Tag Archives: cognitive tech

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… 

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

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

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

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

The truth is that we are not there yet.

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

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

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

Good Data

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

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

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

Here is a good primer on data collections.

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

Define your Benchmarks

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

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

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

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

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

Market Indices

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

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

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

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

Category Expertise

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

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

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

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

Closing

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Who is speaking on the webinar?

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

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

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

Can I ask a question?

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

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

4 Reasons Why Your Organisation Isn’t Embracing Cognitive

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

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

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

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

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

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

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

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

1. Remaining skepticism at the value of cognitive

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

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

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

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

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

2.  Spend within organisations is fragmented

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

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

3. Trouble looking at the bigger picture

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

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

4. Confusion about AI

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

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

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

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

Unleashing the Real Power of your Supply Chain

The human element will make or break your supply chain career. Procurious Founder Tania Seary reveals the human strengths that AI will never replace and how to leverage that competitive advantage.

There comes a time when you forget why you ever started.

I’ll never forget my first meeting as a procurement executive with a supplier. For me, it was one of those moments of illumination. I can still remember the desk, the room, (funnily enough, not the particular supplier) and how I felt. I must say, the one word that continually comes to mind to describe what I felt was … power.

Not in a newly-minted supervillain kind of way, but “power” in the sense that for the first time I really felt the tangible ability to make an impact. To tell the truth, I’d had a lot of fancy jobs up to that point – marketing for Walt Disney in London, PR for the Mexican beer company Corona, hosting trade missions for LAX, launching listed companies. But moving from one side of the table from the role of seller to being the buyer … that was a buzz. 

There’s procurement gold in them there hills!

You see, procurement 20 years ago, was – for the first time – sexy. It was on a new trajectory – its very own moonshot. It was a time for firsts.

B2B was all the rage. CEOs and Boards were ponying up millions of dollars to build fancy eProcurement solutions and invest in procurement exchanges. Procurement was coming in from the wild west and being tamed and urbanised through leveraged buying, reverse auctions and blanket contracts. Everything was a first.

MBA graduates were like blurry-eyed prospectors, rushing for the gold fields to claim their stake on their ambitious careers by making their employers a fortune. I distinctly remember asking one of my fellow Penn State classmates, “Why are you going into procurement?” He answered, “Because you can save your company millions and be a corporate superstar overnight. It’s the fastest way to the top.” In other words, “There’s gold in them there hills!”

This is where my passion for procurement started and has continued. Like the chief cheerleader, I have been singing procurement’s praises ever since.

A lot has happened in the last 20 years, but we need to ask ourselves if we’re getting today’s graduates and future leaders excited enough to join our ranks in the search for exponential value? Do they see a bright future in our profession? Because now is certainly the time!

Procurement’s new moonshot opportunity

For the first time in more than two decades, a new moonshot opportunity has emerged for our profession. Cognitive procurement is upon us.

AI and cognitive give us the opportunity to provide a quantum leap in delivered savings. The opportunity to move away from all those back-office administrative tasks that have been holding us back.

Cognitive is going to take away everything we’ve been whining about, launching us out of the transactional malaise and into the strategic stratosphere. Our role in Industry 4.0 will be to orchestrate, collaborate, and negotiate within a complex, technology-enabled global supply network.

Our future will be e-enabled, but humanity most definitely still has a place in procurement. At the odd times when Watson, other robots, and the data seems to be at cross-purposes and pointing us in different directions, we are going to have to step in and use our uniquely human skills to untangle the gridlock of competing interests to find a resolution to the supply challenge.

You see, the secret to our success in Industry 4.0 lies in something that no AI being can match – relationships, along with our ability to leave people with the feeling that they are special, important, and of real value.

As you can see, I’m so excited about the “moonshot” opportunities currently available for procurement. I’m personally energised by my work with IBM on Watson, partnering with SAP Ariba to promote Procure with Purpose and with Procurious itself growing at 25% per year with nearly 30,000 members today and on track to have 50,000 members by 2020.

But of course, in life, nothing is ever perfect.

The human element

My mother is only 71 and has advanced dementia. Many of you will relate to this story. There are lots of things my Mum can’t remember, including most people’s names, what year it is, and how old she is.

But, surprisingly, she can still remember her feelings at different points in her life. She may not remember someone’s name, but she can definitively (and accurately) describe the emotions she associates with that person.

