Tag Archives: AI

Could RPA Make Procurement Jobs More Human?

The new “hot” technology generating hype in 2019 is Robotic Process Automation (RPA). Here’s how it can help procurement…

By Viktor Gladkov / Shutterstock

Procurement is, by nature, in the business of relationships. Whether it’s managing suppliers or stakeholders, the success of any procurement organisation relies heavily on building relationships between people.

Despite this, many procurement professionals do not have the time to focus on the human side of their job. Data collection, reporting, transactional activities, urgencies, etc. are all tasks that eat up their precious time and prevent them from focusing on relationships that could generate more value and better outcomes.  This problem isn’t new and is the main driver behind the constant, growing interest in procurement technologies that automate processes and increase efficiencies.

What is new, though, is the pace of innovation and the hype around some of the latest technologies.

Emerging technologies have begun to dominate discussions in the procurement space, and it has become impossible to avoid debates, articles, publications, etc. on artificial intelligence (AI) or blockchain. The new “hot” technology that has been generating a lot of hype in 2019 is Robotic Process Automation (RPA).

Before jumping on the RPA bandwagon, it is critical to look beyond the features to understand the bigger picture. In the case of the latest RPA technology that has integrated AI, it is about making procurement jobs more human by offloading even more mundane, robotic tasks to… robots!

The goal is to augment, not replace, people by combining the best qualities and capabilities of both human and machine to achieve better outcomes.

RPA: Copy/paste on steroïds…

“[RPA is] a preconfigured software instance that uses business rules and predefined activity choreography to complete the autonomous execution of a combination of processes, activities, transactions, and tasks in one or more unrelated software systems to deliver a result or service with human exception management.”

Source: IEEE Guide for Terms and Concepts in Intelligent Process Automation (whose purpose is to provide standard definitions of concepts, capabilities, terms, technology, types, etc. for emerging process technologies)

This technical definition of what RPA is and how it works can be summed up with a simple analogy. Imagine that you have to repeatedly copy data from one Excel file to another to produce a monthly report. One way to eliminate these mundane, low-value, tedious tasks would be to create a macro that would do all the copy/paste for you. In addition to saving hours of your precious time over the course of the year, it would also reduce the risk of errors. This is, essentially, a simplified definition of what RPA is about. It’s a way to automate repetitive and scripted actions that are usually performed manually by users (not just copy/paste!). It is a form of business process automation.

The typical benefits of RPA are:

  • efficiencies to free-up resources usually spent on manual tasks and re-focus them on core business (efficiency fuels effectiveness)
  • better consistency and compliance in data entries by reducing errors
  • from a system/IT perspective, RPA is a valuable workaround to break data silos. It avoids the costs (investment, change mgmt.) and risks associated with replacing an existing system or creating interfaces. RPA solutions sit on top of the existing infrastructure and simply simulate user actions to take data from system ‘A’ and put it in system ‘B’.

RPA has limitations and it is important to be aware of them and consider if the trade-offs are worth it. Some of them are:

  • RPA can do one thing and only one thing. If there are changes in the source or in the destination systems, then it will stop to work correctly
  • It requires extensive programming to ensure that the RPA solution takes all cases into account. If not, it will not work or, even worse, it will create even more issues as it is very consistent in executing rules. If something is off, the same error(s) will be consistently repeated
  • For the same reason, it is vital to ensure that processes are running well before implementing RPA

If RPA only Had a Brain…

There’s no getting around it: RPA is a very dumb technology.  It does exactly what it’s told, blindly executing whatever set of rules it’s given. Such technology has been in use for years but on a limited scale. However, with the advancement of other, smarter technologies opening up new opportunities to make RPA more useful and less “dumb,” it is experiencing a revival. AI is one of the emerging technologies revitalising RPA, and stirring up hype. These days, it’s rare to see RPA without an AI component, which has also lead to a lot of confusion between RPA and AI.

“[AI is] the combination of cognitive automation, machine learning (ML), reasoning, hypothesis generation and analysis, natural language processing and intentional algorithm mutation producing insights and analytics at or above human capability.”

Source: IEEE

By nature, RPA and AI are very different technologies:

Because most business processes require a combination of “DO” and “THINK,” newer generations of RPA solutions integrate AI components to:

  • Understand input via natural language processing, data extracting and mining, etc.
  • Learn from mistakes and exceptions
  • Develop/enrich rules based on experience

It is this new, smarter generation of “RPA+AI” solutions that has broader applications as a valuable tool for Procurement.

RPA Applications for Procurement

“It is not the type of business process that makes for a good candidate for RPA, but rather the characteristics of the process, such as the need for data extraction, enrichment and validation.”

