your perspective especially with new initiatives.

  • Be Adaptive:

If an initiative is introduced and not so well received in a different cultural context, then it becomes necessary to consider how to adapt, adopt or modify this so that it can be more easily accepted by the cultural group involved.

These types of situations require the utilisation of all of the components of Cultural Intelligence that we have previously discussed – Drive, Knowledge, Strategy and Action. By incorporating these elements into our cross cultural interactions we are in a better position to maintain and strengthen our relationships, which will lead to better outcomes.

What Literature and Film Teaches us about Savings

The theme of money is a very common one in the world of books and film. So what can our favourite fictional characters teach us about increasing our savings?

From Pixabay on Pexels

It’s not too much of a stretch to suggest that procurement can learn a lot about saving from literary and film characters. Money is a common central theme in so many novels and movies and so it shouldn’t come as a surprise that there is a multitude of good and bad examples of how organisations can manage their money. 

One of the many options available to organisations is to look for external assistance in the form of procurement consulting. To tie in with the idea of drawing inspiration from a network of sources, one particular strategy would be to use a Group Purchasing Organisation (GPO). A GPO draws uses the collective purchasing power of its members to achieve greater discounts and lower prices from suppliers. 

The benefits don’t stop there. A GPO can apply various procurement strategies and actually increase organisational savings year-on-year. It’s about selecting the right strategy or strategies. And this is where our movie and book characters come in.

Strategic Buying and Mr. Micawber

Wilkins Micawber is a primary character in the Charles Dickens novel, David Copperfield. The character has begat the ‘Micawber Principle’, which simply and eloquently states that if annual expenditure exceeds annual income, then the result is ‘misery’. Though he seems to be better at offering this advice than taking it himself, this shows a good example of strategic buying.

In spite of some criticism faced, GPOs don’t encourage greater spending or higher volume of purchasing – this is a myth! They do, however, utilise the greater buying power of the collective over the individual to provide lower prices for members. And then, in addition, keep these prices lower in the long-term by leveraging higher volumes and pre-negotiated contracts. 

Definitely no misery here if the strategic buying is carried out effectively, as this will result in continued savings for the organisation.

Monty Brewster and Centralised Procurement 

If you haven’t seen the 1985 comedy classic, ‘Brewster’s Millions’, then finish reading this first and then go and find it on whichever TV/film/streaming service you use! In the book and film, the titular Brewster must spend $30 million in 30 days in order to inherit $300 million. And there are a couple of catches: 

  1. if he fails to spend the full amount he is left with nothing; and 
  2. he cannot tell anyone the reason for his spending spree.

Let’s set aside for a moment that this is every procurement professional’s nightmare end user – off doing their own thing without communicating anything. 

One of Brewster’s main issues in spending the money is his well-meaning friend, Spike. While Brewster is off throwing money away, Spike is making shrewd investments and actually earning more. It’s the very definition of decentralised procurement.

A GPO helps to build centralised procurement in the organisation and in its network of members. Communication is key and demand management strategies are developed by procurement in conjunction with end users, reducing excess usage. This is all supported by GPOs providing metrics and benchmarks from the network for all members to use. 

This again helps keeps the price down in the longer term and reduces the likelihood of an end user going on a Brewster-style spending spree!

Procurement Software and Nick Leeson

They say the best stories start with the kernel of truth. Well this one is based on a true story which helps to highlight the benefits of procurement software in both traceability and compliance. Ewan MacGregor plays real-life ‘Rogue Trader’, Nick Leeson, whose attempts to save and recoup money caused one of the biggest scandals in banking history.

Without trivialising the situation, or making light of what was a very damaging time for a large number of people, the film and real-life story highlight why organisations, and procurement within them, need high quality procurement software to track and manage spend. The concept of ‘you can’t save what you can’t see’, as well as ensuring that spend is compliant rather than non-contract or maverick, links heavily to the savings agenda.