It reminds me of that important leadership lesson: “People may not remember what you said, but they will remember how you made them feel”.

Playing to our human strengths

For me, the human element is what makes business:

  • interesting
  • challenging
  • innovative
  • rule-breaking
  • risk-taking, and
  • friend-making.

For me, the joy of procurement is the personal. It’s the unique relationships I create with people: the deals, the secrets, the preferential options. My relationships are my competitive advantage.

Up, down, and across the supply chain, it will be interactions between people that will be the real determinants of success and failure. To prosper in this next Industrial Revolution, we need to play to our human strengths – collaboration, connection, innovation, influence – the things only we humans can do.

We need to embrace our human-ness, our humane-ness, and really get connected with our stakeholders, our suppliers, our teams and our communities.

We have developed Procurious for current and future generations of “Procurers”. We want to empower our future procurement and supply chain leaders to change the face of the profession from the inside out. We’re on a mission to enthuse a new generation, putting new moonshot opportunities through the power of conversation, collaboration, and connections.

Let’s stop worrying about the future and start creating the future we want to live in.

Let’s embrace cognitive and all that Industry 4.0 has to offer. Let’s equip ourselves and our teams to really make a difference with the advanced skills AI cannot – namely the power we have as human beings – or the power to connect.

Procurious Founder Tania Seary delivered this message to inspire audiences at the Procurious Big Ideas Summit in London, SAP Ariba Live in Amsterdam, The Faculty CPO Forum 2018 in Melbourne and ISM2018 Nashville.

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

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

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

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

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

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

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

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

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

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

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

Watson Supply Chain Program Director, Rob Allan.

2. Watson Supply Chain is helping save lives

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

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

3. The proof is in the pudding.

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

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

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

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

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

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

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

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

5. Blockchain … coming soon.

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

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

Taking the plunge…

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

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

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

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

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

5 SOFT SKILLS PROCUREMENT PROS SHOULD BE DEVELOPING…NOW!

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

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

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

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

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

1. Design Thinking

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

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

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

2. Thinking at the speed of digital!

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

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

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

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

3. Active questioning and listening

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

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

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

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

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

4. Negotiation

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

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

5. Imagination

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

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

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

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

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

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

This blog was first published in October 2017. 

6 Ways Procurement Pros Can Dominate Their Data Strategy

Building a nimble process, speaking the right language and gathering your data from the right sources will have you nailing a flawless data strategy in no time!

When most procurement professionals think about data they imagine a darkened back-office room and a huddled group of silently-working number crunchers.

But it’s data that gives your organisation’s senior leaders the most important insights, helping them to win new business.

Data can help procurement climb up the value chain and earn you a seat at the table.

If could only change the time we spend gathering data and the time spent actually using it  from a 80/20 split to a 20/80 split, its potential is limitless.

And this is a mistake procurement makes too often.

Ahead of today’s webinar Basic Instinct: Are You a Data Hunter or Gatherer, we’ve outlined some top advice from data experts; Marco Romano, Procurement Chief Analytics Officer, Global Procurement, Transformation Technology – IBM and Edward D. O’Donnell, Chief Data Officer for Procurement – IBM, on how to dominate your data!

1.Build a nimble process

Ed has, in his own words, enjoyed ten years working in transformation but admits he has made plenty of mistakes along the way! His advice? “If you’re going to fail. Fail early.”

As he points out, making mistakes is not the problem, it’s the way it’s done that makes all the difference, “The most significant challenge [for procurement pros] is managing data of all size and scale.”

In the past, IBM have approached this challenge with the old-school  waterfall methodology; the development team is engaged and a plan is might be made and executed with care over the course of a year.

“It’s smarter if you can do it in more agile chunks,” explains Ed.  “The drops are not quarterly or annually for the big bang but rather maybe in weeks we’ll run sprints.”

“This allows smaller, more manageable content.” Which, of course makes a lot of sense. Why spend a whole load of money to wait for the last two months of the year to realise the value?  “Can’t we build a process thats more more iterative, more nimble, more flexible more agile?”

“Then, of course, if the client doesn’t like it we can get immediate feedback and correct it straight away.”

2. Use your time more wisely

Procurement pros have, for too long, been gathering data from too many sources because that’s what they think they should be doing. It’s time consuming and, often, it’s also futile.

