Tag Archives: AI

Transactional Supply Chain Activities: Your Days Are Numbered

The days of transactional activities in supply chain management are numbered and look set to exit our organisations very rapidly…

Chris Crozier, Chief Digital Officer – Orica International has seen first-hand how the perception of supply chain management has changed over the years.

As little as thirty years ago he can remember there being “very little recognition [of the profession] and the nuances around the skillsets required. In fact, most people talked about the smartest people in the room being in marketing and I saw that there was plenty of opportunity around skillset affirmation around supply chain.”

On Day Three of Career Boot Camp we speak to Chris about the evolution of the supply chain management profession, the importance of embracing new technology and implementing digital transformation.

Supply chain management across company borders

As someone whose, very impressive, career has criss-crossed several industries, Chris is a keen advocate for supply chain professionals working across functions.

“Supply chain is such a beautiful function where you do get that end to end view of an organisation,” he explains.  “We need to make sure that we leverage that and the relationships we have with other functions [including] any career opportunities  – not just for ourselves but for our teams.”

He warns against leaders becoming too defensive of their supply chain talent; “I think that’s a real blind spot in some of the supply chain functions as they stand today. So share the talent and surround yourself with highly capable people but be prepared to move them in and out of supply chain.”

In seizing any opportunities to move talent in and out of teams supply chain pros are facilitating the creation of “a really virtuous cycle of understanding” and ensuring that there are “supply chain evangelists in other functions.”

Indeed, working in both tech and supply chain has proved to be the perfect balance for Chris, “one of the things you get from working in supply chain is a broad analysis and encompassing oversight of the organisation and I think that’s what technology also requires. So there was a lovely fit between the technology understanding that was necessary in a CIO role and that broad business perspective you get from [working in] supply chain.

“Having that very broad business understanding meant I could provide that bridge between business requirements and a technology outcome.” 

The impact of technology on supply chain  

As is the case with every single function in every single organisation, supply chain professionals will be significantly disrupted as a result of incoming technologies.

And Chris, a self-proclaimed advocate and evangelist for the technologies coming through his door believes it is imperative for supply chain professionals to have a decent understanding of the latest technology in order to be successful in the long term.

Professionals need to know “how to apply it, where to apply it, how to leverage it most effectively and, most importantly, what’s coming in in the future that can help you to be even better in your role and therefore have a more productive organisation and ultimately underpin the broader company that you work for.”

Chris believes that the days of transactional activities in supply chain are numbered and will exit the organisation very rapidly, which is, of course, bad news for the supply chain professionals who are doing these transactional activities! “We will move to the world of the seamless end-to-end supply chain, which we were talking about in 1998-1999! We were all talking at that stage about real-time supply and demand activity.”

And Chris believes we’re fast approaching that point today with “the compute power that we have available, the network capacity we have available and the technology we have available.”

“People will talk about blockchain and other technologies and, yes, that’s all part and parcel of the way forward. But ultimately supply chain professionals now need to continue to go up the value curve.

“A lot of the things we do around competitor intelligence, around negotiation strategy and so on will be superceded by the technologies coming through the door.”

“Those things are just going to become endemic as tools for professionals in supply chain so we need to be on top of that, prepared for that and able to leverage that because it’s going to hit us very soon.”

Chris Crozier is speaking on Day Three of Career Boot Camp 2018. Sign up here (it’s free) to listen to his podcast now.

The Making of a Supply Chain Leader

What are the key skills  supply chain professionals should be developing in an AI-enabled future?

Ekaterina_Minaeva / Shutterstock

“I’m a great believer in great passion,” says Ron Castro, Vice President, IBM Supply Chain. And it’s just as well given that Ron is responsible for all strategy, execution, and transformation of IBM’s US$70Bn global end-to-end supply chain, delivering to clients across more than 170 countries.

“Always be as bold and as fast as you can,” he says. “I’ve never looked back in a transformation and thought ‘Darn it! I wish I had gone slower.’ There’s always room to be bolder and to go faster.”

On Day Two of Career Boot Camp, Ron speaks to us about the greatest challenges and complexities of his role, the importance of leadership, and the key skills that supply chain professionals should be developing in an AI-enabled future.

Building a cognitive supply chain

“We’re at a point when new technologies are truly enabling us to take advantage of all kinds of data and giving us actionable insights close to real time,” Ron says.

“In our case, it all started several years ago when we built our transparent supply chain across [all] processes and systems, which gave us an excellent platform to apply advanced analytics and manage our business by exceptions. We set a very clear goal to become the first cognitive supply chain. This is based on our strong belief that with machine and human interaction we can truly augment supply chain professionals’ daily decision-making,” he says.

Ron points to several emerging technologies that provide incredible opportunity – AI (Watson, in IBM’s case), machine learning, blockchain, the Internet of Things, virtual reality, and 3D printing.

“Humans and machines always get a better answer than machine alone or human alone. With that principal we’re training Watson with our best supply chain experts [and] letting it observe our decision-making in digital resolution rooms,” Ron says. “Watson is learning in real time with us so it can help us to identify risks, predict issues and, as a trusted advisor, suggest our best course of action. How were similar problems tackled in the past? What are the risks or alternatives? Who should be involved or advise us on what actions we should be taking to manage the situation better and faster?”

