Will you be a survivor of the AI revolution? You’ll need to be well equipped and prepared for anything…
This article was written by Naveen Joshi.
Artificial Intelligence is speeding the robot revolution and can be responsible for replacing a huge portion of the human workforce with machines, and there’s nothing we can do to stop it, other than preparing for AI revolution.
Artificially intelligent robots are finally set on replacing humans in the labor pool, and due to this, the society can shift dramatically. Until the AI revolution is complete, humans can either try to slow the automation of the workforce or start preparing for AI.
If the popular media are to be believed, AI is coming to steal your job and threaten your life, as we know it. The AI revolution is indeed underway and for ensuring that you are prepared to make it through the times ahead, we’ve listed a few guidelines for you.
Recognising the AI Revolution
The first step for winning every conflict is to understand your target. It is important to acknowledge that the concept of AI is not in the future; it is already here and people are using it on a daily basis. For example, because of the AI technology, Netflix knows what to suggest you watch next, and Google predicts where you are heading when you jump in your car. AI also encompasses disciplines such as machine learning, using which companies are finding patterns in data and learning to predict trends, as well as speech processing, computer vision, and robotics. Moreover, it also encompasses deep learning, which is inspired by the model of the brain. Deep learning systems work by mapping inputs to a set of outputs based on features of the thing being examined.
Identify where AI Thrives
With sufficient knowledge of AI technology, you can now start to understand where AI is optimally positioned to take over. Have a look at your market trends and conditions and take note of tasks that require huge amounts of big data processing. For example, companies are now looking through everyone’s click patterns on Google to figure out what someone wants.
Essentially, AI works best for any task that requires a huge amount of repetitive processing. If this sounds like your job, you might have to start thinking of a survival plan. You can also access websites that evaluate your automation risk, to find out what researchers have calculated for your field.
Devise an Action Plan and Start Preparing for AI
The best strategic action plan is to form a treaty. You should accept that AI will increasingly become a part of our society and look for possibilities to collaborate. There is a huge potential for AI to assist in places where humans are today falling short, precisely because of the processing power. Companies are already using AI for aiding clinicians in medical diagnosis, personalizing customer experiences, and creating agricultural methods that reduce the cost to the environment. AI has the ability to learn very well but it cannot learn flexibly. You can. There are new jobs now available that did not exist a few years ago. If you are allowing AI to do the grit work, this can create an opportunity to embrace the attributes that humans excel at, namely social intelligence and creativity.
As with every big and impacting change, there are fears about new technology like AI. Ultimately, the way you can survive the impacts of an AI revolution is by embracing the partnership. By understanding the potential that AI has to improve the world, you can look around for those opportunities to implement positive change.
Naveen Joshi is Director at Allerin Tech Pvt Ltd. This article was orginally published on LinkedIn.
As algorithms, virtual assistants, and bots infiltrate conversational interfaces across business applications, in the crosshairs is company spend tracking and control. This is the panacea we’ve all been waiting for to an age-old problem.
Messaging services like Slack are ground zero for a new generation of integrated bots in the workplace. Most have stopped trying to trick users into thinking they’re chatting with humans while new features like message menus (dropdowns) integrated into the AI-generated text help users make nuanced decisions.
Driving the conversational UI behind the scenes is an-ever evolving mix of machine learning algorithms for pattern recognition, natural language processing, and other associated technologies. Together, they deliver a contextual experience that helps business users make smarter and faster decisions.
One business workflow rife with inefficiencies and errors is corporate buying and expense tracking. Pointing chatbots, or the next iteration of them that we’ll call AI assistants, in that direction will benefit everyone in the requisition and approval flow, from end users to the head of finance or the treasury boss.
The appeal of AI could be even greater for smaller businesses since most lack formal spend management policies, but still need to see who charged what and when on the company credit card. AI assistants enabled by emerging algorithms can arm every purchase decision with intelligence, in effect, augmenting human judgement every step of the way.
AI assistants can add intelligence to everyday tasks
In the realm known as transactional procurement and travel and expense (T&E), solutions with AI assistants could help with general questions, such as clarifying budget status or a spend limit. A user would be able to simply ask the robot a question within the same messaging interface where they chat with colleagues and then get an instant response.
For payments, an AI assistant could learn how you buy and then make recommendations based on context, supplier or product data, budget levels, working capital, and other factors one might overlook or simply not be privy to when initiating an everyday purchase for work.
In another scenario, a user could request an approval for a purchase, but before doing so, summon an AI assistant to verify if a similar request was made by a coworker to avoid a duplicate purchase. That way the user wouldn’t have to waste time and go digging for that info herself.
Finally, AI assistants can facilitate the buying process by generating a payment method such as a virtual credit card after the transaction gets approval from a manager on behalf of the requestor. Upon approval, a user would receive an encrypted virtual card with a spend limit to use as payment against a corporate account, massively simplifying what is typically an arduous back-and-forth process.