The Hackett Group on Procurious

RPA is particularly well-suited for operational and transactional Procurement because these areas are characteriSed by countless manual activities. Here are some examples:

  • Automation & elimination of mundane tasks
    • Invoice processing: It is possible to drastically reduce efforts and cycle times to extract essential information from an invoice and perform an m-way match by using a combination of RPA and AI (Optical Character Recognition + Natural Language Processing)
    • RFx preparation: Tasks related to data collection (quantities from ERPs, specifications from PLMs or other file sharing systems, etc.) and even the drafting of RFXs can be streamlined by using RPA.
  • Data compliance and quality
    • Supplier onboarding: RPA can automatically get more supplier data or data needed to verify registrations or certifications by crawling the web or other data sources.
    • Data mappings and deduplication: RPA can be a great support in Master data Management (MDM) by normalizing data (typos, formatting, etc.) and by ensuring that naming/typing conventions are respected.
  • Support to gain better insights
    • Supplier scorecarding: This is an activity that requires thorough data collection. RPA can be leveraged to collect data from various sources and integrate the information into one system either for internal purposes and/or for the preparation of a negotiation or business review
    • Contract analysis: RPA can crawl file sharing systems, network disks, and even emails to collect and gather contracts in one central location. Then, it can extract key terms and store them as metadata in a contract management solution.

Conclusion

RPA, in combination with other technologies, is an efficient way to connect silos (from a data perspective) to win back valuable time and remove the “robot” work from the desk of procurement teams so they can focus on the human side of their job.

On top of that, procurement organisations can gain tremendous insights from implementing RPA because it can make new data digitally accessible and more visible.

However, it is important to keep in mind that RPA is only a workaround; it does not break silos like an end-to-end procurement platform would do.

Streamlining Your Supply Chain With AI

How can AI help supply chain professionals streamline their processes and improve visibility?

By Chakarin Wattanamongkol / Shutterstock

Did you ever manage to find out what happened when one of your shipping containers went missing? Are you able to recover your products in time?

Many global companies are struggling with this in an ever-changing, digitised world where there is an increasing demand for transparency and visibility. Consumer satisfaction is being tested by speed of delivery, and as a result, accuracy in your supply chain is essential. Supply chain professionals must find ways to deconstruct the barriers in their organisation’s communications, improving visibility, for example, between a supplier in the North and customers in the West.

AI (artificial or augmented intelligence) technology can keep a constant overwatch on your supply chain looking for signs of trouble and alerting you early granting extra time to solve the really damaging issues, such as an impending weather event likely to close a vital port.

In supply chain management, people often work in silos: detached, isolated, and often far removed from the decisions being made in the C-suite or within other functions of the business. This leads to an unnecessarily complex chain of communication that is difficult to untangle when something goes wrong. Imagine if, in the future, all the elements making up your supply chain could be connected into a fully transparent process where internal barriers are broken down.

When you improve visibility across your network you can gain wider insights into your customer demand and be better prepared if things fail to go to plan. For example, if the demand for your product is outselling your current supply you need to communicate with the supplier to increase the stock in order to maintain your profit margins. Instead of an arduous trawl through past invoices, imagine a service that simplifies this, increasing your customer satisfaction by offering accurate and guaranteed product and shipping information.

In addition, by using AI-enabled orchestration your analysis of total costs and value is more precise and time effective, allowing you more time to concentrate your energy on satisfying customer engagement. This ensures the greatest level of accuracy giving you an overview of your products’ end-to-end supply chain journey.  Supply chain professionals will be able to look beyond their network itself and review potential impacts from other areas, such as weather, news, and transport conditions. As your process evolves and becomes more efficient real-time product guarantees, such as same-day delivery, become the norm instead of an anomaly.

As your supply chain becomes more transparent, it furthers the opportunity to increase business results as the time previously spent on administrative tasks can be refocused.

A real-world example that could benefit from this style of operation is the supply chain in the run up to a major sporting event, such as the Rugby World Cup later this year. Supplier A of miniature replica rugby balls needs to ensure these products are well stocked in their customers’ stores two months prior to the start of the tournament. Unfortunately, due to the extreme weather conditions currently hitting America, Supplier A’s usual plastic provider cannot deliver on this order. By making the supply chain more transparent and with the help of AI, this blocker is flagged early in the system before any time delay arises and Supplier A opts for a European plastic provider instead. The issue is managed successfully and in good time. As a result, the quick response enables Supplier A to meet their quota with their retailers, guaranteeing delivery in time before the start of the event, at a lower cost than if they’d spotted the issue later. Supplier A and their retail customers will not be pipped-to-the-post by competitors.

Now let’s consider the situation when Supplier A’s sellers have spotted that the market for their miniature replica rugby balls is projected to be a lot smaller than at first thought. In many organisations, the supply chain team might go to extreme efforts to get the product’s problem sorted, while the sales department is shifting away from selling the product: an exemplar of common miscommunication resulting in delays and increased costs. Up-to-the-minute communication and feedback from the supply chain right the way through to the consumer provides the correct knowledge to facilitate informed decisions. This enables flagship products to be given first priority, as opposed to products that can get away with a delay of a few weeks.

The efficiency illustrated in the example above highlights how supply chain isolation no longer needs to have a detrimental effect on business results because the internal organisational silos have been broken down. Instead, a more transparent system acts as the catalyst for even greater customer satisfaction. Not only does this positively influence Supplier A and their retailers but, most importantly, the fans’ experience of the Rugby World Cup will be that little bit brighter.