“As we map the future of our supply chain it is crystal clear that we are getting the most value of our capabilities as we start to stack technologies together,” he says.

The challenge that’s keeping supply chain leaders up at night

“I have the pleasure of leading one of the most talented supply chain teams in the world,” Ron says. “I really love the adrenaline and all the variables that you need to be able to optimise it and the challenge of ensuring the right balance between demand and supply while [delivering] the highest quality and [focusing] on managing revenue cost.

“We are sensing and responding fast in the most intelligent way to any changes in the supply and demand equation, whether it be the introduction of new products, reacting to a natural disaster, geopolitical issues or supplier constraints,” he says.

But Ron also acknowledges that the tech industry is changing by the minute.

“[T]he challenge that keeps me up at night is are we transforming, are we moving fast enough and, more importantly, are we giving our team the tools they need to be successful?” he asks. “At the end of the day [are we building] an organisational culture that’s primed to leverage new technologies, unleash innovation, and challenge the status quo? Do we truly have the skills for the future?”

The making of a supply chain leader

 Ron always sees the need for strong leaders. “Some of the fundamentals [of leadership] don’t change; passion, perseverance, global and holistic thinking, collaboration and the value of diversity, [and] building a culture of feedback and continuous improvement,” he says.

Ron believes all these factors, indicative of a high-performance culture, will become even more critical in an AI-enabled future.

“We need leaders that take risks and drive a clear vision around digital supply chain and the need to be innovators; leaders that value experimentation over perfection [and] are willing to try new things and correct fast as needed,” he says.

Ron believes that leaders need a deep understanding of technology and where the trends are heading.“Disruptions are coming and they will hit us faster than ever so the ability to react becomes essential,” he says.

Ron advises aspiring supply chain professionals to take a step back and ensure that they are holistic, global, and horizontal thinkers. He encourages them to embrace new ways of working and collaborating with one another in order to become agile thinkers.

“In this new world the basics of supply chain are still critical so you can optimise a supply chain holistically from an end-to-end perspective. But you also need to be technically savvy,” he says. “The machine-human interaction will continue to increase and all these technologies will continue to become even more critical in supply chain.”

Data scientists will also be highly valuable, Ron says, as the ability to gather insights and ask the right questions will become critical for supply chain professionals.

Ron Castro is speaking on Day Two of Career Boot Camp 2018. Sign up here (it’s free) to listen to his podcast now.

Teeing Up For AI in Procurement: It’s All About One Thing…

The benefit of AI for procurement is clear – the question, then, is what will it take to effectively put it to use?

Over the last year, machine learning and artificial intelligence (AI) technologies have graduated from the class of “emerging tech” – they’re here now, they’re increasingly sophisticated, and their adoption will only continue to accelerate.

We’ve seen machine learning and AI go mainstream in consumer tech environments, and they are rapidly shifting from hype to reality in enterprise environments as well; however, enterprise executives are still working to understand how AI applications can move beyond specific product features to influence broader business functions and strategies.

Let’s take a look at the procurement department, for instance. Procurement and purchasing professionals have a lot to gain from leveraging AI. In fact, AI has the potential to completely transform how organisations manage their spend, from automating invoice coding based on learned criteria, to predicting potentially fraudulent transactions, and preventing rogue spending before it happens.

The benefit of AI for procurement is clear – the question, then, is what will it take to effectively put it to use?

Gartner’s report, “Start Preparing Now for the Impact of AI on Procurement,” states that “technologies’ need for data will force application leaders in procurement to ensure access to the necessary internal and external data sources.”

Essentially, the first step to getting predictions out of AI is to capture all data – internal data, external data and third-party, public data. Furthermore, procurement professionals should be asking themselves if they have the volume, the quality and the completeness of data needed to leverage AI within their department.

Ticking each of these boxes can feel like an arduous process, but a good starting point is to hone in on three particular sources of data that provide the greatest visibility into spend:

1. Supplier Data: This means capturing data from 100 per cent of suppliers in the procurement system. Not just the largest multi-national suppliers who use sophisticated EDI or XML formats, but the whole tail. This should include mid-tier suppliers that may be using online portals or emailing PDF invoices, all the way down to the smallest “mom and pop” businesses, who continue sending paper invoices. Using an open commerce network that accepts and supports all invoice formats and requires no changes on the supplier’s end enables 100 per cent supplier onboarding and captures all transactional data. To gain true visibility and power future platforms, procurement and finance leaders must aggregate as much financial data as possible beginning with supplier data.

2. User-Driven Data: The ability to capture user-driven data–specifically, buying insights that track 100 per cent of all purchasing requests that run through the system, is vital. Visibility into employee spend ultimately depends on how user-centric procurement tools, technologies, and processes are designed. The bottom line is: procurement systems shouldn’t be designed for the procurement department. They should be catered to potentially thousands of employees around the world that are buying things in their organisation.

Searching for orders, dynamic routing and approvals, and guided buying, for instance, should be easy to navigate and fit seamlessly into the way employees already work. The key is to create a system that users adhere to not because they have to, but because it’s the easiest way to get what they want from preferred vendors at the negotiated price, providing another layer of spend visibility.

3. Invoice Data. By nature, the accounts payable function is primed for intelligent automation. There is a huge opportunity to use AI for things like improving processing efficiencies and reducing costs, increasing discounts and eliminating late payment fees, for instance.