The AI opportunity goes well beyond transactions
In time, AI will evolve to allow organizations to make strategic buying decisions and respond to changing business conditions and market variability instantly. To get there, it will first remove the bottlenecks of repetitious decisions that occupy our time, like those mentioned earlier in this article. Then, they could be programmed to help make ever more strategic decisions.
In the sphere of sourcing and procurement, that could mean super-intelligent agents sourcing the highest quality rubber from a stable region, determining which short-listed supplier is most likely to honor their contract, forecasting supply chain disruptions and make recommendations weeks in advance, and so on.
Think that level of knowledge work is impossible for algorithms? Think again. Researchers at Google Brain have already developed software that designs machine-learning software with better results compared to machine-learning software designed by the boffins themselves!
We are well on our way to developing new types of non-conscious intelligence that will be able to handle increasingly complex tasks. In his best-selling book Homo Deus, author Yuval Noah Harari, drives the point home: “The idea that humans will always have a unique ability beyond the reach of non-conscious algorithms is just wishful thinking.”
With that thought, we can return to our original premise and have little doubt that the rise of AI will mean all of a business’s spending will get smarter. AI expert Stuart Russell puts AI next to the discovery of fire in terms of impact on civilization. If AI will change the world, then it certainly will change business commerce.
Christopher Jablonski is Director of Content & Communications at Tradeshift, a cloud-based business commerce platform connecting buyers and suppliers.
Procurement technology went full sail and you eagerly jumped on board. But now 90 per cent of all technology is about to become obsolete. Are you prepared for the new age?
As the vice president of Basware’s Purchase-to-pay solution it goes without saying that I’m involved in a lot of procurement technology selection decisions. And over the years, I’ve noticed a recurring pattern in the process, across numerous organisations. It tends to play out a little bit like this:
A CPO of a large organisation is at the end of their tether thanks to a messy purchase-to pay process. It’s the age-old story with AP and procurement operating independently, maverick spend with unapproved suppliers, late payments and paper absolutely everywhere.
The easiest, and seemingly smartest, solution to the problem is the implementation of a new purchase-to-pay system, which said CPO requires, being extra savvy, to be a Software-as-a-Service solution. The CPO knows they can get a decent ROI on whichever supplier they choose.
So what’s the problem?
Unfortunately, our CPO is only looking 5 inches in front of their face! It’s no exaggeration to say 90 per cent of today’s procurement technologies will be obsolete in the coming years. And so procurement needs to start looking much further ahead!
Remember Siebel? We can’t either…
You’d be pretty hard pushed to find an organisation that uses Siebel nowadays. You might even struggle to find someone who knows what it is!
Siebel was the cream of the Customer Relationship Management (CRM) crop in the late 90’s and early 2000’s. It was the absolute best at its time. Hundreds of millions of dollars were spent on licensing and implementing Siebel, with the promise of visibility, efficiency, and improved customer satisfaction.
Fast forward a mere ten years and…nobody uses it. It turned on a dime thanks to Software-as-a-Service and, more specifically, Salesforce. An enormous technology shift took place, and suddenly Siebel and everything like it was utterly obsolete. More than a few CMO’s were fired as a result.
What can we expect from the next tech shift?
What can we expect from the next technology shift? We hear about AI, machine learning and cognitive computing all the time and there’s a lot of concern amongst procurement professionals that it’s going to displace our workforce.
But it’s coming to procurement whether we like it or not. There’s a glaringly obvious application of AI for procurement professionals.
One word: data.
When today’s CPOs try to objectively evaluate the functionality of potential new solutions, they’re often bypassing a crucial aspect (opting to solely measure tactical functionality); the game-changing competitive advantage their organisation can achieve through the power of the data. There are two major considerations to be made here.
Is the system architected for centralised data capture?
The system should be able to capture your data, the data of all organisations using the solution and, ideally, be able to connect with other solutions. The more the system is designed for centralised data capture, the better chance you have of being able to take advantage of the latest data-driven tech changes.
My advice is that you eliminate anything that focuses solely on you and your data. If it’s not central, you can be sure you’ll get stuck behind and end up like one of the organisations using Siebel. But, of course, design alone is not enough.
Does the system actually capture that data?
To capture all of this data, there are three parties that matter: suppliers, requisitioners, and AP. This is where tons of business cases fall apart.
Suppliers: To capture data you have to get all your suppliers on the system. Not just your big sophisticated suppliers, every single one! You have to get them connected, or you will fail, if not today then most definitely in the imminent future
Requisitioners: Who are the worst employees when it comes to using a procurement system? It’s fair to say that it’s often the sales and exec teams; the people driving revenue for the company. These groups are only going to use a new procurement system if it’s the easiest and fastest way for them to get their jobs done, which means it has to fit in seamlessly with how they work. If you don’t give them a system that they want to use, you won’t have them, and again you won’t be capturing the data from their transactions.
