Tag Archives: cognitive technology

Cognitive Technology – One Giant Leap for Procurement?

Technology has helped to define the human race, from the invention of the car to the moon landings. Cognitive technology is one small step on the journey into the future.

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Register as an online delegate for the London Big Ideas Summit 2017 here.

In 1961, US President John F. Kennedy said, “We chose to go to the moon.” People marvelled at the ambition of pushing the boundaries of human capabilities. After all, the technology to do this didn’t exist at the time.

Kennedy never lived to see his prediction come true, and watch as humans took that giant leap forward. Now, in the 21st Century, we come to the next advancement – cognitive technology.

It’s easy to compare the cognitive technology journey to the space programme and moon landing journeys of last century. For IBM, developing and deploying Watson is like the moonshot in the 1960s where IBM technology helped NASA make the lunar landings possible..

Cognitive technology is merely in its infancy in terms of where it can go. This journey will mostly likely take 50 years or more to be fully realised. And at the moment, we’re just in Year 1.

Millennials Will Help Take This Step

Procurement is starting its own cognitive technology journey and Millennials have the chance to be there at the outset. They will see cognitive technology evolving and developing throughout their whole career.

But first they need to know how to get on board and enjoy the journey.

At the same time, procurement professionals, and the wider workforce, are wondering what cognitive technology means for them. What’s left for procurement when cognitive systems like IBM’s Watson is the smartest guy in the room?

Without adapting and preparing adequately, procurement could easily be marginalised. But if CPOs lead from the front, identify the activities that only procurement can do, then procurement’s road will be much less rocky.

Now is not the time to be overwhelmed by cognitive technology, but to be educated. And to do this, we need to understand the key skills procurement professionals need to focus on to start preparing for the cognitive technology revolution.

Barry Ward, Procurement Brand Manager, Global Business Services at IBM, talks about five key skills below.

1. Watson Awareness

First things first, procurement professionals need to be aware of cognitive technology, and Watson, and what it can do for them.

The reality is that technology can change a job in four ways – eliminate, automate, empower, create. Far from being fearful for their jobs, procurement needs to embrace the change, and use it to enable the profession.

Traditional procurement processes such as cost optimisation, spend management and contracts can be empowered by Watson. Things that used to take days will now be done in a matter of minutes.

Watson can enhance these processes by analysing vast quantities of data, helping to improve the decision-making process. Through this, financial benefits can also be realised in this outcome focused structure.

Ward advises that professionals start with the categories that they manage, and understand how AI can be introduced (IBM refer to AI as Augmented Intelligence, using technology to enhance human knowledge and capability). Then it’s a case of learning as you go, and sharing knowledge with others to work collaboratively and to fully exploit the capabilities that the technology can bring

2. Relationships 

Cognitive technology may make computers super-intelligent, but it doesn’t mean consciousness or awareness. There will always be a need for the human touch in management of stakeholders.

In fact, as technology helps free up time for procurement to focus on strategic tasks, building relationships will become more critical than ever. For example, good supplier relationships will help procurement be more agile, ensuring they stay ahead of stakeholder needs.

Data can only take procurement so far. The rest is down to procurement doing the relationship work we always have done. Only now we’ll have more time to do it, and more information to help enhance the relationship.

3. Negotiation

As with relationship management, traditional procurement skills such as negotiation will also still be key. Watson can give recommendations for how to proceed, but ultimately it can’t make decisions for you. And you’ll always have the ability to correct it too.

However, Watson can help with providing data to enhance the negotiation itself. The system can give details on the person you are negotiating with, and help cut down the preparation time.

For example, if you were negotiating with Barry Ward, and you had done so in the past, Watson would be able to tell you what these previous experiences were like. Like what Barry does in certain circumstances, for example.

There’s less dancing around, you can get straight to the point, all of which saves you time. Plus, you’ll probably get a better deal out of it too!

4. Understand your organisation’s cognitive technology journey 

Find out what your CIO or CTO is doing, and what their plans are for the organisation in terms of cognitive technology. You can ask what the digital transformation will look like, and then think about how to prepare, or even influence, it.