But, these enhancements can only be achieved if the invoice data feeding into AI is complete. That means procurement needs to capture 100 per cent of invoices, irrespective of format (paper, PDF, electronic) and irrespective of invoice type (PO-based, non-PO based, invoices for direct spend, for indirect spend, for facilities and utilities, etc) –  truly, any and all. Whatever the invoice, it should be captured.

These three particular sources of data can truly position a company to take advantage of all the benefits AI promises just over the horizon. Elements of machine learning, AI and predictive analytics already exist within procurement today. Forecasting budgets for approvers, alternative cost-effective suggestions during a user’s shopping experience and intelligently aggregating POs based on purchase trends are just a few commonplace applications. But to take advantage of any of these applications, and future opportunities to gain a competitive advantage, data is an absolute prerequisite. Only when armed with data – especially from suppliers, users and invoices – can procurement make the most of their investment in AI technology, enhance spend visibility and optimisation, and ultimately, boost the organisation’s bottom line.

Continue reading Teeing Up For AI in Procurement: It’s All About One Thing…

How to Prepare Your Organisation for the Cognitive Revolution

Everyone procurement team is talking about AI, cognitive technology and machine learning. But for these technologies to work at their best, your business needs to be prepared… 

Image: Zapp2Photo / Shutterstock

There is a lot of talk these days about Artificial Intelligence, Cognitive Sourcing, Machine Learning, and data-driven procurement.

Almost every major procurement organisation in the world talks about how their organisation uses these tools to make decisions.

The direction of procurement is almost certainly towards data-driven decision-making.  This is a reality we all need to embrace.

I certainly subscribe to the notion that the best procurement decisions come from fact-based data-driven strategies and I firmly believe that over time, cognitive tools and technologies will become better and more effective than they are Today.

The truth is that we are not there yet.

As someone who’s industry is in the cross-hairs of cognitive technologies, I have been exposed to more than a few examples of how this technology works.

The category knowledge that these tools will draw from to generate their insights currently resides with guys and gals like me.  As such, we (the subject matter experts and category leaders) of the procurement space hold a special and specific set of keys that unlock these technologies.  It is with that focus that I would like to proceed.

In order for these technologies to work best there are certain fundamental elements that must be right in order for the tool to generate the best insights.

Good Data

Well organised and structured data is an essential foundation for cognitive technologies.

When it comes to any form of data analytics, the old adage “garbage in, garbage out” still holds .  Unfortunately, the vast majority of organisations simply have poor data.

Before you can point any cognitive tools at your data set, the data needs to be scrubbed and normalised.  This is still done manually by a team of people.  I’m sure one day this will be 100 per cent automated and perhaps technology will find a way to avoid these errors in the first place.  The fact is that whenever we receive data Today, it is highly flawed and requires weeks of work to make it usable.

Here is a good primer on data collections.

Be sure you allow sufficient time for your data to be cleansed before you deploy your cognitive tools.

Define your Benchmarks

The greatest value that AI and cognitive will bring is being able to benchmark your organisation in ways never before possible.

In a recent article I wrote on how to use bench-marking to develop cost estimates, but cost estimating is not the extent of how you can use bench-marking with AI.

Consider the value of bench-marking your organization against a competitor’s current performance.  Cognitive tools allow you to bring in publicly available information in real time.

Imagine that you are an electronics manufacturer and your closest rival releases their financial report.  Cognitive tools can seek out these reports and extract data from them to benchmark against your performance.  You can also combine cognitive tools with web crawlers that seek out competitor’s pricing information.  Without cognitive tools, this kind of information would require weeks or months of manually collecting data.  Cognitive tools allow this kind of analysis to be done instantly.

To take advantage of AI, take time to consider all the different ways you can measure your performance and see if you can come up with a few you never thought possible before.

Market Indices

All goods and services are affected by market forces. Staying on top of market indices is important for making strategy decisions.

An effective cognitive data strategy uses data from market indices.  Market Indices will enrich your own data and allow you to forecast into the future.  Adding this level of depth to your cognitive platform will reveal the actionable insights that cognitive data promises.

The Bureau of Labor Statistics is great resource for all kinds of indices.  If you are in construction, there are a number of private organizations that publish various indices to help forecast the future.  Look at the AIA, Dodge, and AGCjust to name a few.

Add market indices to your data set to enrich your analytics and strategise with forecasting.

Category Expertise

Cognitive technologies offer beautiful data outputs rich in data and content, on their own these outputs are just eye-candy.  The interpretation of that data and content must be made by skilled experienced subject matter experts.

Eventually we may get to the point where computers can read the data and a clear strategy will be automatically spit-out for anyone to act on.  Even then, how you act on the data will require some expertise.  Until such time, you must have your cognitive data interpreted by a human with category expertise.

It’s too easy for data to be misinterpreted and for an organisation to run-off in the wrong direction.  Even the most advanced Artificial Intelligence we have Today is unable to interpret the various human factors that go into strategy making and for that reason, Subject Matter Experts (SME’s) are still required.

Be sure you know that the person who will receive and interpret your data has the skills needed to execute a sound strategy.  After all the time and energy you invest in cognitive tools, you need to be sure your direction is sound.