AP: This is probably the most important part but so often an afterthought when looked at from a Procurement perspective. Consider how many hundreds of thousands or millions of invoice transactions are processed within your company. Now multiply that by the thousands of other companies out there and you’ll get a sense of how quickly that data can scale. Most P2P systems can’t process all of those different kinds of invoices. And that’s where we end up in Siebel world, yet again!
By committing to finding and using a system that captures all of this data, and does so not just for your organisation, but in a truly centralised platform, procurement will soon be able to achieve the following:
Machines that know when you need something. Doesn’t it seem miraculous when Amazon knows what you need and presents it to you when you login? Let me tell you that it’s not. It’s data
Dynamic discounting marketplaces
Exceptions handled without any human intervention, based on patterns of prior behavior in the data. This might not be behavior that humans can readily identify, but machines can with ease by crunching all of that data
Procurement would do well to remember that, In today’s world, the big value is in the data, not in tactical functionality.
Eric Wilson is the head of Basware’s Purchase-to-Pay business for the Americas and APAC.
Yes, robots may be on the cusp of usurping the roles of many procurement professionals, but are the tasks being automated those that we really want?
In 1991’s “Terminator 2: Judgement Day,” the Terminator character, played by a certain Austrian bodybuilder/actor/governor/reality star, revealed how Skynet computers became self-aware and began waging war against the humans.
Is that the future of procurement? Will The Machines, not content with the procurement duties they’ve already taken over, rise up to enslave us? Will they take away our coffee?
If that seems far-fetched and silly, that’s because it is. The future is not set, but procurement professionals should feel confident about their place in it. The importance of human beings in procurement roles will only increase, not diminish, in the years to come.
For evidence supporting that prediction, we need only look at the trajectory of the procurement function over history. Like most important developments in civilisation, it all started with the Egyptians.
The Pharaoh’s Supply Chain
One of history’s greatest capital improvements was the construction of the Great Pyramids. From a procurement standpoint, there was a lot to coordinate. Materials like limestone and alabaster had to be brought in. Hieroglyphics had to be planned. Thousands of slaves had to be managed.
While the Egyptians didn’t follow today’s strategic procurement processes, they did in fact task scribes with recording material and labour on papyrus. And the procurement business was born.
Over the millennia that followed, the role of procurement evolved from recording supplier information to influencing business decisions. The annals of procurement history are cloudy on where and when strategic procurement began, but it seems likely it happened during the 15th century in France.
That’s when French military engineer Marquis de Vauban began qualifying suppliers of buildings and fortifications in his efforts to strengthen France’s defences. About 200 years later, during the Industrial Revolution, businesses recognised procurement as central to their operations.
The first 5,000 years of procurement history yielded only a few milestones. It’s only been very recently that the real change has taken place.
In More Recent History
In the last few decades alone, products and services have become dramatically more complex. As consumers demand more innovative and personalised products, they have become more intricate and varied. At the same time, the demand for business-oriented products and services has followed suit.
This has led to a broader range of materials, components, services and suppliers. Companies have more to consider when sourcing the right products and materials to support their missions. There are also more external factors to consider. Sustainability and corporate social responsibility are becoming more important in how companies are perceived.
On top of that, organisations have more constrained resources than ever before. With increased competition from emerging markets, and volatile changes in the marketplace, companies need to be smarter and more strategic with their sourcing.
All of these trends are being driven and facilitated by the use of computers, the internet, the cloud, and other technologies. Information technology and globalisation have spurred the biggest change to procurement in decades.
People Can Do Stuff
Without a doubt, automation will continue to take over most of the fundamental functions of procurement, displacing humans. We know this because it’s happening in industries like journalism, where computer programs are writing stories.
This is not a cause for concern, but instead a cause for celebration. We have to ask, are the procurement tasks automation is taking over the tasks we really want? In the automated journalism example, computers are writing mundane stories that reporters would sooner “poke their eyes out with sharp objects” than write themselves. They much prefer to write in-depth stories that make use of their intuition and analytical skills.
We have to ask, are the procurement tasks automation is taking over the tasks we really want?
In the same way, automation enables procurement to spend more time developing strategy, building relationships, and evangelising the function. You know, stuff that people can do.
Specifically, there are five areas where procurement will have a significant impact on business in the very near future:
Five Ways Procurement Will Impact Business
Predictive Analytics/Cognitive Procurement – When companies can gain a detailed understanding of the dynamics that impact material pricing, they can see changes earlier, manage around negative events, and gain a competitive advantage.
Agile Procurement – Negative market events can also present an opportunity for flexible procurement teams with the ability to respond and capitalise on them.
Advanced Sourcing – Today, many companies are optimising their supply chains, but only one section at a time. Through advanced sourcing, companies will be able to optimise their entire supply chains simultaneously.