In summary, by increasing visibility across communication channels it furthers delivery accuracy, time efficiency, and business results. All of which can contribute to providing your customer with the very best service you can offer.

IBM Watson are sponsoring Procurious’ London CPO roundtable on 13th February. To request an invitation contact Olga Luscombe. 

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.



How The Robots (Nearly) Stole Christmas

“Every Who down in Whoville liked working, a lot … until one day The Boss met a clever robot.” Continuing the tradition of a festive poem in the run-up to Christmas, check out this modern retelling of The Grinch from Procurious’ Content Director, Hugo Britt. 

Every Who down in Whoville liked working, a lot…
until one day The Boss met a clever robot.
It was sleek and terrific, with shining chrome knees,
and could do the work of fifteen FTEs.

The Boss called upon her executive team
and said with a grin that was grinchy and mean
“We’ll buy ten of these robots – that’s one hundred and fifty
Whos off the payroll – won’t that be thrifty?”

The head of HR gave a horrified gasp
“But the timing!” he said. “It’s a bit much to ask
your Whos to take a redundancy now!
It’s Christmas next week and there’ll be a huge row!”

The Boss’s brow wrinkled; her face set in a leer,
“Alright” said she, “Here’s another idea …
We’ll bring in the bots – my decision is set,
but we won’t dump the Whos for a little while yet.
They can work side-by-side for two weeks or more,
and come New Years Day, they’re right out the door.”

The very next day when the Whos came to work
They marched through the door and then stopped with a jerk
For sitting there, gleaming, daunting and massive
At the end of ten desks was a robot, impassive.

And then when the Whos all cried out “What’s the deal?”
They were shocked when the robots replied with this spiel:
“We’re your new metal workmates – we’re starting today!
We’re cognitive, clever, and can dance the ballet.
We’ll work round the clock and charge not a cent …
The ROI on us is 10,000 per cent!”

The Whos stomped as one to the Head of HR.
Seen dimly through the haze of his half-smoked cigar.
“What’s with the robots? ‘Workmates’ indeed –
You’re going to replace us! They work twice our speed!”

The head of HR, while stroking his beard
assured them it wasn’t so bad as they feared.
“They’re just here to assist. Fear not for your jobs.
Robots are the future! Stop being such snobs!
You’re quite safe (for now) so help them onboard
and we’ll have another discussion … moving forward.”

* * * * * * *

Two weeks passed quite quickly; the new year dawned bright
the Boss checked her calendar and smiled in delight.
“Today I’ll cut costs in a manner abundant –
I’ll tell one hundred and fifty Whos they’re redundant.”

She leapt to the lift and pressed second floor –
preparing to show all non-robots the door.
But when she arrived she received a surprise
At the hustle and bustle before her two eyes.

The head of the Whos leapt straight to his feet
and said “Thanks for the robots! They’re totally neat!
We worried that they would steal all our careers
but now it turns out these were unfounded fears.”

“We no longer need to do tactical chores –
mind-numbing spreadsheets and other such bores –
These robots are handling all of those tasks …
Now we have time to be strategic at last!”

The Head of HR stepped forward, then. “It’s true!
The robots are great, but your humans are too.
They’re thinking new thoughts; they’re stepping outside
the box we created with the tactical side.”

“Innovation is up! Relationships too!
Soft skills are unlocking new value for you.
These Whos are terrific – we never foresaw
that with time on their hands they can do so much more.”

The Boss raised her voice to address the whole throng
and shouted aloud “It turns out I was wrong!
I’d thought that these bots would make you inessential;
instead they’ve unlocked your hidden potential.”

“So just let me wish you a most festive season,
secure in your jobs, and having new reason
to be joyful about this happy yuletide:
humans and robots, at work side-by-side.”

Could Blockchain And AI Help Procurement Change The World?

At last month’s London CPO Roundtable we explored how to enable smarter procurement, using blockchain for social good and anticipating disruptive forces…

What are the obstacles to more informed, strategic decision-making in procurement?

How can procurement pros use blockchain for social good to change the world?

What disruptive forces are heading your way in 2019 that could impact your supply chain?

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

Enabling smarter procurement

A new study by Forrester, commissioned by Ivalua, surveyed 433 procurement, supply chain and finance leaders across Europe and North America. The results, which Alex Saric, CMO Ivalua took us through at the roundtable, provide a practical look at how to enable smarter procurement.

The obstacles to more informed, strategic decision-making are quite consistent. The study, entitled “Enabling Smarter Procurement” found three common issues

  1. Firstly, despite efforts at automating processes, too much capacity is still consumed by operational or manual activities. Teams must free capacity to work on new projects, conduct analysis and plan, but are struggling to do so.
  2.  Secondly, leaders struggle to access relevant insights when and where they are needed. The volume of information now available is of little help if not digestible, simply leading to information overload.
  3. Compounding this, respondents also cited poor data quality as a key challenge. Duplicate supplier records, inaccurate data and poor integration between systems all were cited as sources of data quality issues.