Companies like Sourcing Insights provide world-class software and analytics which enable procurement to track and visualise data in real-time and see where future issues may lie. You may not have a Rogue Trader in your midst, but with the application of the right software you’ll have greater control on your spend which will help to deliver savings year after year. 

Managing your Money

There’s an idea in procurement that to get the best from spending, professionals need to spend the money like it’s their own. But how about you engage some procurement consulting and get them to manage your money like it was their own?

Whether you are a Micawber or a Brewster, you can access the best knowledge and software, knowing that your money is safe in their hands. After all, it would be nice to be able to point to this success the next time your CFO asks “show me the money”!

From savings and pre-negotiated agreements, to spend analytics and collective buying power, GPOs provide a wealth of benefits to procurement organisations. Find out more by visiting UNA.com now.

Creating a Procurement Video to Make Your Mum Proud!

Photo by Donald Tong from Pexels

This article was written for Procurious by Sievo. Find out more about them here.

Have you ever had a hard time explaining what you do to friends or family? Do you love your job but get the sense other people find it boring?

We all know sales drives growth, marketing builds brands and the buck stops with finance. Why is it so difficult to explain the excitement and value procurement brings to the table?

According to Wikipedia, procurement is “the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement generally involves making buying decisions under conditions of scarcity.”

Yeah, I know! It sounds boring. Compare it to what we came up with to describe procurement analytics. And we promise you, this is NOT just another boring video about procurement.

Time for a Re-Brand

So why did we break the procurement as we know it and create that simple-fun video? We all know that procurement is often introduced in a boring way – it’s no Sales or Marketing.

But if Sales and Marketing can brand themselves well, why can’t procurement? Why is it that when think-ing about sales, people think of smiling businessmen in suits making deals on lunch dates that increase the company’s revenue, and when thinking of procurement it’s something….well…different.

At Sievo we do procurement analytics. It’s arguably the nerdiest, geekiest, most jargon-filled area of procurement. Analytics is tough to explain on its own. But analytics combined with procurement? I’m not going to even put the definition of that here.

But don’t worry – the fact that procurement is boring is not your fault!

You can choose who and what to blame – the fact that procurement professionals are focusing on savings instead of branding or the lack of knowledge about the subject – but one thing is true: procurement has a branding problem.

Our Procurement Video – Sharing the Excitement

A while back we were looking at YouTube videos about procurement to have some inspiration for future projects. Turned out, we weren’t very inspired at all after watching all of the long and technical videos. In fact, we got a bit worried when wondering what our moms would say if they decided to look into what we do for a living.

We decided we had to do something. Anything. We found that there was a clear demand for an interesting and fun video about procurement. Like the one the sales function has where Leonardo DiCaprio shows how to sell a pen. If for no-one else than to finally explain to our partners and mothers what it really is that we do in a way that they wouldn’t fall asleep halfway.

The thing is, procurement and procurement analytics are actually quite exciting. You should know. Sure, it’s not smiling people out on launch dates all the time, but dang it, procurement is an important function. It’s a function that should be portrayed in the exciting way it deserves.

This subject of changing the way we talk about procurement seemed to be close to the hearts of many since there has been an abundance of comments in response to the video.

Check some of those out:

“Definitely going to show this to my family to let them know what I do at work all day!”

Naavie

“Very cool – this video shows importance of procurement analytics to CPOs, cate-gory managers, compliance officers who look for sustainability in procurement process and even legal department!”

Alexandra Shtromberg

“Shared to my network, great vid… procurement analytics, simply explained and fun to watch… ”

Laura Garcia-Hornell

“Interesting and fun video, really liked it. I am all in for procurement analytics because on the best case it helps to support better decisions which lead to better negotiations… ”

Phil Kowalski

Want more? Read here 14 of some of the most creative definitions of procurement analytics by the ex-perts. Who knew procurement analytics could be explained with Tequila, an Indian wedding, and digging up gold?

Comment what you think about our approach and let us know how YOU would rebrand procurement!

Is Artificial Intelligence Destroying Your Job?

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.