Supply Base-Driven Innovation – Where procurement in the past has been responsible for cost reduction, in the future it will impact the top lines of companies, as well. Managed by procurement, the supply base can provide ways to change the selling channels or even offer innovation to create new products or categories.
Supplier Relationship Management – For companies with many suppliers, managing them – communicating with them, managing risk, segmenting, evaluating performance – is a daunting, but important task.
Let’s see a robot try to advise the CEO on how to adapt to market changes or select suppliers that can help the company innovate!
And that’s just the beginning. New ideas, solutions and technologies have the potential to transform the procurement function in untold ways. What that will be one can only guess, but the result will certainly be greater convenience, efficiency and transparency into the supply chain.
Procurement will play an increasingly vital role in modern business operations, now and in the future. In the coming years, procurement will have a seat at the table when it comes to setting companies’ strategic direction, help them adapt to market changes, and innovate to take advantage of opportunities.
Procurement has come a long way in 5,000 years. While the future is uncertain, it seems likely that the importance of the procurement function – and the people who perform it – will only increase.
Skynet will have to look elsewhere in its quest to enslave the human race. Perhaps the marketing department…
You never know what’s on the horizon, so you need to be prepared for anything. For procurement that means staying agile and always being match fit.
Everyone loves a good throwback article, which is why we’re hopping in our time machine to bring you back some of the biggest and best Procurious blogs. If you missed any of the golden oldies, look no further!
This week, we’re revisiting an article about procurement agility in the digital age, featuring advice from Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader at The Hackett Group.
Given the pace of change in the external environment, being agile means constantly changing, never standing still. It’s not about putting out fires, it’s about ensuring that fires never start in the first place.
For procurement, this means creating and maintaining agile teams, and staying match fit for what comes next. Staying ahead of the curve, be it change, risk or technology, is critical for the future of the profession.
Procurious has spoken to Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader at The Hackett Group on a number of occasions about why procurement needs to put agility at the centre of all its activities.
This year, Chris took the conversation one step further, discussing ways to enable agility through digital transformation and creating an agile team. However, to do this procurement needs to ensure it’s thinking ahead, not just looking at the problems it needs to solve now.
Chris outlines three top tips below on how procurement can be prepared to handle any future issues.
Be Match Fit
As we’ve said above, the key to being agile is ensuring flexibility. A quick way to lose agility is to create a rigid environment that doesn’t allow trying new things.
Define what procurement can and can’t control, and what activities it can drive. Make sure that your procurement team is aligned to the corporate strategies and objectives. It’s a good way of making sure that new ideas will be fully considered as part of the overall organisational strategy.
For example, if Procurement decides they want a diversity programme and the CEO isn’t behind it, it will never reach its full potential. The same goes for technology. If the CEO isn’t invested, the project will never get off the ground.
But even if your company isn’t focused on technology yet, you can be sure it will be in the future. It might be six months, or it might be five years, but it’s better not to be forced kicking and screaming into this new era.
Procurement needs to be ready to go when the business is. You don’t want to be asking for six more months of planning if your CEO wants a transition now. Be ready – have a list prepared of the top three initiatives for technologies, and how they will be implemented. That way you won’t be caught short.
If you want to be prepared, you need to be in the know. Don’t be scared of new technology and bury your head in the sand – be aware of what’s out there. Have a list of the most relevant and best technology and know what it can do for you.
Part of that awareness is also preparing for new technology. Procurement teams need to know what’s happening in the market place, and how it impacts them. You don’t need to know everything, but you at least need to be cognizant of it.
That way, procurement can look at the big issues in organisations through the lens of how technology can help. Is there a technology out there that could help with this issue?
If global collaboration is a major issue, there are social platforms that could help connect all your teams to each other, and even their suppliers.
Maybe there’s a technology that could augment (not just automate) a procurement activity that you are performing today. You might finally have access to all kinds of data, but it’s about knowing what you can do with it to extract competitively differentiating insights.
Create Agile Teams
If you aren’t agile then you can’t prepare for any of this. In fact, it’s unlikely you’re even in a position to be ready to start preparing.
To create agile teams you need to have the basics in place, get ahead of these issues, and aim to be predictive. If you knew what was going to happen (sadly crystal balls are in short supply), you would have the ultimate level of agility, and be able to get ahead of any issues.
However, it’s critical that procurement retains the ability to deliver against organisational objectives at the same time. There’s no use being agile if it means that procurement fails to deliver on the basic requirements.
If you can’t get the basics done, then there’s no point in even trying the ‘fancy’ stuff.
Reimagining What We’re Trying to Achieve
The main problem at the moment is that we can’t even imagine what is going to be possible in the future. The pace of change is so fast that technologies are adapting and evolving in a matter of months, rather than taking years as it did in the past.