Closing

The future of AI and cognitive is bright.  We are heading in a great new direction where information will rule.  Today there are a few trail-blazers paving the way for us all.  Those using these new technologies Today are sure to be better prepared Tomorrow as they find new and creative ways of using data to guide their business decisions.


This article was originally published on Luis Gile’s website. Check out more of his content here. 

Sign up for next week’s webinar: Clean Up Your Act! Category Management AI-Style. 

Can Category Management Clean Up Its Act, AI- Style?!

In a post-AI world, the cards are up in the air and everything is up for grabs. Can category management help the procurement profession to scrub-up and embrace these changes?

Our webinar,  Clean Up Your Act! Category Management AI-Style is available on Procurious now. Listen here

How are large corporations managing and recruiting their workforce in the age of the gig economy?

Can cognitive tech help marketers connect the dots and better understand their customers?

Will we require architects in the future to design our buildings, or can we ask bots do that for us instead?

AI and cognitive technology will impact all corners of the business whether it’s construction, labour or marketing. For procurement’s category managers, technological advancement provides the chance to reinvigorate the profession and develop innovative ways of working.

But there is also a legitimate fear of the major disruption AI brings. Which services and industries will we lose entirely? How many roles will be made redundant?

The cards are up in the air and procurement prosperity is there for the taking. Can category managers help the profession to scrub up and seize this opportunity?

This month, we’ve enlisted the help of three category management experts to advise you on how to clean up your act and get the most out of AI!

Last month we hosted a webinar – Clean Up Your Act! Category Management AI-Style – in partnership with IBM.

With a focus on construction, labour and marketing, we discussed:

  • What common problems have category managers faced in old-world procurement, pre-AI?
  • How is AI impacting these categories; what sort of disruption can procurement professionals expect?
  • How can AI help procurement professionals in construction design, build and maintain their projects?
  • How can AI assist procurement professionals working in labour to attract, recruit and retain talent?
  • How can AI help procurement professionals working in marketing to strategise, create and manage optimal marketing campaigns?

Who is speaking on the webinar?

  • Tania Seary, Founder – Procurious
  • Luis Dario Gile, Global Category Leader (Design Construction and Real Estate) – IBM

Help! I can’t make it to the live-stream

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask a question?

If you’d like to ask one of our speakers a question please submit it via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Our webinar,  Clean Up Your Act! Category Management AI-Style is available on Procurious now. Listen here

4 Reasons Why Your Organisation Isn’t Embracing Cognitive

In the battle for capital, how does procurement ensure its cognitive projects come out on top?

At last month’s London CPO roundtable; Amit Sharma, Global Procurement Practice Leader for Cognitive Process Services (CPS) –IBM led our attendees in a discussion on how procurement leaders can ensure their cognitive projects come out on top.

There is so much potential in cognitive technology to transform the role of procurement. It will allow professionals to do dynamic forecasting, telling you when to raise acquisition and awards contracts to a particular supplier based on a triage.

“For procurement, maintaining our relevance to the organisation beyond cost savings is imperative” said Amit.  “[Procurement pros] need to embed the latest in technology as best practise into the business as it will free up our time and help us to move from transactional to strategic management.”

“The logic is unquestionable.  We know the sophistication of AI is going to come. It’s a question of when, not if.”

But when it comes to making the leap to cognitive, which can do a world of good for analytical and predictive analysis, organisations are still hesitant.

Procurement needs to make the business case for how cognitive can add long-term value and, as Amit reminded us, “If you’re not convinced, you can’t convince someone else”

Throughout our discussion, four key reasons for an organisation’s reluctance to embrace cognitive tech became apparent.

1. Remaining skepticism at the value of cognitive

As Amit explained, cognitive technology like Watson can help procurement professionals to analyse reams of data. It would, for example, allow users to plot the price at which they are being charged for something by suppliers and analyse how the index has moved in past [x] years. Five years ago this process would have been extremely time consuming but with the index data, the system can quickly tell you exactly where you’ve been overcharged.

So it all sounds great. But in reality, business leaders are often skeptical about the actual cost savings brought about by this kind of analysis.

Do you genuinely make better decisions in the long term by having so much data at your fingertips? Or can you have just as much success through effective negotiations with your suppliers?

Amit’s response to this “If you’re not doing spend compliance – you don’t know if you’re compliant. If you’re not analysing this data, you don’t know the potential cost savings.”

“I spoke to a CPO who thought their processes were good. [But it was discovered that] there was a 40 per cent unit price difference across the company in the same category, simply because the left hand doesn’t know what the right hand is doing!”

2.  Spend within organisations is fragmented

One key problem for procurement, when it comes to implementing cognitive technology, is that the CPO doesn’t always have the authority to drive transformation. Perhaps they are reporting to a CFO who doesn’t see value in cognitive tech or the spend might simply be too fragmented across the business. When it depends on lots of other people, procurement are unable to drive change effectively.

As one of our roundtable attendees pointed out “there are organisations I know who can’t justify the need to implement Ariba to their CFO- let alone cognitive technology!”

3. Trouble looking at the bigger picture

Several of our roundtable attendees cited short-termism as a key reason for their organisation’s lack of cognitive adoption. “The mistake we make is that we look at opps in a tactical way and not at the bigger picture,” said one CPO.