By Leremy / Shutterstock

On 11 February this year, President Trump signed an executive order directing US government agencies to prioritise investments in Artificial Intelligence (AI) research and development. There isn’t any detail on how the AI Leadership executive order will be paid for, but as a statement of intent right from the top, it’s pretty powerful.  So, is this something you need to worry about?  Will robots be taking your job next Tuesday?  Probably not, but the answer is not as reassuring as it sounds.

When we think of AI, we probably think of Skynet (the evil computer that hunts humans in the Terminator films) or the similar tricked-up calculator that is the meanie in the Matrix films.  But real AI is a little more mundane.  It is more likely to be making sure your car headlights are on when you need them (and not on when you don’t), sending a nuisance spam call to your voice-mail or suggesting the next thing to watch on Netflix.  AI is the catchall term for software that can solve problems based on rules rather than a linear set of fixed instructions.  Really advanced AI can modify the rules based on how things turned out the last time or patterns that it detects in the environment.

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.  In recent decades we have seen this kind of automation steadily eat away at assembly line jobs as increasingly AI driven robots replace workers performing limited and repetitive functions.  A robot can sort big apples from small oranges more efficiently than a human and it never needs to take a break (or be paid). 

As the technology advances, it’s starting to creep into areas we might have thought of as immune from automation.  Medical diagnosis is increasingly the target for deep learning AI, the kind that recognises patterns and makes predictions based on those patterns.  During their career a doctor might see a few thousand x-rays or MRI images and get better at noticing patterns.  But AI software can review every x-ray ever made before the doctor has finished her morning coffee. 

A recent study, for example, compared the diagnostic precision of AI software with that of teams of specialist doctors from all over China.  The AI software was 87 per cent accurate in diagnosing brain tumours in 15 minutes.  The doctors could only diagnose 67 per cent and needed twice as much time to do it.  The AI increased precision and saved time because it was able to learn from a much larger base of experience than any individual doctor or team of doctors ever could. It uses like this that are why AI is predicted to add $15 trillion to the global economy by 2030.

President Trump joined the 18 other countries that have announced AI strategies since March 2017, because he wants the US to be a leader in AI rather than a follower.  And it is why investment in AI based startups jumped 72 per cent to almost $10 billion in 2018 alone.  

And even though some analysts are predicting 1.8 million jobs will be lost to AI in 2019 alone, those same analysts are predicting that the AI industry will create 2.3 million jobs in the same timeframe.  You can’t buy buggy whips now because the industry that created them was destroyed by Henry Ford, but there are many more jobs in the automobile industry he created than there ever were in the one he killed.

When analysts from McKinsey looked at the employment impact of AI in five sectors last year, they concluded that jobs which use basic cognitive skills, such as data input, manipulation and processing will likely decline, while demand for higher cognitive, social and emotional, and advanced technological skills should grow, as will the number of jobs that require customer and staff interaction and management.

If your job could be classified as administrative support then the future does not look bright.  And even if it requires you to do years of training so you can manipulate or recognise patterns in data, like those Chinese doctors, a financial analyst or a military strategist then AI will be coming to a workstation near you within the foreseeable future.  Humans are still a little too messy and unpredictable for the average AI bot.  So, if your job needs you to interact with humans and please them, such as in direct sales, management or counselling, then you are probably safe, for now.  And of course, if you are writing the programs that drive the AI then your career is assured.

AI is rapidly changing the face of the modern workplace.  And while nothing much will change by the end of the year, by the end of the decade, most jobs will be unrecognisable.  You’ve been warned. It’s time to transform yourself from a data geek to a people-person, before your computer takes your job.

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

AI and Procurement: Boldly Going Where No Team Has Gone Before?

The battle of “human vs. machine” is raging in Hollywood and, increasingly, in the workplace. What does the future hold for AI?

By Willrow Hood / Shutterstock

2001: a space odyssey… Terminator… The Matrix…

If you were to believe some of the sci-fi blockbusters, you’d think our future as humans is pretty bleak. They all offer a dystopian view of the future where, if the machines don’t kill us, they enslave us.