It is critical that procurement becomes more adaptable, and ensures that professionals are as informed as possible. Until you have this understanding of technology, you’re losing out. It’s not about the problems you want to solve, it’s also about the problems you’ve not even thought about yet.
The future is an ‘Unknown Unknown’, but with a match fit, agile procurement team, at least you’ll be prepared for what comes next.
Procurement must learn to think the unthinkable, predict the world weather forecast and look further than the end of it’s own nose when it comes to technology in order to remain relevant!
The Procurious London Roundtable was sponsored by Basware.
Procurement 4.0, Cognitive Procurement and Thinking the Unthinkable were among the hot topics canvassed at last week’s inaugural meeting of the Procurious London Roundtable.
Packed with leading-edge speakers, a ready supply of valuable expertise, peer-led market intelligence, and networking, CPOs were unanimous that a reimagined Procurement must be the business’ source of market intelligence on these issues – if it is to secure and maintain a “seat at the table”.
Speakers addressed everything from global politics to AI and making it ito the C-Suite. If you’re intrigued to hear what they had to say, look no further; we’ve managed to pack the finer points into one, handy article!
Learning To Talk Across The Lily-Pads
Nik Gowing, BBC Broadcaster, Visiting Professor at King’s College and Big Ideas Summit 2016 Speaker, joined the roundtable to provide an update on Thinking The Unthinkable. Unthinkables are critical events that are not being considered or prepared for by organisations or by our governments around the world.
From Brexit to the election of President Trump; from Putin’s invasion of Crimea to upcoming European elections, unthinkables have been occurring frequently over the last few years and they’re not letting up! In fact, if anything, unthinkable events are happening more rapidly than ever before.
Nik firmly believes that, in a world of social-media, time-scales for unthinkables which were once 20 years could now be 20 months, 20 days or as little as 20 minutes!
Nic’s advice for preparing for the future? Instead of destroying mavericks within our organisations, we need to turn them into visionaries and harness a culture where they can thrive. Nic has likened the current situation to frogs on lily pads – everyone is sitting in the same pond but not talking to one another – we need to find a way to come together and talk.
Grab An Umbrella And Face The Future
Justin Crump, CEO Sibylline, shared Nic’s concerns for the future and expressed his desire for organisations to address the current void of awareness about, and study of, the corporate security intelligence environment.
An intelligence-led approach to managing risk and predicting disruptions to your business is absolutely the way to go. It allows you to work out when you might be forced to take risks and when it’s worth taking them!
But how do you go about doing this? It all starts with reading your morning paper with purpose! Justin suggests you ask yourself why you’re reading it and how and why it’s relevant or interesting to you. Consider where your clients work and where your supply-chain is based. If missiles started flying over a particular country, would it be critically damaging to your business?
It’s possible, and preferable, to turn reading the news into a data-collection process by collating information and highlighting the important areas to disseminate to people within your organisation.
If in doubt, implement the ADAM model:
ASSESS – Understand your business and your world and what these interactions mean to you
DECIDE – Derive actions to help mitigate risks and refine into an achievable plan
ACT – Implement planned actions
MONITOR – Use ongoing world risk register outputs to understand what is changing in your world. This will help you predict the world weather forecast and figure out when you’ll be needing an umbrella!
Looking Further Than The End of Your Nose
Eric Wilson, head of Basware‘s Purchase-to-Pay business for the Americas and APAC, discussed the critical actions CPOs can take today in order to safeguard against technology obsolescence. When 90 per cent of technology is about to become irrelevant can procurement implement a watertight process that evolves with industry trends?
Eric asked our roundtable attendees to consider the following scenario:
A new CPO comes into an organisation and instantly sees that there is a problem with procure-to-pay and maverick spend. They know they can save a whole load of money for the business. They challenge their employees to develop a business case, which a cross functional team evaluates and a score-card of criteria is developed. Whilst this might sound like a totally reasonable approach there is a one major problem. Eric explained that the challenge with this process is that it focuses five inches in front of the CPO’s face; they’ve seen a problem and they’ve fixed it.
Remember Siebel? Not so long ago it was the best CRM system you could possibly use and was responsible for shifting the entire workplace environment into customer relationship management. Anyone who hadn’t bought Siebel already was about to and huge investments were made.
But, almost overnight, it became completely obsolete thanks to arrival of the Cloud. Siebel went bust, many a CMO lost their job and money was wasted, all because no-body looked further ahead.
Eric explained that the next wave of procurement technology is not just about the traditional goals of visibility, control and savings. Harnessing the value of the transactional data running through the system will be key.
Given the way tech is trending, particularly AI, within three years 90 per cent of procurement tech will be obsolete. People will not raise requisitions – robots will! And procurement must prepare for that.
What’s Holding Up Cognitive?
Pascal d’Arc, former GM of Cognitive Scale, talked us through the journey to cognitive and what some of the practical applications are in today’s world. Is cognitive really all the fuss it’s hyped up to be?