“So much time spent is spent gathering data. Procurement pros need to start at the end and work backwards. First and foremost you need to ask what’s the outcome or insight you’re trying to achieve and what are the business behaviours you’re trying to change.”

Develop a joint understanding of business requirements. From that you work backwards to determine three things:

1. What data you need

2. How you acquire  it

3. What enrichment that data needs

In doing this “you’re not only gathering data that’s fit for purpose, you’re also considering business process that drives that data and building improvements into this process to ensure data quality and data consistency.”

“Of course it doesn’t stop there our role is to automate that takes gathering filtering, sorting data away from practitioners

Ideally we don’t want our practitioners spending time analysing or shipping raw data rather looking at results or process insights. but spending time

So what drives this behaviour off trying to get all sorts of data?

It’s driven by wrong metrics or misunderstanding of those metrics.

“You absolutely have to make sure you measure what really matters, such that you drive the right behaviours in data acquisition and move away from concept where people are just acquiring a whole lot of data and not able to put it to good use or understand why they’re acquiring in the first place.”

3. Gather your data from the right sources

IBM source their data from a wide variety of sources.

“We look at RFX data, procurement and customer contracts, internal client demand and pipeline data,” explains Marco.  “Internally it’s a very broad base of data which includes procurement and our clients.”

They use “market intelligence from MI providers as well as MI from structured and unstructured public data sources, social media and various other sources.”

“The data we get from suppliers  is really important and includes things like machine failure rates, product life-cycles [and ]configuration options.”

“It’s a broad base but it’s not about gathering all of that data but rather targeted to achieve a specific objective.”

Do IBM have a particularly ‘hot’ data source? “Not so much the hot data source” says Ed. “It’s the way you use that data!”

“assembling the data in a coherent way where the buyers can have it at their fingertips – assembling quickly, linking the data and then presenting it to the buyer in a new user experience is where the power comes from.”

4. Listen to your client

“Listen to the voice of the client” says Marco.

“Start with an understanding of what you’re trying to solve, really understand what the practitioners needs are and work backwards from there to figure out what you really need”

Set up engagement meetings, engage with the client regularly and continuously share and showcase your work with your internal team.

5. Focus on data quality

“Focus on data quality and ensure that your procurement processes enable the acquisition and enrichment of good quality data,” says Marco

“It sounds very obvious but it is so often overlooked and it causes tremendous frustration in the system.”

6. Speak the same language

Spending more time in front of our customers or clients and less time behind closed doors, simply gathering and analysing data, is crucial.

When procurement teams start a program it’s important that everyone is on the same page; speaking the same language and communicating regularly with all the key stakeholders.

“One of the things historically that the procurement practitioner hasn’t done so well is being completely transparent with the data,” explains Ed.

It’s important to present it in a way that “it’s clear and simple to understand [and so] that the outcomes are obvious. The best chart is one you don’t have to try to understand, where the messages are clear.”

If you’re referring to units per hour, what do you mean by units?

If you use the term FTE, does everyone know what exactly that represents? Is it a 40 hour week at x cost or a 35 hour week at y cost?

Our webinar,  Basic Instinct: Are You a Data Hunter or Gatherer takes place at 1pm BST TODAY . Register your attendance for FREE here. 

Procurement Leaders: Stop Talking About Headcount Reduction!

If you want your procurement teams to be more open to adopting cognitive solutions and less scared of them, stop talking about headcount!

BUTENKOV ALEKSEI/Shutterstock.com

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

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

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

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

On Day 4 of Conducting A Cognitive Symphony Marco Romano – Procurement Chief Analytics Officer, Global Procurement, Transformation Technology, IBM talks on the common pitfalls in the adoption of cognitive solutions, the most impactful actions procurement pros can take to increase the speed of adoption and how to overcome the fear factor!

The Fear Factor

“How the leadership works with the teams to remove barriers (operational, physical and psychological) will ultimately have a huge influence on the rate and pace of adoption of cognitive and analytics solutions” explains Marco in his white paper. 

When it comes to the fear factor, “there is no doubt that there is a concern that rich insightful analytics will show opportunities that imply the practitioners have historically failed in their jobs.

“There is also no doubt that there is fear that cognitive solutions could replace some of the activities currently carried out by practitioners.”

One factor that causes this fear is the “poor messaging on why you want to commit these tools, and what the desired outcome is which creates fear and resistance, to adoption and change.”