“For example, we know that there will be headcount reduction in the coming years and we will benefit hugely from cognitive tech, but articulating that at a hollistic level to the CFO and explaining it as a 5-year journey is the challenge”

4. Confusion about AI

Remarkably, one of the biggest challenges remaining around  the uptake of cognitive technology is a universal lack of understanding of what it actually is and the distinctions between different terms.

“You can start talking to a group about AI and within a few minutes people are talking about blockchain, as if the two are interchangeable,” said one of our attendees. “People need to have a clearer understanding of the buzzwords ; AI, blockchain cognitive etc.”

Of course, there are people who know a little and people who know a lot. And that’s a challenge in itself.

Read more here on the insightful discussions had at our London CPO roundtable. 

Driving Change The Procurement Way

At yesterday’s London CPO Roundtable we explored how procurement teams can drive big change in their organisations whether it’s through Brexit policy, implementing cognitive technology or smart hiring…

When was the last time you took a wild punt in your hiring process?

Is your procurement team under more pressure than ever to cut costs?

How can CPOs make the business case for cognitive technology to their CFO?

Will there be a second EU Referendum?

These are just some of the questions we discussed when we gathered a dozen procurement leaders in London yesterday for a CPO roundtable sponsored by IBM.

We discussed the implications of Brexit and how procurement professionals are preparing, how procurement can make sure its cognitive projects come out on top in the battle for capital and  why employers need to be far more open minded when hiring new talent.

Surviving the Perfect Storm

Nick Ford, Co-founder – Odesma gave us an overview of his organisation’s latest Brexit survey; Surviving a Perfect Storm.

Many would argue that Brexit is the biggest negotiation to ever  take place in UK, but the path ahead is still very unclear. And that’s presenting some major challenges for procurement teams.

Indeed, 45 per cent of Odesma’s survey respondents (300+ procurement executives primarily from the UK/EU ) admitted that Brexit was hampering their procurement strategy and 82 per cent claim that they have felt under more pressure to reduce costs for third party good and services.

Nick highlighted some of the changes procurement departments are attempting to implement in order to prepare for life post-Brexit:

  • Contingency Planning – including managing an mitigating risk, moving supply chain out of Europe etc. : 27 per cent
  • Investigating new suppliers:  9 per cent
  • Re-negotiating contracts with existing suppliers: 9 per cent
  • Reviewing country location for procurement operation: 6 per cent
  • Re-evaluating inbound supply chain: 6 per cent 
  • No changes to supplier base: 15 per cent

On a positive note, 73 per cent of procurement professionals believe their organisation sees procurement as an important part of its post-Brexit preparation process. As Nick highlighted, it is a fantastic opportunity for re-negotiation of supplier contracts, a chance to do a thorough supplier clean- up or develop new suppliers entirely and it gives your organisation a competitive advantage if your procurement team is in good shape – given that only 40 per cent of businesses have  started putting plans in place to prepare for brexit.

Read more from Nick Ford on how procurement can prepare for a post-Brexit world.  

The Battle For Capital

In the battle for capital, how does procurement ensure its cognitive projects come out on top?

Amit Sharma, Global Procurement Practice Leader for Cognitive Process Services (CPS) -IBM addressed how difficult it is for procurement leaders to communicate the need for, and value of, cognitive technology to their business.

“The problem for procurement” he argued “is that the CPO doesn’t always have the authority to drive transformation. It depend on lots of other people and that stops them from driving change.”

“For procurement, maintaining our relevance to the organisation beyond cost savings is imperative. [procurement pros] need to embed the latest in technology as best practise into the business as it will free up our time and help us to move from transactional to strategic management.”

The logic is unquestionable.  We know the sophistication of AI is going to come. It’s a question of when, not if. But when it comes to making the leap to cognitive, which can do a world of good for analytical and predictive analysis, organisations are still hesitant.

The CPOs in attendance were in agreement; citing short-termism, lack of buy-in from the CFO and a limited understanding in the business about cognitive technology.

Procurement needs to make the business case for how cognitive can add long-term value and, as Amit reminded us, “If you’re not convinced, you can’t convince someone else”

Brexit: What Happens Now?

Professor Anand Menon, Professor of European Politics and Foreign Affairs, Kings College led a session discussing the long-term causes of Brexit and their future implications.

“Hand on heart I don’t know [what’ going to happen] – if i could answer that I’d be rich and famous!”

It’s the most uncertain moment in British politics since World War Two and what’s striking is that,  two years on from the referendum, nothing has been decided.

A key reason for such uncertainty  is the nature of the referendum itself.  As Anand explained, the referendum packaged so many different options and outcomes  into a binary choice; leave or remain.  No one understood quite what they were signing up for and since the results Brexit has largely been defined by whichever adjective most aptly applies to specific people or groups; black brexit; white brexit; hard brexit; soft brexit; white red and blue brexit… the list goes on.

Does the UK want to establish a relationship with the EU like Norway, like North Korea or will they define something wholly new.

Anand admits that due to the Brexit process being so complex and all-consuming, there is no avoiding a messy process. What goes on throughout the next couple of years will largely be determined by politics.