A common viewpoint today is that Artificial Intelligence (AI) is the answer, the magical light at the end of a dark tunnel that will improve automation and give us the magical answers we need, when we need them. But what isn’t discussed is ensuring you have a solid data layer that feeds the intelligence layer, where the algorithms lie and all the talk lies.

Organisations must implement AI in conjunction with cleaning up their data, rather than using poor data quality as an excuse for inaction.

Empowering procurement to make more informed, strategic decisions is no longer an option. There is simply no other way to effectively meet the broad set of objectives now expected.

Using blockchain for social good

Olinga Ta’eed, Director, Centre for Citizenship, Enterprise and Governance became the world’s first Professor in Blockchain and Social Enterprise at Birmingham University in 2018. He led a discussion surrounding his research into using blockchain for social good, which focuses on studies into methods to alleviate problems and provide significant intervention into society.

“No one grows up saying mummy I’d like to be a CPO,” he begins. “And that’s because we value non-financial value. We grow up wanting to do things that have value in society – things to do with life and sentiment, we want to change the world.”

“In institutional life we often succeed in stripping that out – any kind of intangible value. But this attitude doesn’t occur in real life, only within institutions.”

In our own lives we use our personal values to procure things “I’d like to have products that are aligned to my values, I’ll use this coffee shop not that one, I’ll eat this ice cream not one from that place, price is this important to me but slavery is this important. We talk about our feelings”

Blockchain could enable procurement to change the world by bringing our values back into the workplace.

“My honest belief is that procurement will be the single largest instrument in the world to change the world – children will say they want to be a procurement officer because they will want to change the values of the world – what we buy, what we eat, what we sell, the values by which we transact. Blockchain and AI will change our processes dramatically.”

Preparing for the disruptive forces heading your way

Given the rate at which technology is evolving and how global events are impacting the world, it is increasingly difficult for companies to keep up without considering risk in real-time.

Intelligence about the world we live in drives business operations and the better informed we are the easier it is to drive progress. Mark Joyce, Head of Analysis, Sibylline revealed the most disruptive forces headed our way in 2019.

The four baseline trends include:

  1. Geopolitical reconfiguration – Chinese growth and assertiveness and a US retreat from global leadership
  2. Deadly conflict on the rise – Total conflict deaths fell enormously from mid-nineties up until the last decade. Since 2012 they’ve sparked to the highest since 1990s. Conflict deaths are concentrated in North Africa, Middle East, Syria Libya and Yemen. Middle Eastern countries have accounted for 70 per cent of battle deaths over the last five years.
  3. Disruptive populism
  4. Weakening of frameworks – including nuclear weapon control

These trends impact procurement in four ways:

  1. Strategic uncertainty – Impacting high-level decision making; blurred lines between politics and business -and criminality
  2. Tactical challenges – Geographical, technological, legal and reputational
  3. Cross-functional working – Procurement, legal, communications, HR and IT are increasingly stakeholders in political and security risk information
  4. Decision advantage – The importance of precise, actionable information and analysis to avoid paralysis and enable business in an uncertain external environment

Adventuring against adversity 

Kris King, Ultra-runner and adventurer extraordinaire specialises in the safe delivery of life-changing challenges and expeditions in the world’s most remote and demanding areas.

He inspired our roundtable attendees with his personal story describing how his best friend’s dad was diagnosed with Huntington’s disease and his commitment to raising as much money as he could for medical research.

Kris become the youngest gym owner in the country, started running marathons, which turned into running ultra-marathons, which turned into extreme adventuring across the world, and started to see what a difference he could make.

In his own words “adventuring doesn’t pay well” so he found a way to monetise it – designing extreme adventures for clients, as well as for himself. Whether it’s expeditions in the Arctic Circle and Namibia, driving over a frozen lake with Daniel Craig, catapulting David Hasselhoff or bungee jumping a car of a cliff – nothing seems to be out of reach.

As Kris pointed out “it’s not about skill it’s about how stubborn you are.”

The London CPO roundtable was sponsored by Ivalua. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation. 

3 Steps To Building A Future-Proof Organisation

Automation, artificial intelligence and emerging technologies are changing our world and redefining the future of work. Organisations need to gear up to manage this transition wisely and understand the new rules of the game.

This article was written by Kumeshnee West

The fourth industrial revolution has the potential to disrupt every industry in every country through large-scale automation, adoption of emergent technologies, big data and artificial intelligence. There are many predictions and estimates on how this will affect labour markets, but one thing is certain – the jobs we do, and the skills we need to perform them, will change, and rapidly.

A McKinsey report estimated that by 2030 at least one-third of the activities of 60 per cent of occupations could be automated. This means that globally up to 375 million people may need to change jobs or learn new skills. A World Economic Forum report predicted that current trends in a disruptive labour market could lead to a loss of 7.1 million jobs, two thirds of which are in administrative roles. And a study by Oxford Universityestimated that 47 per cent of total employment in the United States is at risk due to computerisation, given that automation and computerisation are no longer confined to routine manufacturing tasks. Big data and artificial intelligence are allowing a wide range of non-routine cognitive tasks to be performed by machines.