Professionals can assess their own category, and establish what cognitive solutions are available in the market place. The key is learning how cognitive technology might specifically benefit your area.

For example, if you are travelling and your plans change, cognitive technology can assist. All you do is put the details into your phone, and the technology will assess the change, look at your airline and hotel preferences, and then present a plan, complete with cost, for your approval. All without lifting a finger. In truth, these systems are probably a couple of years away yet, but they will fundamentally change the way some categories are managed.

5.  Be Data Savvy

Finally, professionals need to be savvy in terms of knowing what cognitive technology can do for them in terms of data. As we have said, Watson is capable of handling structured and unstructured data, photos, contracts, documents, and even audio files.

The system can make sense of the data, and provide solutions based on combinations of data you’ve never even thought of. The quality of decision-making is improved, and previously unattainable insights are freely available.

We are only just discovering the possibilities that technological advances will bring but it is clear that digital transformation will open up huge opportunities for us all. This will be an exciting time to be in Procurement !

Barry will be  explaining the big ideas behind Watson and the opportunities that cognitive tech presents to procurement at  Big Ideas 2017. Register as a digital delegate.  

A Whole New World: The Cognitive Computing Era

The age of cognitive tech is coming, whether procurement likes it or not! How can we be ready for the changes coming our way? 

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Register your attendance for our free webinar, Man & Machine, which takes place on 8th February 2017. 

A New Era Of Computing

 We’ve entered into a new era of computing: “the cognitive computing era”, which follows the eras of programmable and tabulating systems and represents a massive jump forward that will transform how enterprises operate.

This new era is defined as such because there is a fundamental difference in how these systems are built and how they interact with humans. Traditional programmable systems are fed data, knowledge, and information, and they carry out and return results of processing that is pre-programmed. In this case, humans are doing most of the directing.

Cognitive technology is different; it accelerates, enhances and scales human expertise to solve more complex problems by understanding language and interacting more naturally with humans. It can reason to find patterns and form hypotheses, making considered arguments and scenarios planning. And this is exactly what Watson is about.

Watson is a cognitive technology that can think like a human and is available as SaaS products and a set of open APIs (Applications Programming Interface) such as natural language classifier, speech to text, text to speech, visual recognition, etc.

What Does Watson Mean For Procurement?

This disruptive technology, by creating a new digital ecosystem, is pushing Procurement to create a new business model, moving away from objectives centered on cost take out and taking a new customer centric and revenue growth approach. CPOs must employ the right strategy, structure, skillset and cognitive technology if they want to be in a strong position to demonstrate their relevance and value to the organization.

Procurement organizations and their leaders need to embrace the reality and potential for Artificial Intelligence (AI) and cognitive procurement as readily as they would accept other technologies and developments. AI will bring changes and challenges but it will also bring amazing opportunities for the profession.

As we apply AI to certain procurement tasks and processes, we will begin developing internal capability and expertise.

Applying Cognitive Tech To Procurement

Cognitive technology has already proven to be particularly helpful at helping procurement with a number of specific tasks and programs. These include:

  • Quickly sorting through very large amounts of structured or unstructured data. This is especially useful for benchmarking and supplier analysis
  • Providing very detailed supplier assessments of a single supplier, a group of suppliers or the whole supply base
  • Providing in-depth risk assessments, identify hidden risks, and calculate rate risks
  • Supporting and validating decision-making during supplier selection

More generically, cognitive computing will undeniably be a key ingredient to innovation, helping to find new ways of operating, providing new insights, uncovering new opportunities and last but not least it will elevate procurement professionals to the well-deserved advisor role by extending their capabilities and growing their experience.

How Can Procurement Prepare For The Changes That Are Coming? 

The question that so many procurement organisations are asking is how can they make cognitive tech a reality and where to start?

Adopting and integrating cognitive solutions into an organization is a journey and not a destination.

Firstly, CPOs need to be clear about what matters the most. In order to grow their company’s business and best benefit from the technology, they must set realistic expectations and develop long-term plans with incremental milestones

Secondly, transformation doesn’t happen by itself. It requires the vision and support from the top. As an example, Bob Murphy, IBM’s CPO, is the biggest driver of change in terms of transforming his organization. He saw the potential in cognitive technology and the prospects for Procurement and became an evangelist within the team; encouraging, sponsoring and demanding we embrace this opportunity.