Judging by some of the fascinating examples Pascal gave us, absolutely! One such example was a cognitive system that had been given the ability to experiment with building a drone. The resulting machine had a frame shape which was modelled on the pelvis of a flying squirrel, representing something very close to nature.
But why is the progress of advancing and using cognitive tech so slow, what’s holding us back in procurement? According to Pascal it comes down to a number of things:
The technology so far has been very experimental. There has been a sense of frustration towards IBM but they are still experimenting
Expectations are huge. We are often missing the low hanging fruit when it comes to deciding what to tackle
Procurement isn’t a key investment area…yet! Fintech and healthcare are the current priorities
Aiming For The C-Suite
Damian Walsh, Partner at Heidrick & Struggles, gave our CPOs some top tips on what it takes to get to the very top. How do you successfully move on to a bigger CPO role, step up to CEO or take on a non-executive role.
Whatever it is you want to do, tailor your approach accordingly
Be clear about what you want and position yourself for it
Be clear about what you have to offer – think in terms of business solutions. There is no such thing as a “transport”company any more
Get your CV in order and make sure it’s accurate- so many people don’t!
Manage the search firms – be selective and understanding and clear about what you’re looking for
Work on your personal brand- thought leadership, speaking engagements etc.
Work your business and personal networks
The Procurious London Roundtable was sponsored by Basware.
If you’d like to secure your seat for our second London Roundtable on 11th October 2017, please register your interest with Olga via [email protected].
…Or are they kept awake at night worrying about how to adapt their business to a robotic-centred future? KPMG Australia Chairman Peter Nash reveals two concerns playing havoc with the sleep patterns of business leaders.
How can I adapt my business to a robotic future?
The thing about technological disruption – and machine intelligence in particular – is that people tend to regard it as a challenge to deal with at some point in the future. The key to understanding the scope of the challenge is to break it down into two categories – disruption that we’re already dealing with, and disruption that is yet to emerge.
Robotic process automation (RPA), for example, has been around for decades, with disembodied robot arms a common sight on production lines. Typically, they automate a series of existing processes that were once carried out by humans. We’re just starting to realise the full potential of RPA, with the emergence of bots that sit inside software to automate administrative labour becoming more common.
From his viewpoint into many of KPMG’s client organisations, Peter Nash has seen what an RPA bot is capable of. “If you go into any call centre, you’ll observe staff doing a series of processes as they engage with customers – typically around data capture and data entry. Through observation, you can create “process flows”, and then build software that can be inserted into the call centre and automate the data capture. That’s a classic example of robotic process automation, and it’s happening at pace.”
Interestingly, RPA is resulting in the reshoring of capability from overseas. Nash comments: “You can track the life cycle of offshoring and reshoring. 10 years ago you may have had 100 people doing a job in Australia for the cost of $5 million. Those 100 jobs were offshored to India, resulting in costs being reduced to $1 million. Today, with robotic help, you can have only 10 people doing the same work that 100 used to do – at a cost of $0.5 million. Yes, 90 jobs have disappeared, but there’s the exciting potential for completely new jobs to be created with each technological leap.”
“Artificial (or Cognitive) Intelligence, for example, is only just beginning to emerge. People are very excited about AI’s enormous potential, but at present it’s essentially a solution looking for a problem.”
How do I effectively harness innovation?
Nash comments that there are several models that have emerged in the ways corporations seek to harness innovation. “Many CPOs look for innovation to emerge from down the line, and encourage people, whether they’re in-house employees or suppliers, to bring ideas forward. Other organisations set up innovation capability ‘hubs’ or ‘accelerators’. Another approach is to acquire, or partner with, innovation capability outside of your organisation. Some business are doing a mix of all three.”
“What’s encouraging is that most businesses understand that today, it’s innovate or perish. A culture of innovation, partnered with a culture of flexibility where people have the ability to react and respond to disruptive technology, will ensure businesses are able to take advantage of anything that comes their way.”
Even in a world where data is king, IBM CPO Bob Murphy believes there is nothing so important as professional development and human relationships.
The numbers are eye-watering. IBM CPO Bob Murphy looks after a $70 billion spend – $25 billion internally and $45 billion 3rd-party. The company has around 150,000 contracts across 17,000 suppliers, with its flagship cognitive technology, Watson, reading 900 million pages in multiple languages per second.
As we prepared for our interview with Murphy, it’s understandable, then, that we expected to find him entirely focused on data analytics, automation, AI and the other tech that’s rapidly impacting so many professions. We were wrong – what comes across loud and clear is that this is a charismatic, engaging leader where people and relationships matter.
Think 40 and other professional development
Talking to Bob, it becomes immediately clear that his personal commitment to professional development is enormous. “If you want to be a leader, you have to stay current and replenish your IQ through learning and new knowledge. Ultimately, talent development is about making sure you have excellent people to replace outgoing leadership – it’s also vital for driving innovation.”