  1. Theresa May

The UK Prime Minister relatively quickly defined what she meant by Brexit (leave cutoms market,end free movement etc) and her position has remained relatively unchanged since. Whilst she is unpopular with many in her party, it is unlikely her critics will choose to get rid of her yet. As long as she in place, she is a powerful force for stability.

2. The Conservative Government

There is a significant number of Tory MPs who want a much softer Brexit than the Prime Minister is proposing so it’s possible they will vote against May’s Brexit deal. However, if May loses this vote there is no question that she has to go; after all, her whole mission as Prime Minister is Brexit. If that happens, the Conservative Party will either elect a new leader or the UK will face a new general election. And the one thing no Tories want is another general election.

3. The Labour Government 

In the last general election, Labour picked up votes from both remainers and leavers. As such, the party have been careful to keep their Brexit policies ambiguous. Whenever Corbyn speaks about Brexit, he speaks in ambiguities.

Ultimately the real danger for the UK’s economy, Anand warns, is that the negotiations go pear shaped, the UK crashes out of the EU in March 2019 and they end up with no wiggle room to extend the UK’s transition period.

His advice to procurement organisations trying to prepare? Plan for a World Trade Organisation outcome from 2021 – “That, I think, is the most likely outcome.”

The Drive Project

The Drive Project is an award-winning, creative social enterprise. They work alongside charities and businesses to inspire and empower people with creative projects, training and talks. We were joined by one of their speakers Darren Swift (“Swifty”).

On 25th May 1991 Swifty was injured by a terrorist attack that resulted in him losing both his legs above the knee.

Within seconds of being hit by an IRA coffee jar bomb he went, he jokes, from being 6 foot 2 to 4 foot 6; his left leg completely gone and his right hanging on by a thread.

During his extensive rehab, when he was forced to confront his new reality, Swifty made the decision to not let his injury affect his life or career going forward.

Since then Swifty has gone on to achieve a huge amount including taking up skydiving, becoming the first ever double above knee amputee snowboarder and taking up a career as an actor. Swifty’s unique and inspiring story reminded us that employers need to be far more open minded when hiring new talent.

When it comes to hiring our organisations need to be ‘blinkers off’ people; asking ‘why not?’, rather than having a ‘you can’t’ attitude. You don’t know what’s possible with a potential hire until you take a punt and give them a chance.

Without this outlook employers could miss an extraordinary talent.

As Emily Shaw, Director- The Drive Project,  pointed out “[We should] give people a chance not to be a victim – because they can achieve so much more.”

Find out more about The Drive Project and the amazing work they do here. 

“Wat the?” 5 things I learnt about Watson Supply Chain in Vegas

Rather than adopting the “what happens in Vegas, stays in Vegas” mantra, I wanted to share some new insights into Watson that I gleaned at IBM’s mega thought leadership event – Think 2018.

1. Watson needs education – but it’s a fast learner!

When you think of Watson, you probably think of a computer that can win Jeopardy and has a PhD in a whole lot of things…but in reality, when Watson enters a new profession, it is like a child that needs to learn.

As humans, we learn from birth and can only pass on that knowledge to someone who in turn spends time learning.  AI, like Watson, is similar. It learns by gathering information (i.e. data) and interacting with humans.

You could liken Watson Supply Chain today to a  5th-grader, but its rate of growth is so exponential that it will have a Master’s Degree in Supply Chain within the next three months.

How? Because IBM’s own supply chain practitioners are training it daily by feeding their US$30Bn spend through Watson, pushing through millions of documents, data elements and hundreds of real life supply chain challenges that are resolved each day in the Watson Resolution room. Last year, Watson supported $71.7 billion in revenue, managed 150,000 contracts, and supported 20,000 professionals and 11,000 suppliers to ensure 5,000,000 deliveries were made.

With every insightful response and interaction, Watson is getting smarter. The more Watson is used, the more knowledgeable and insightful it becomes.

I first met Watson at the Gartner Supply Chain Executive conference in London last year. Catching up six months later at Think 2018 in Vegas… even I could see the growth.  Watson is now answering supply chain questions in natural language (plain English), and can curate what is most critical for you to pay attention to – alerting you to an impending disruption, immediately assessing the financial impact of the disruption and will help you drill down effectively to understanding what the issues are that you want your team to resolve, and quickly. Watson does this through opening a resolution room, quickly providing answers that typically reside in different system which reducing the time needed to write emails, make phone calls and follow-ups.

The team at IBM told me that their own implementation of Watson has seen disruption mitigation time reduced from days down to hours – or even minutes in some cases – which is critical when you’re moving inventory in the millions of dollars.

“Watson is brand new every day.  Every time you go away, it grows and becomes more interesting, because it is constantly learning.  You come into the office and there will be a new API. Watson doesn’t take a day off, it is adding knowledge and features 24/7/365.”

Watson Supply Chain Program Director, Rob Allan.

2. Watson Supply Chain is helping save lives

… literally. One of the first user test cases for Watson is a global philanthropic organisation working to improve vaccine distribution in Kenya. Local African pharmacies battle constant low stock of critical medical supplies due to lack of inventory and poor visibility across the supply chain.