While this may sound catastrophic, the good news is that while large-scale automation may redefine the workplace it does not necessarily mean we will all be out of a job. Changes in technology also create new jobs and spawn new industries. The challenge is going to be ensuring that workers have the skills they need to transition to different jobs. The fourth industrial revolution poses a risk to job security only in the sense that not managing this transition can lead to greater unemployment and social inequality.

In approaching what lies ahead, managers and leaders should consider the following three truths.

1. Talent will be more important than capital

Klaus Schwab, Chairman of the World Economic Forum believes that “in the future, talent, more than capital, will represent the critical factor of production”. To make sure they are ready for a future that is still emerging, organisations and people need to be adaptable, innovative and responsive. If up to 65 per cent of the jobs of tomorrow don’t exist yet – it is impossible to “train” people in the conventional sense. Rather we need to invest in their essential capabilities.

To ensure we build talent that is capable of mastering change we need to invest in resilient leadership. Leadership skills are not tied to particular jobs or industries and solid leadership development provides the kind of transferable skills likely to be needed in the future. The WEFidentified the top ten skills that will be most needed in 2020 as: complex problem solving; critical thinking; creativity; people management; coordinating with others; emotional intelligence; judgement and decision making; service orientation; negotiation and cognitive flexibility. These essential skills have long been part of most good leadership development, MBA and executive education programmes – and they will need to be scaled up.

2. Education needs to be flexible too

The WEF report recommends that organisations embrace talent diversity, leverage flexible working arrangements and incentivise lifelong learning to best manage the changes ahead. Lifelong learning and executive education certainly have an important role to play in a rapidly changing job market, and these programmes also need to be flexible and adaptable to student’s and organisation’s needs.

Massive Open Online Courses (MOOCs) already offer flexible access to lifelong learning and the number of courses available is rapidly increasing to meet demand. Many perceive the downside of online learning to be the loss of face-to-face interaction, which is still regarded as critical to the quality of education – specifically when it comes to learning and practising the essential skills identified by the WEF. Educational institutions are looking to fix this by offering a mix of traditional and online learning to reskill and prepare for workplace transition. There are opportunities for combinations and blends of one-on-one and group interactions at all levels of learning.

3. The link between education and business is a two-way street

The format of what is being taught needs to be flexible but so does the content.

As the WEF report suggests, education systems need to be re-designed if we are going to tackle the transitions ahead. This entails businesses, governments and educational institutions working together to provide curricula that meet current and future needs. The McKinsey report suggests that governments have a role to play in maintaining economic growth, scaling job retraining and workforce skills development, and providing income and transition support to workers whilst retraining. But they cannot do this on their own.

Educators supply industry with critical skills, and industry has a hand in shaping the talent pool and informing educational institutions of the changes they foresee and the skills they wish to develop. Businesses that invest in long-term partnerships with educational institutions to develop skills and respond to changes in the environment will stand a better chance of building a workforce that is future proof: suitably skilled, adaptable and ready for the challenges that we collectively face. As the African proverb goes: If we want to go far, we need to go together.


Kumeshnee West is Director of Executive Education at the UCT Graduate School of Business. This article was originally published here.

How the Rise of AI Will Lead to a Pay Rise in Procurement

It may seem that the AI reduces human labour and eliminates the need for manual intervention, however in order to fully exploit the AI functionalities, human skills are a must. Here’s how the rise of AI could be lucrative for procurement professionals…

With the advent of transforming technologies like artificial intelligence (AI) and data science, the landscape of businesses has seen a tremendous change in the last couple of years.

In fact, some of the industry giants are already enjoying the many benefits of AI.

Amazon has been using transactional AI for quite some time now. It has been using predictive analysis for understanding a customer’s purchase behaviour. Tesla cars and their self-driving features, is yet another example of AI being utilised for enhancing the user experience. Another powerful example of AI being used for human interaction is the technology used by Cogito. It uses behavioural adaptation and emotional intelligence for customer support.

According to a recent research study by Ivalua, a leading spend management cloud provider, about 55 per cent of the organisations are about to make a significant investment in AI in the coming two years. If we go on consulting industry trends, these figures clearly point out that AI has already started paving its way towards all the major industries including supply chain management and procurement.

Why is AI essential for procurement?

Procurement workers spend a large chunk of their time binding together fragmented information coming from myriad transactions, something that technology can easily take care of within a fraction of a second. Repetitive, labour-intensive transactions, cost negotiations, supplier performance monitoring etc. add further to the woes.

So how exactly has artificial intelligence strengthened the functioning of various tasks in procurement organisations? Let us find out:

  1. Automation for Repetitive Tasks: One of the trickiest parts in the procurement process is the number of repetitive tasks that consume a substantial amount of time and energy. AI technologies like machine learning, cognitive learning and robotic process automation not only make these iterative tasks faster but also more economical.
  2. Efficient Strategic Sourcing: With a robust machine learning technology, the data acquisition, cleansing & classifying of data and spend analysis become extremely efficient. It is even possible to analyse the spend patterns using real-time classification technology.
  3. Improving Engagement with Bots & Virtual Employee Assistant Chatbots a.k.a conversational interface is capable of incorporating both written messages as well as voice messages that can emulate chatting with a real person. Because of their recall abilities, they can even identify the users they’ve talked with before, thus improving the engagement. The voice assistant technology, on the other hand, is changing the way the user experiences the procurement process altogether.
  4. Handling Supply Management: Through AI, it has become possible to tell the overhead cost by gauging the stocks beforehand. This means that the AI technology intelligently balances the supply and demand by optimising the goods delivery. All this can be done by merely defining the action parameters through machine learning.
  5. Taking Care of Risk Management: AI also helps the enterprises to manage risks related to sourcing from suppliers during procurement. Supplier selection is made more predictive and intelligible. It is also capable of integrating the external data and financial risk scores to chalk out the potential threats.