How can organisations manage their employees fear to ensure the adoption of cognitive solutions isn’t impeded?

Stop talking about head count!

When procurement professionals look at something that brings new information and insights that haven’t been available before, it leads them to question a number of things:

  • Is it a challenge to what I’ve done before?
  • Is it a challenge to the accuracy of what I’ve done before?

and, ultimately:

  • Is this technology going to make what I do now redundant?

“Fear is something that we see. CPOs are constantly talking about robotics, automation, right?”

“And very often, I hear head count being brought into the discussion, Head count reduction being brought into the same discussion with cognitive analytics, and whilst that might be the eventual outcome, I think it’s a dangerous way to enter into the dialogue”

“If that is the primary driver, to reduce head count in the organisation, I find that very often that’s reflected in your metrics. It’s reflected in the behaviours. And in turn, it’s reflected in poor adoption, and resistance by practitioners.”

“You’re creating that fear of job security. And invariably, I find practitioners push back, and they’ll find they spend their time trying to justify why a tool won’t work for them.”

“To overcome this you need the right methods, but secondly, and very importantly, I think you need to provide practitioners with the road map on how to change, and sharpen their skills in this changing environment.”

Educate your teams

Procurement professionals need to have an understanding of the strategy and impacts new solutions will have.

You need to be able “to show the practitioners how the change benefits them, not just the enterprise” Marco explains.

“And this sounds really basic, but it is so important. [You need to be able to show them]  I’m going to help you spend less time on those lower value, tedious, time-consuming tasks, allowing you to focus on the higher value activities.  Most professional practitioners that I know, prefer to spend their time on those higher valued tasks -negotiating with suppliers, rather than crunching numbers”

That’s the first thing. But the second thing  is, providing them education and training, on this new data skill set. I think you very quickly erode that resistance. They see a path for them, within the enterprise, within the organisation, but you’ve given them a marketable skill, which in turn removes resistance and fear.

“I’m not talking here about turning practitioners into data scientists. I’m talking about arming them with knowledge about how they impact data, teaching them the art of the possible, with regards to how technology can help them to be more effective consumers of that data, and insights.”

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

How To Conduct A Cognitive Symphony

If cognitive technology is not normally your forte, let us be of assistance. In one week we’ll have you conducting a cognitive symphony! 

furtseff/Shutterstock.com

There are many factors that require careful consideration to bring about effective, scalable and sustainable analytics and cognitive solutions.

Intelligence is the conversion and enrichment of data into meaningful business insights.

It’s akin to conducting a group of musicians – it might be easy to get a pleasant sound from a solo instrument but, if expertly managed, you can avoid falling flat and accomplish a symphony from the entire orchestra!

Conducting a Cognitive Symphony

From the 26th February let Procurious and IBM guide you through the five steps required to conduct a dazzling cognitive symphony as we present a new five-part podcast series. 

Day One: Building Your Orchestra

Procurement process and acquisition of data need to evolve to meet data needs. How should procurement teams embark on their knowledge journey to Cognitive and analytics transformation?

Day Two: Orchestrating Your Melody

It is not sufficient to know that you are buying software or how you are buying software; you need to know what software you are buying. So how do you implement an effective taxonomy strategy?

Day Three: The Rehearsal Room

Automation is a buzzword of the moment and fast becoming a business necessity. How can procurement professionals achieve a happy balance and effectively implement transaction automation.

Day Four: Getting the brass on Board

How procurement leaders works with their teams to remove barriers will ultimately have a huge influence on the rate and pace of adoption of cognitive and analytics solutions.

Day Five: The Conductor

In a fast-paced and ever-changing environment, some instability and churn is inevitable, which is why all these data instruments need a decent conductor and a single data strategy.

Podcast Speakers

Marco Romano Procurement Chief Analytics Officer, Global Procurement, Transformation Technology, IBM

Marco applies more than 15 years of experience as a procurement practitioner and project manager to understand complex environments that separate the noise from real issues and determine near-term and strategic solutions in realising business value. He leads a team that has saved IBM Procurement a significant amount in third-party costs and efficiencies through analytics data solutions and innovative sourcing strategies over the past three years. His team is also developing commercial analytics and cognitive procurement offerings leveraging data and technology for IBM clients’ competitive advantage.