It is still early days, but the IBM team is really motivated and engaged with this important humanitarian project. I caught up with IBM Watson Supply Chain’s Program Director Rob Allan, who was energised after a recent visit to Kenya. “It’s great to be putting Watson to work on such a worthwhile project. In Africa, it’s not uncommon for a mother to walk half a day to get medicines, with no guarantee that she will be able to secure what she needs. Our program will deliver vaccines and supplies to more than 4,000 delivery points in Africa. This should make a huge difference to access much needed healthcare. We really hope we can make an impact.”

3. The proof is in the pudding.

 Leading companies, like Lenovo, have started mapping their thinking supply chain journey with Watson…but the biggest proof of concept is IBM itself who has been using Watson to manage its multi-billion dollar global supply chain for the last 18 months.

We all know that necessity is the mother of invention and this was certainly the case for the creation of this product. You may not know that it was actually IBM’s internal supply chain team that created Watson Supply Chain Insights.

If you listen to this webinar, you will learn that IBM’s VP Supply Chain at that time, Joanne Wright, had an “aha” moment back in 2011. A series of unthinkable events prompted Joanne to look for a solution. The Japanese Tsunami had wiped out components globally, volcanic eruptions in Iceland disrupted Nordic freight lines and floods in Thailand destroyed disc drive head production.

Joanne’s team struggled to get the right data and she dreamt of a day where she could get a smartphone alert prioritising supply chain failures, present the relevant data and even suggest solutions.

It wasn’t perfect at first. The team had to find and clean the data and learned that you must train Watson … that can’t be underestimated. They consulted the Watson Health cancer team and understood how to train Watson to talk supply chain.

It would seem that it was worth the effort, as it helped IBM’s Supply Chain save millions in inventory and freight costs, not to mention IBM reduced their supply chain data retrieval times by 75% using Watson – and helped build the technology that will drive supply chain into Industry 4.0.

4. It’s not a big a deal as you think!

From everything I have learned in the last 12 months, implementing Watson Supply Chain may not be as onerous as you think. In terms of time to implement, from London, Raleigh to Vegas I have asked numerous executives and they’re all convinced that they can overlay Watson on existing clients’ systems and have a meaningful dashboard up and running within a month.

5. Blockchain … coming soon.

Having been a Queen B2B in the late 90’s, I have long known the value of having common language and data for taking friction out of business transactions. That’s why I’m excited about blockchain. There’s certainly been a lot of hype, and, of course, the bitcoin currency part is totally out of control… but the idea of having a common ledger or “one version of the truth” for all B2B transactions, with the ability for business partners to get in and view the same information, is very appealing.

Watch this space! IBM previewed a new, blockchain-based offering called “Shared Ledgers” at Think.

Taking the plunge…

There’s definitely been a lot of hype about Watson, but there are some real reasons to start your thinking supply chain journey, powered by AI.

In explaining why Lenovo took the plunge with Watson, Bobby Bernard said, “This space is evolving quickly.  We want to be an influencer about these new supply chain technologies.”

With most technology introductions, most organisations have been able to wait out the early adopters and jump on-board when the technology is mature and in widespread use.

But IBM is warning that this is not the case with AI. According to Watson Customer Engagement GM, Richard Hearn, “Everyday you’re not using AI is another day your competitor or upstart might be leveraging AI to learn, adapt and disrupt your market and you!”

Procurious Founder Tania Seary is an IBM Watson Customer Engagement Futurist and attended #think2018 as an #IBMPartner.

5 SOFT SKILLS PROCUREMENT PROS SHOULD BE DEVELOPING…NOW!

If you want to hold on to your procurement career  in the long term, you ought to be worrying about mastering your soft skills!

We got wind of the fact that IBM, arguably the world’s most robotically advanced procurement team,  is focussing on its employees’ soft skills.

As Justin Mcbryan, Learning & Development, Strategy, Communications Manager- IBM, explained,  why would IBM need a high volume of data scientists in their midst when they have Watson!?

Technological advancements will soon permit the automation of our processes; handling the sourcing and the market intelligence. In this environment, it’s the softer skills procurement professionals must master to ensure a long-term career.  That’s the real skills gap procurement should be worried about!

In this blog we outline the specific skills procurement pros should be mastering to prepare for the post-cognitive age, with the help of Justin and John Viner Smith, Principal-Mercer.

1. Design Thinking

There are some “incredible and transformative technologies that offer solutions to problems that were unimaginable just a few years ago ,but they’re just half of the puzzle.” begins John.

“Subject matter experts will have a role to play in framing  [these problems] in the most efficient way.”  It’s important that the solutions aren’t simply “sticking plasters but fundamental root cause fixes”.

This is a role for procurement’s best and brightest, and the skill needed to fulfil this role is Design Thinking; “the process of being at the forefront of bringing new technologies to bear on business problems.”

2. Thinking at the speed of digital!

Joh asserted that procurement must recognise that “thinking of digital solutions requires some understanding of new processes and ways of thinking.”

“Procurement people should be learning about methodologies like Google’s Design Sprint or Eric Ries’ concept of Intrapreneurship as defined in the Lean Startup that are used in other types of digital business.

“Too often procurement thinking is slow, bound in process and incredibly risk averse. Technology problem solving is experimental, iterative and views failures as key to learning. The idea of developing hypotheses, testing them, failing fast and iterating or pivoting in the course of a week, as per Google’s Sprint methods, would be alien to many Procurement people.”

Procurement has worked at a certain pace,  thus far. And it’s going to  have to get faster!