Investment Required for AI in Procurement

The efficacy of AI in procurement is undebatable. However, setting up AI for procurement comes at a cost. The complex technologies that AI envelopes require application by trained professionals. Here are some of the technologies that come under the purview of AI in procurement:

  • Machine Learning (ML)– This is the most sought-after and most investment consuming technology for organisations today. This consists of APIs (Application Program Interface), development tools and algorithms. ML constantly keeps evolving and improving itself using a given data.
  • Deep Learning– It is actually a type of machine learning. It mimics the human brain in the sense that it observes a large amount of data and learns from it. The learning thus comes here from observing patterns in the given data.
  • NLP– It is a software that helps machines to understand human language and interact accordingly. It is capable of understanding the structure of the sentence, intent and meaning.
  • Virtual Agents– They are the computer programs that are capable of having meaningful conversations with humans. Alexa, Cortana, Siri are some of the popular virtual agents.
  • Decision Management– Decision Management architecture includes systems that can make information-driven automated decisions.

Investing in Human Skills

It may seem that the AI reduces human labour and eliminates the need for manual intervention, however in order to fully exploit the AI functionalities, human skills are a must. Procurement organizations cannot overlook the need for hiring dedicated professionals who master data science and have logical skills for using AI technology appropriately.

Despite the rapidly growing need of AI in major industries, the demand for data scientists and data engineers are not meeting the supply. As a result, the rise in the salary structure for these professionals stands inevitable. A recent survey of 50 best jobs in the USA by Glassdoor ranked data scientists at number one with a median salary of about $110, 000.

This also means that procurement organizations that are looking to get a stronghold in the industry with AI-driven technologies will have to loosen their pockets to get the best team on board.

Time is Money

The transformational footprint of AI on procurement and supply chain operations today has made it the most coveted technology. What the organisations fail to realise is, they are unknowingly shedding big bucks in the guise of time when they are manually performing the procurement functions.

Smart procurement can positively trigger efficient decision making, reduce human errors and save your precious time. This time can then be utilised in taking more strategic initiatives such as building influence within the organisation, improving relationships with suppliers, focusing on innovation, upskilling teams etc.

These initiatives will ultimately give you a bigger ROI and also an edge over your competitors. So if you consider the eagle’s eye view, investing in AI at this point in time is like securing your place as the world rides the digital transformation wave.

This article was written by Ethan Scott

How To Enable Smarter Procurement Today

If AI is the light at the end of the tunnel, why are there so few success stories to be found? How do we enable smart procurement?  

Success with today’s broad set of complex objectives requires Procurement leaders to think strategically and process ever greater volumes of diverse information. Unfortunately, this is an area with significant room for improvement at most organisations. A survey of over 400 procurement leaders by Forrester found their top priority to be “improv[ing] business insight on purchasing activity through reporting and analytics.”

The obstacles to more informed, strategic decision-making are quite consistent. The study, entitled “Enabling Smarter Procurement” found three common issues

1. Firstly, despite efforts at automating processes, too much capacity is still consumed by operational or manual activities. Teams must free capacity to work on new projects, conduct analysis and plan, but are struggling to do so.

2.  Secondly leaders struggle to access relevant insights when and where they are needed. The volume of information now available is of little help if not digestible, simply leading to information overload.

3. Compounding this, respondents also cited poor data quality as a key challenge. Duplicate supplier records, inaccurate data and poor integration between systems all were cited as sources of data quality issues.

Fortunately, new technologies are available that can empower procurement to address these and other challenges and rise to the occasion. AI in particular is finally coming of age and often viewed as the answer to many of Procurement’s challenges. The same survey found that 71 per cent of business leaders plan to adopt AI in procurement over the next 12 months. Yet if AI is the light at the end of the tunnel, why are so few success stories to be found?

A key reason is the approach taken to implementing AI solutions to date. As vendors struggle to burnish their innovation credibility, there has been significant marketing ahead of capabilities which has led to unmet expectations post implementation. As capabilities are now coming in line with past marketing, this problem will subside. Of greater concern, the innovation race has led to nearly an exclusive focus on the algorithms, leading to poorly designed implementations. Less innovative but equally important areas, especially data quality, are being ignored. AI relies on a solid foundation of data, in terms of volume and quality, so solutions that offer clever applications alone are sure to disappoint.