Anna Madarasz Analytics & Cognitive Lead IBM

Anna has 14 years of procurement experience, out of which 12 is in project leadership. She is a master at change management, and loves working in a complex, cross-functional environment. She is an expert at procurement taxonomy in support of increasing companies’ negotiation power. Anna is a certified Lean Six Sigma Black Belt.

Peter Hrabovski Analytics and Automation Lead, IBM Global Procurement

Peter is the leader of the Analytics and Automation organisation at IBM Global Procurement. He has a masters degree in economics, in the field of business and administration. He has more than 5 years of experience in managing the data analytics and robotics process automation teams in IBM procurement globally. Being a technology and data enthusiast his focus is on applying the latest technologies in solutions being developed. This enables procurement in delivering exceptional value to IBM and its clients.

How does the podcast series work?

This series will run for five days with a daily podcast released from 26th February.  Each morning, we will deliver the new podcast straight to your email inbox.

If you’re a little late signing up to the series, don’t panic! We’ll still be sure to send you all five podcasts so you can listen at your leisure.

How do I access the podcast series?

Simply register for the series via this link and you’re good to go!

From the 26th February we’ll deliver a podcast straight to your doorstep.*

*straight to your email inbox!

Are the podcasts available to everyone?

Anyone and everyone is welcome to sign up and it’s totally, 100 per cent free to do so- simply sign up here and we’ll handle the rest.

From 26th February, Procurious present a new five-part podcast series – Conducting a Cognitive Symphony – sponsored by IBM. Sign up here (it’s free!) to access the series. 

Taking The Heat Out Of The Resolution Room

If you can’t take the heat get out of the resolution room! Or invite Watson! 

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We’ve all been there. Something’s gone terribly wrong with a major customer delivery. Emails are flying around and there are rumours from HQ that “heads are going to roll”.  Everyone concerned has been summoned to “THE meeting” in order to resolve the supply chain issue.

We know what happens next; fists slamming, red faces, an embarrassing lack of data and a lot of verbal ping, pong. Eventually, a resolution is found.

But what happens when Watson is in the resolution room? Could this take the heat out of your supply chain disputes?

 What is a Resolution Room?

A Resolution Room provides the organisation the ability to collaborate quickly to resolve supply disruptions. Users can discuss and resolve issues with other colleagues, business partners, or their suppliers. What distinguishes Resolution Rooms from all other collaboration platforms is Watson.

What does it mean to have Watson in the resolution room?

The big benefit of Watson being in the resolution room is that it recommends experts, provides insight from all data and actionable advice based on learned best practices.  Over time, it leverages Watson’s capability to develop a body of knowledge by learning how issues were best addressed in the past.  This enables greater speed and accuracy in responding to future events.

“Watson provides the opportunity to deliver business value and insights from all of these data insights – structured and unstructured, data from weather patterns, news, D&B and supplier IQ,” explains Joanne Wright, Chief Supply Chain Officer, IBM.

“It does this with speed and accuracy. No more are we saying ‘OK…let’s get the data and meet again tomorrow’ because Watson takes my team’s input and incorporates that into the next iteration as we go.”

Watson In The Resolution Room: A Case Study

IBM Watson is always a room participant, so you can draw on Watson’s expertise using natural language to ask a question, for example: @Watson what is the status of order ABC123?

Imagine the following scenario; A Late Shipment alert in the Ops Center reveals that orders of your most popular drone are in jeopardy because the shortage of the entire supply of a critical part, a lithium battery, has been delayed. You create a Resolution Room to manage the incident collectively.

Watson is in the room.

Whilst your team discusses how best to manage the problem you have the ease of asking Watson questions such as:

  • Which customer has the most sales dollars that will be late?
  • What are the financial impacts of any late orders?
  • Have we experienced this problem before? Who are the experts who have worked on these similar issues in the past?
  • Are there any alternate suppliers for part number 46001?
  • Why is there a shortage of lithium batteries?

Watson can provide answers to questions such as these based on the data available in the data model and in other Resolution Rooms. Learning over time, it becomes smarter and able to provide better insights about your supply chain.

Click here to try a Resolution Room demo. 

Got a big idea you want to push through a big company or simply want to learn more about Watson and the Resolution Room?

Sign up for next week’s procurement webinar, How IBM Built the Cognitive Supply Chain of the Future. hosted by Tania Seary and featuring IBM’s Chief Supply Chain Officer Joanne Wright.