IBM’s Think 40 program mandates a minimum of 40 hours per year of self-initiated professional development. For the procurement team, this means having the option to select from a range of internal and external courses (often online), including offerings from Six Sigma, Procurement Leaders and ISM. For Bob, it comes down to inquisitiveness and a love of continual learning.
“We look for logical, friendly, humble, smart and inquisitive people. Anyone with a rudimentary knowledge of supply management can be trained to become outstanding procurement leaders. Making people aware of what is possible is absolutely critical – most successful people around the world put aside time to regularly read and educate themselves. They’re inquisitive; they enquire after things.”
Two critical skills for future leaders in procurement
“Data”, says Murphy, “is omnipresent and omnipotent.” He stresses that leaders who want to thrive in the procurement profession need to develop an understanding of:
Data analytics – we can gather data but how do you use that data to gain insights?
Robotic processes – how can you automate tactical processes so human capital is used to the greatest effect?
Cognitive computing – understanding how to digitise a process end-to-end so it is interconnected and insightful.
Murphy tells Procurious that while leaders need to be able to use technology to get the insights and knowledge they need, their main focus should be on developing their emotional intelligence (EQ) rather than their IQ. “You need to have the ability to talk to clients in a consultative manner. We have one mouth and two ears, and that’s how we ought to apportion our time in any discussion. When we’re talking, we’re not learning.”
How can you train someone to be adept at building relationships? “It’s about attitude, not aptitude”, says Murphy. Whether leadership is innate or taught, the results are the same. You need to be able to work collaboratively with your suppliers, show them what’s important to you and understand what’s important to them. “Your relationship-building skills will ultimately enable your suppliers to drive innovation. For example, we have 17,000 suppliers at IBM. I want each one to wake up every morning and think: ‘How can I make IBM better’?”
Have you got a cognitive journey map?
Where is your organisation headed with cognitive procurement technology? Where do you want to be? How will you use people, processes and technology to get there? What can we automate?
Murphy recommends that every procurement team should have a roadmap that lays out the strategy for its data, analytics and cognitive journey. “All CEOs need a vision for their cognitive journey, and every function needs one too.”
According to The Hackett Group’s 2017 Procurement Key Issues research, only 32 percent of procurement organisations currently have a formal digital strategy in place, and only 25 percent have the needed resources and competencies in place today.
In reality, we can’t all be first-movers. But even if your company isn’t yet ready to act on cognitive technology, CPOs will be rewarded for raising the question, thinking through the issues and putting the challenge on the Board’s agenda. Most importantly, there needs to be milestones and deliverables, as Murphy warns: “Strategy without execution is a daydream”.
To end on a gem of a quote from Murphy, he spoke about how the constantly evolving nature of technology means a never-ending journey. “’Journey’ is a good description, because it is never finished. Anyone who thinks it is finished, is finished.”
Technology will help procurement pros to do their jobs faster and more efficiently, lessening their workload. What are the key AI trends we can expect to see in the coming months?
Nearly every day we encounter stories and predictions about how artificial intelligence (AI) will fundamentally change a variety of industries. The challenge is explaining what this type of technology could do to improve certain functions and jobs. Let’s take a look at the trends we can expect over the coming months.
Artificial intelligence will expand in analytics, intelligence gathering and visualisation
We’ve already seen speculation about the industries who will benefit the most from AI, and we’ll continue to see improvements as more and more companies adopt the technology. We will further see the expansion of the way humans in the workforce interact with AI-based solutions.
When it comes to the analysis of data, especially unstructured data, AI can be taught the nature of words and sentences and string together concepts and gists within the text. This goes far beyond the basic keyword search functions most people are familiar with. AI can then present the information to business users, and not just highly trained data scientists, in a format suitable for them. In understanding the contents of extremely large numbers of documents, AI can take a huge workload off human reviewers and help them do their jobs faster and more efficiently.
Through the use of AI, companies will have an advantage on a competitive global stage, without sacrificing the well-being of their employees, and these applications alone will be the first area of widespread use this year.
M&A activity in 2017 will rebound with a record year
Last year was a disappointing year for mergers and acquisitions. Between the broken deals with Allergan and Pfizer, Halliburton and Baker Hughes, and many more, investors and companies alike were starting to panic about the future of the economy. This year things will quickly change and we’ll be on the rebound with a record M&A year.
According to a new Deloitte report, 86 per cent of private equity and 71 per cent of corporate dealmakers are expecting to close more deals in the next twelve months. While many people feared the uncertainty of major events like Brexit, it will present a whole new opportunity for M&A deals in 2017.
Contract intelligence solutions can help to alleviate some of the challenges M&A brings. By gaining a much stronger insight into the contract portfolios of companies they are targeting for acquisition in the due diligence phase, they dramatically reduce the risk and liabilities they may be acquiring. This insight is fast and efficient, and provides significant transparency in to contract obligations while keeping the deals on track.