To remedy this problem, organisations must implement AI in conjunction with cleaning up their data, rather than using poor data quality as an excuse for inaction. Source-to-Pay suites that are built upon a unified data model partially address the challenge by generating clean data that can be mined by AI applications across all processes. For example, suites with a single supplier record can provide true 360 degree visibility of supplier performance and activity, and enable AI applications to predict potential risks.

That still leaves issues with existing data or data in other systems. Here, master data management solutions should be leveraged that can actually fix issues in back end systems, linking vendor and item master records across systems. This further improves visibility and the potential for new and better insights.

Empowering procurement to make more informed, strategic decisions is no longer an option. There is simply no other way to effectively meet the broad set of objectives now expected. Fortunately, new technologies are finally reaching the level of maturity where they can have a transformative impact. By implementing AI applications in parallel with initiatives to improve their data foundation, leading organizations are both enabling smarter procurement today and ensuring they are well positioned to leverage tomorrow’s innovations.

Ivalua sponsored today’s London CPO roundtable. If you would like to attend or sponsor a Procurious roundtable please contact Olga Luscombe via [email protected] 

4 Reasons Supply Chain Professionals Should Embrace AI

Embracing Artificial Intelligence (AI) will re-invent the way supply chain professionals work and help them to add enormous value to their organisations.  

In our hyper-connected global economy, where customers have endless options and high expectations, supply chain leaders are increasingly under pressure to fundamentally transform their operations in order to deliver on their brand promise and stay nimble in the face of rapid changes.

This is a significant endeavor. Supply chain professionals oversee complex, multi-enterprise ecosystems. They must ensure the quality, delivery, and availability of supplies, all while reducing costs.

Every day is an exercise in mitigating ordinary and extraordinary disruptions, too many of which they never see coming such as delivery delays, quality defects, political unrest, and natural disasters.

Artificial intelligence (AI) has enormous power to reinvent the way supply chains do business and deliver an incredible competitive advantage for practitioners.

1. Find the Right Data

 The skyrocketing amount of data scattered across supply chain operations is overwhelming and runs the risk of leading to greater inefficiencies as it inhibits access to real, relevant insights.

Supply chain leaders need end-to-end visibility with real-time, contextual insights that reduces the amount of effort required to see what’s happening across their network. Advanced AI can improve the ability for companies to combine and correlate vast amounts of external data like weather, customs clearance, and traffic with their own corporate and client data to get a complete picture.

AI means that supply chain leaders can see what they didn’t before and they don’t have to stitch together information from various data sources and transactions.

2. Act Faster to Mitigate Risks

AI gives supply chain leaders the confidence to act faster as they can now proactively predict and quickly assess aspects of their operation, such as responding to customer inquiries and adapting to changes in their business environment.

This is no small feat. Increased visibility and insights mean that manufacturers can drill down to any event and quickly understand the potential financial and customer service implications in real-time and receive recommendations on how to respond. The learning nature of AI enables greatly increased response times to future events as the system learns from each past mitigation.

Today, most manufacturers are reactive to supply chain disruptions – socio-political events, natural disasters or even daily occurrences like power outages and harsh weather. All disruptions force leaders to make last-minute decisions with little-to-no data, which can greatly affect the brand.

AI can comb the digital universe for indicators that those activities are presenting a supply chain risk. Not only can AI alert practitioners of the growing risk, it can also generate impact notifications and a playbook on what steps to take to mitigate the risk.

3. Uncover Opportunities to Drive Cost Savings

Finally, AI’s ability to identify opportunities to streamline supply chain operations allows for greater efficiency – often uncovering hidden opportunities to drive down operational costs.

One such example is helping supply chain leaders and their IT counterparts save crucial time by getting immediate answers to questions that matter most to their jobs, which in turn optimizes their decisions and actions.

Today, when a customer asks a simple question about the status of an order, a customer service representative has to pause and enter an IT request, a process that can take days. The IT Department then has to spend more time searching across multiple systems to piece the information together. The information is not searchable or readable to the business person.

AI uses natural language search to allow an employee to inquire about the order, without a go between in IT and get the answers faster.

4. The Smarter Supply Chain

A smarter supply chain is designed with disruption in mind. It connects disparate systems and events both in and outside of a partner network. It taps all the right data – even unstructured – and extracts actionable insights from it, in context, at astonishing speeds.

Practitioners can proactively identify, assess, and mitigate disruptions and risks today – and have confidence that they’ll do it all faster and more effectively tomorrow. AI provides the technology, tools and real-time, actionable insights to extend collaboration and achieve unprecedented visibility, while driving new levels of transparency and trust. The result? A supply chain architected for advantage now and well into the future.

Continue reading 4 Reasons Supply Chain Professionals Should Embrace AI

Data: You Complete Me

AI has the potential to shoulder a vast amount of the #procurement workload. But machines can only do the work for you if you capture all the data in the first place.
Last month Procurious hosted the very first Procurement Thought Leadership Forum in Chicago to discuss the evolution of procurement; what the future holds for the profession; how we can effectively determine the size of the global market; the importance of professional associations and maturity levels across the globe. 
The event, sponsored by Basware and attended by a number of the world’s leading procurement consultants, sparked some fascinating discussion and debate.