The battle of “human vs. machine” also seems to be raging outside of Hollywood, and we humans seems to be losing more and more ground to machines each year. Some of this ground has been lost in the world of gaming. Over the past decade, machines have been beating us at increasingly complex games more and more often. Looking back at these “wins” for the machines, we can see some key stages in the evolution of Artificial Intelligence (AI):

•    Deep Blue won against Kasparov at chess in 1997. It was rather dumb but powerful. With brute-force & human-created logic, Deep Blue was able to test and evaluate every possible sequence of moves at every turn and choose the best one.

•    Watson defeated Jeopardy champion, Ken Jennings, in 2011 and was smarter than Deep Blue. It had to understand natural language and find the relevant knowledge from various sources like encyclopedias, dictionaries, thesauri, newswire articles and literary works.

•    Google’s Alpha Go won against Go’s world champion Less Sedol in 2016. To achieve this result, it had to learn from humans from thousands of past games. This is because, unlike chess, which has a limited number of moves, Go is one of the most complex board games in the world, with more possible moves than the number of atoms in the universe. The second generation of Alpha Go learned by itself by playing against itself millions of times to discover what works and what does not.

•    Libratus beat four expert players of Texas Hold ‘Em poker. It also learned by itself and was able to understand behavior because poker is a game of luck, deception, and bluffing!

While very impressive, these victories also show that machines are still dumb when compared to everything that people can do. Machines excel at one thing and have the intelligence of a two-year-old or less for everything else.

What we can learn from sci-fi movies and the battles being waged on the gaming front, is that AI has many faces:

Today, despite all the hype and buzz, computers are still only at the narrow intelligence level. But even at this level, the potential applications of AI are endless.

As far as Procurement is concerned, the same applies: machines are far from being able to replace Procurement teams. Instead, new technologies have another purpose: augment people to achieve better outcomes.  This is a definite shift from the last waves of technologies, which were mostly focused on automation and staff reduction.

Machines in procurement get a promotion: from admins to colleagues and consultants

AI, in short, is all about learning from data to develop new insights and using this new knowledge to make better decisions. It is also about continuous learning and improvement. AI is a master of the “Kaizen” philosophy! This makes it a precious ally for Procurement and AI should therefore be considered as a team member within the broader Procurement ecosystem. Experience shows that “people + machines” get better results than people alone or machines alone.

Of course, in Procurement and in general, it is undeniable and unavoidable that AI will impact the future of work and the future of jobs. Work will continue to exist, despite potentially significant job displacements. While some jobs may disappear, new ones will come to take their place, and most will be transformed by the imperative of cooperation with smarter machines. Procurement jobs will also be impacted and future procurement professionals will require a new set of skills. For example, data analysis and modeling will become a core competency next to more traditional business and relationship management skills. This is because the “data analyst” component in activities will grow due to the collaboration with AI in order to:

•    Train AI and ensure that data is relevant, complete, and unbiased

•    Monitor outputs (recommendations, actions, insights, etc.) of the AI system to ensure relevance, quality, take more contextual / soft aspects into account, and safeguard against AI shortcomings.

Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.

To conclude on a more positive and optimistic note than where this article started, I have taken inspiration from another sci-fi classic.  I believe that the future lies in a new type of cooperation between humans and machine.

The duo Dr. Spock and Captain Kirk illustrates, to some extent, how such cooperation is possible and can offer the best of both worlds. By combining Captain Kirk’s instinct and emotional intelligence with Spock’s logic and reasoning skills, they were able to successfully tackle any challenge they encountered.

New developments like explainable AI (XAI) and “caring AI” will make machines of the future even more human and will allow them to take an even more active role in our personal and professional lives. AI will continue to augment us, not replace (or kill or enslave) us.

So, Procurement people, live long and prosper!

Voicemails Are Dead So Why Do We Use Them?