3. Active questioning and listening

This wouldn’t be a piece about soft skills without a mention of communication! We already know how important this skill is for procurement people but it’s going to be all the more valuable in a post-cognivite age.

Justin reminded us that communication is vital for everything “from presentation skills to phone etiquette and how to ask probing questions to your suppliers.”

In a post cognitive world you’re “going to become more of an owner and less of a process facilitator” asserts Justin, which is where active listening comes in.

When it comes to managing negotiations with suppliers, clients and colleagues, “We all have scripts e.g. How many widgets do you need, when do you need them by etc.”

“Every now  and then, you’ll have  been in a situation where a client has given a little bit more than you asked for. This is where the active [and critical] listening comes in.” How do you use that information to do the best job possible?

4. Negotiation

“We rely on the threat of competitive pressure to do our negotiating for us” says John.

“We source the spec and don’t always listen to challenges from Suppliers. When we’re engaging them to help solve complex problems, we will need to be more commercially empowered and highly skilled negotiators; able to get the best from our suppliers by offering the best of ourselves while optimising value.”

5. Imagination

“The future role of procurement can be solved in one phrase: problem solving” says John.

But procurement’s problem solving needs to take on a more innovative and imaginative approach.

“Not every situation is going to call for an RFX” explains Justin. “That speaks directly to the change we’re looking for [at IBM].” Too often “we see a need and our reaction from a process point is let’s go and do the RFX.”  Instead professionals “should take a deep breath and start understanding the client and exactly what they need,” and approach the problem in alternate ways.

John concedes, arguing that “running tender might be the solution (increasingly rarely!) but collaborative innovation with the suppliers we have is important.”

Procurement peoples’ jobs will largely focus on bringing innovation to the supply chain in the first place and really helping the business to understand their demand.

In short, Procurement needs to have a relationship with the organisation that is much more strategic and puts the function in a partnering and consultative role.  As Justin sums up, ‘ [at IBM] We’re still looking for the procurement experts, we’re still looking for people who can do the job. But we’re adding to the soft skills portfolio.”

This blog was first published in October 2017. 

How To Avoid Transaction Automation Landmines

When it comes to implementing transaction automation, managing the trade-off between the speed of execution and the granularity of data is a challenge…

NikoNomad/Shutterstock.com

There are many factors that require careful consideration to bring about effective cognitive solutions.

It’s akin to conducting a group of musicians – it might be possible (easy even!) to attain a pleasant sound from a solo instrument… 

But, if expertly managed,  you could accomplish a symphony from the entire orchestra! 

This week, our podcast series will guide you through the five steps required to conduct a dazzling cognitive symphony. 

On Day 3 of Conducting a Cognitive Symphony Anna Madarasz, Analytics & Cognitive Lead , IBM Global Procurement discusses the importance of appropriately applied transaction automation, striking a balance between speed of execution and granularity of data and how to avoid landmines.

The importance of transaction automation

Marco Romano, Procurement Chief Analytics Officer, Global Procurement, Transformation Technology, IBM discusses  taxonomy in his white paper, “Transaction automation is a business necessity.

“We all want to spend less time doing repetitive lower-value work and use our skills to provide higher-value services to the business. However, as with many good things, badly applied transaction automation results in poor data and ultimately lost productivity and analytics effectiveness down the road.”

Transaction automation landmines

Procurement organisations are usually very well intentioned when it comes to the implementation of transaction automation but that’s not to say the process is without its challenges. We asked Anna to describe some of the landmines she’s seen procurement professionals hit.

Catalogs or other automation processes that allow the editing of item description and price can make the life of the client and the buyers easier.

As companies  see the positive effect of this they are likely to have a higher percentage of their transactions and spend going through catalogs.

The risk with this, as Anna points out, is  setting yourself unrealistic targets, “there is always a logical threshold, over which it is a risk to apply automation. Of course, you will not implement a catalog line if you  only have two purchase orders of the same nature in a year.

“With wrongly defined targets, a catalog isn’t going to decide action and then, of course, you spend more time on creating and maintaining your catalogs than creating your purchase orders.

Bulk Purchases

Anna also advises avoiding the catalog lines that allow bulk purchases.

“Many times it is really not easy to identify the purchase in a fixed line. Let’s say you are buying server configurations [or] storage configurations. Those are made up of multiple parts, so you  have hardware, software and services elements in it.

“A configuration can be made up of 50, 100 lines. If you allow your clients and your buyers to raise purchase orders simply as a one line item, this server [could cost] one million US dollars!”

“Of course, it’s a really sensitive balance because you also want to avoid the workload of raising incredibly granular purchase orders, so it is really your call at what level you would like to analyse [a given category.]”

“If this is a category which is your main area of focus, then try to go granular, try to get the data. If it’s not, then it’s your call if you are allowing these bulk purchases.”

The trade off

“There is always going to be a trade-off between speed of execution and granularity of data” says Marco

“Finding the right balance again takes us back to developing an understanding of what data we need to achieve our desired cognitive and analytics state. There is no doubt that teaming with the right technology and innovation provider, and selecting the right tools, is critical to that balance”

Striving to conduct a cognitive symphony but in need of some expert guidance? Our podcast series runs throughout this week and will have your orchestrating cognitive success in no time! Register here.