Dealing with Data

Remember that Tom Cruise movie – Minority Report? Eric Wilson, SVP Basware North America, certainly does. “In the movie Tom Cruise swipes things on a giant screen, he then predicts a crime and the team prevents it before it happens. It was pretty cool. Especially, back in 2002 when we didn’t even have touch screens on our cell phones and artificial intelligence (AI) was in the realm of science fiction.”

Of course, today we all use AI in our daily lives, whether we realise it or not. As Eric asserts “AI is the new electricity. When we replaced steam powered machines with those using electricity, we transformed transportation, manufacturing, agriculture, healthcare and so on; increasing efficiency tremendously.  AI has the same, huge potential, but nobody truly knows yet how it will change the world.”

Indeed, as  Eric pointed out it’s difficult to think of an industry that is not being impacted by AI;  IT, FinTech and Healthcare, to name just a few, are all being totally transformed. Self driving vehicles is an industry that is built entirely on AI.

But holding the right data is critical in order to harness the benefits of new technologies. If an organisation can turn all the data they hold into tangible customer value by leveraging machine learning and AI they can actually begin to benefit from these technological advances in the market. But to do so relies on having the right volume, quality and completeness of data .

“If you don’t have a view to the future when you are evaluating automation options, not only will you not achieve your business case for today, but three years from now, your system will be obsolete,” states Eric.  “It will be obsolete because it did not capture all of the data in the first place.”

In Eric’s mind there are no two ways about it: you can’t use AI if you don’t have the centralised data for those machines to learn from. “And so, my key takeaway now and always is: when you are putting together your RFPs for systems, data better be first and foremost on your mind!”

The conversation century

Elizabeth Linder, Founder and CEO of The Conversational Century joined Youtube in 2007 and often thinks back to that year, a significant time for Youtube, in order to understand the social media space.

It was an exciting and life-changing time for skilled amateurs. A time that had millions of people singing in their bedrooms or racking  up millions of video views for a commentary on something they would never otherwise have been considered an expert in. Youtube ultimately offered them the opportunity to be heard.

Elizabeth is a strong believer that the internet is the best place to build trust. “The people” ( i.e. you and me) have already got this all figured out. But the reason so many people still believe the internet is destroying trust is that our leaders are still so far from getting it right! We simply don’t have leaders at a political level that have invested in a voice on social media.

Some key things to remember when trying to start conversations online:

  • Most leaders fear that they have to move at an increased pace because of today’s internet culture. You don’t. Go at your own pace but keep people informed as you do it. It’s ok to communicate to people that “the discussions are still in progress” or “we don’t have information on this yet” so long as you’re communicating something!
  • Believe in the power of primary sources because the public certainly do. Hearing directly from the source rather than a paper adds a lot of value to your communication. If you’ve ever been quoted in an article, blog or feature you’ll know the producer of that piece never quite gets to the meat of what you were trying to say because youdon’t own the conversation or drive the discussion – they do!
  • Embracing in the hacker culture, i.e. making it up as you go along, is key. EU politicians, for example, only see social media as a tool for outbound communications and not for their inbound policy making. Hacker culture dictates that they need to consider the latter.

Elizabeth’s take away advice on owning the social media space? “Be yourself online and talk to people in a way that lets them in but not in a way so casual that you’re treating them like family.”

The value of professional certifications

Rick Blasgen, CEO – Council of Supply Chain Management Professionals (CSCMP) and Tom Derry, CEO – Institute of Supply Management ISM led a session on the evolution of procurement  and supply chain and the value of professional certifications.

Both leaders are very optimistic about what the future holds for procurement and supply chain professionals . “I think [these professions]  will be an embedded feature of every competitive global company around the world because they see so much of what goes on,” argues Rick. “We see it really growing into the fabric of successful companies.”

And Rick believes professional certifications “are a normal part of continuing to educate yourself and continuing to be knowledgeable about such a dynamic and ever-changing field.”

“One of the things important to CSCMP is to advance the logistics, supply chain and procurement professions and the careers of those working in them. The only way we do that is by being thought leaders and thinking about using the new technologies and tools that have never before existed.

“Our certifications will educate you on these things and then test that you have the understanding and can utilise the complexity within them.”
“An association used to function as the place where people felt obliged to belong,” says Tom. But nowadays he doesn’t believe professionals feel such a sense of needing to belong to an association  just for the sake of belonging  “They need value for money and they expect a professional body to provide tools and skills that enable them to be successful at a critical moment in their career.”
Sizing up the procurement market
Braden Baseley, ProcurementIQ Analyst discussed the size and maturity of the global procurement market, revealing preliminary  insights from their specially commissioned research report.
The research reveals…
  •  There are 554, 560 procurement pros working in the US, which make up 0.4 per cent of the workforce
  • The average salary for a US procurement professional is $72,199, which is pretty good considering the average US salary is approximately $55, 000
  • California, Texas and New York employ the largest number of procurement professionals
The report will also explore how procurement skills are changing and evolving and the skills that are most desirable in procurement teams.
The Procurement Thought Leadership Forum was sponsored by Basware. 

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.