Why do we all have a voicemail system and why do people continue to leave them? Abby Vige discusses instant gratification

By Aniwhite/ Shutterstock 

When we’re stuck in the work grind and we see our phone light up with news from beyond our present moment, our spirits buoy a little! Yay! Then we drop when we realise it’s just a voicemail. It’s almost as bad as when you think have a text but it’s just spam from your telecommunications provider. Sigh.

Confession

I have to admit that I never clear voicemails, some people even state in their voicemail greeting that they do not clear them, so why do we all have a voicemail system and why do people continue to leave them?

Voicemails date back to the late seventies when a chap patented his unique “Voice Message Exchange” and sold the electronic message system to 3M. Since this master stroke of genius, we have never looked back. When voicemails were invented they made sense, there were no emails and faxes were yet to reach their peak. But do they make sense as a business or connection tool in this modern era?

A message from beyond

The reason I don’t tend to clear my voicemails, is because as soon as someone leaves one the news instantly old. Or, there is very little information that warrants the effort of clearing them all and then phoning each individual back “hey, Susan from accounts here, phone me back” why should I?

Enter the experiment phase…

After having this question kick around my head for awhile, I decided to scratch the itch of my curiosity and prove what I thought to be true. I listened to every voicemail across 2-3 days and phoned each person back, the top results were:

  • They had already emailed me the query and was surprised I was phoning them
  • The issue at hand had substantively evolved
  • They had found out the answer themselves

The motivation for them to leave the voicemail had initial merit, but in some instances, just minutes later the situation had changed. My stark conclusion was that most of the conversations were in effect, a waste of time.

Now, I don’t want to be seen as a VM hater, Procurement is a customer centric, customer service industry. But this is not the way I add value to my customers or to my organisation. Voicemails fall in to a “reactive” space for me and I’m much more of a pro-active gal. I love to be accessible to my customers, but you’ll often find me at their desks in person because face to face conversations are worth it.

What’s driving Susan?

The experiment was interesting and somewhat validating but the question remains, why do we feel the need to leave the dreaded VM in the first place? Most people assume that it’s because email as a written form, takes longer to write out verses simply phoning the person and requesting that they phone you back. It’s also generally accepted that voicemails enable us to convey emotions and urgency.

But what is really driving us is more of a simpler basic human need, the need for instant gratification. The term itself is self-explanatory but it in this context what is driving us is our self-centric view of the world. Even though we know it makes sense to write an email and include more information and leave it for when the person is available to digest it, we forgo these long-term benefits in favour of short term benefits that resolve something in our world, we feel better.

This is subject that has piqued curiosity for many years and found its roots in pop culture through the 1960’s infamous “Marshmallow experiment”. This was a major psychological study conducted by Stanford Professor Walter Mischel where children between 4 and 5 years old were given the choice of having one marshmallow to eat right away or they could wait for the researcher to come back and they would get two. The results of watching the kids wait has been the subject of many a video and even adverts.

How this plays out at work

The desire for short term gratification is often exasperated by the pressures of a work environment where the sense of needing to get things done and done quickly rules supreme. What underpins the need for instant gratification? The need for the issue to be passed on, to be received – ultimately to be heard.

We eat the marshmallow over and over, we can’t wait, we can’t help ourselves. Those of us that don’t leave voicemails most likely transfer the gratification to other media or medium. Even your neat and pretty to do list or post it note system fits the short term satisfaction bill.

The biggest insight gained from the experiments was the link proven between delaying gratification and being successful in life. Those 4 and 5 year olds from the 1960’s that waited for the second marshmallow, had higher academic scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures.

What we can learn

If we train ourselves to be less reactive and to delay those hard wired gratification urges, we can increase our productivity in focused and targeted areas. Ultimately raising our value to the organisations we work for, whether that is a company or working for yourself.

Take the challenge….

  1. Don’t leave voicemails
  2. Pay attention to your inner world, before you take action, think about what is driving that action
  3. Start small and repeat that small action each day
  4. Keep visual reminders about your top priorities
  5. Keep yourself accountable