Contract Management – CLM will need to change
Contract lifecycle management (CLM) vendors manage contract processing through technologies such as document repositories, workflow, and authoring. It has been recognised that the utilisation and ROI provided by these CLM technologies is not where it needs to be, and they are lacking in the management of contract data. These systems provide user defined fields, and users must manually input this data to manage obligations and run analytics on key fields such as term, renewals, counterparty information, pricing and incentives. The data manage with CLM is generally inconsistent, error prone, and inefficient, and organisations with CLM systems will clearly struggle with understanding the data in their existing contacts as they go into the CLM, but also new contracts.
This year, organisations will realise CLM only solves part of the problem they are working to solve, and complement CLM with contract discovery and analytics tools — based in AI technologies. The combined solutions will create the needed efficiencies in the contract lifecycle, but also allow them to dynamically extract the data they need from contracts, when they need it, allowing for deeper analytics and increased insight into critical business relationships. The old way of data management with contracts will be considered obsolete this year, and richer analytics will become the norm.
Contracts – the “new source of Business Intelligence”
Right now, businesses spend a lot of money and time extracting insight from structured data. The current “big data” solutions process sales data, manufacturing data, financial data, social data, etc., but not the data buried in unstructured documents. Solutions exist now to analyse data from large quantities of documents and provide very valuable insight that can be used for effective decision making.
This is especially important when it comes to contracts. Instead of legal teams reviewing contracts to ensure an organisation is complying with the law or with new or changing regulations, contracts will be seen as a valuable new source of business intelligence.
Dashboards are now being created that bring together structured and unstructured data to provide new views into the business that were not possible before. Contracts will be appreciated as a new, and untapped source of business intelligence that a new generation of technology can now mine in a very intuitive and cost effective way.
This article was guest-written by Seal Software, a leading provider of contract discovery. Seal Software uses artificial intelligence and natural language processing to help companies efficiently uncover what’s in their contracts.
Futurist Anders Sorman-Nilsson warns that unless we act now, there’s a good chance we’ll find ourselves unemployed by 2030.
Sorman-Nilsson spoke with Philip Ideson as part of Procurious’ Even Bigger Ideas, a 5-part podcast series sponsored by State of Flux. You can access the series exclusively on Procurious.
Futurist Anders Sorman-Nilsson wants procurement professionals to ask themselves two crucial questions.
Firstly, think about your future career, your employability, or your entrepreneurial plans for the future. Given the kind of work you’re doing today, can a computer, an algorithm or artificial intelligence do it faster, cheaper, and more efficiently in the future?
Imagine jumping into a time machine and travelling to 2030. You step out of the machine, expecting to find yourself further up the career ladder, successful and wealthy. Instead, you discover yourself lying on the couch, watching daytime television, and no longer employable. What happened?
Roll up your sleeves and conduct a pre-mortem
Business are familiar with conducting post-mortems, particularly after a project or initiative has failed. Sorman-Nilsson advocates for “pre-mortems” instead: “Imagine that in 2030, your personal employment brand is now defunct. You’re no longer employable. What were the trends that you missed? What were the signals you chose to ignore? And what were the education investment decisions that you chose to delay that led to your personal brand’s demise?”
“Finally, ask yourself what change will you make today to prevent that outcome from happening?”
Job-stealing robots are already here
The AI disruption is happening already. Self-driving cars are a reality, machines have automated a lot of blue-collar work and AI is already impacting white-collar work. “In Japan recently, 34 humans in complex insurance claims processing were made redundant in favour of an insurance firms’ investment in IBM Watson to do those claims instead. We’re really just scratching the surface of what’s possible with artificial intelligence and computing power.”
Four actions to take today to save your career in the future
Examine your skill set and focus on where you, as a human being, might still have some kind of competitive advantage over a robot. Where can your emotional intelligence (EI) compete with, or complement, artificial intelligence (AI)? In a world where everything that can be digitised eventually will become digitised, what are the fundamental human skills that you add to a profession that’s largely about numbers?
Learn to speak digital: “You don’t need to speak Java or know the intimate details of cloud computing and data science, but you need to be comfortable in speaking digital. Digital really is the global language of business for the future.”
Embrace the gig economy: As corporates start opting for robots instead of humans, it’s time to take matters into your own hands and offer your personal brand through increasing entrepreneurship.
Invest in your education: “While we’re already experiencing fundamental shifts, we do have some time to prepare ourselves, but this means we need to really invest in our own learning, and our own agility in the way we position our skills. Aim to invest in at least one new skill every year.”
Anders Sorman-Nilsson is the founder of Thinque – a strategy think tank that helps executives and leaders convert these disruptive questions into proactive, future strategies. His latest book is titled Digilogue: How to win the digital minds and analogue hearts of tomorrow’s customer.