Tag Archives: AI

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.

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