Thirdly, leveraging big data is a key area to take advantage of, especially in data management. This ensures that organisations have the right structure and strategy. At IBM, we have appointed a Procurement Data Officer and also hired data scientists within the procurement team as we understood that procurement needed to take a more active role in extracting and analyzing data to demonstrate its value especially by leveraging the data we are managing and generating. (i.e data in RFP answers, ….)

The Race Is On – Can Procurement Shape Up In Time?

With cognitive technology, procurement teams will be equipped with the tools to navigate the procurement process quickly, easily and more compliantly. This will allow more time for procurement teams to focus on strategic supplier activities after contract signature, such as performance management or supplier collaboration and innovation programs. But is the function ready for this shift?

Embedding such advanced technology requires some serious changes in skills and competencies within our teams. Procurement leaders will have to search for procurement professionals not only focusing on their core competencies, such as category expertise, negotiation skills or market knowledge, but it will be more and more important to hire people with the “right” soft skills. The function must onboard and retain people with excellent relationship management and analytical skills and with a high aptitude to work with advanced technology and financial acumen.

The procurement landscape will have to reshape to a more business leading capability that has to operate in a much more virtual and networked environment where emerging roles of data scientists, business relationship managers and innovation scouts, to mention a few, will be increasingly required.

In short, beyond just being capable of creating visible savings, the role of the procurement organisation will have to shift its focus beyond cost reduction efforts, and move towards a trusted advisor role; accurate, fast and efficient.

There’s no doubt about it, late adopters of the digital transformation or organisations failing to take into consideration the growing exigencies such as speed, value for money, collaboration will be soon perceived as road blockers rather than enablers.

Join Procurious’ free webinar, hosted by Tania Seary with Manoj Saxena, Pascal d’Arc and Nathalie Fekete to make sure you’re ahead of the cognitive technology game. 

 

 

The Coming Backlash Against Artificial Intelligence and How to Handle It

How can organisations use AI’s potential to augment, not abolish jobs?

This article first appeared on Manoj Saxena’s LinkedIn profile. 

Artificial Intelligence (AI) is rapidly moving from a mesmeric technology to a powerful teammate and a foundation for enterprise and consumer decision making.

However, AI is a young field full of amazing potential. It’s mystery and lack of understanding is also allowing for hype to grow unchecked. Unrealistic claims by advertising agencies of large technology companies of an “AI nirvana” and portrayals by Hollywood movie producers of an “AI apocalypse” are creating a hype machine that is unparalleled in recent history. The reality is somewhere in between these two extreme scenarios.

Every transformative tool that people have created – from the steam engine to the microprocessor – augment human capabilities and enable people to dream bigger and do more. It also creates massive job dislocation and AI will be no different. Except this time around it will impact not just the blue collar jobs but also white collar jobs such as this Japanese Insurance company replacing insurance workers with AI. 

Lost within all of this hype and fear is perhaps the greatest benefit I see as an entrepreneur, a senior technology company executive, and an investor – the potential for AI to do good for business and for society.

Done right, AI has a massive potential to make our business and our society much more efficient in terms of how we use our scarce natural resources and make a living. Research from Accenture estimates that artificial intelligence could double annual economic growth rates of many developed countries by 2035, transforming work, and foster a new relationship between humans and machines.

Machine intelligence, which is a sub-set of AI, will power and create efficient, real-time adaptive businesses. A “Cognitive Business” that makes sense of all available data and rapidly transforms how it engages it customers at the edge and deploys self-learning, self-assuring business processes at the core.

It will greatly help businesses that are drowning today in Big Data analytics and machine learning science projects but are starving for actionable insights and agility. Despite significant investments in customer big data, business intelligence, machine learning, and cognitive computing, these businesses are struggling with three problems:

  1. Too much data and too little insight
  2. Poor linkage between insights discovery and business action
  3. Scarce learnings from actions taken

Going forward these businesses will deploy AI powered cognitive cloud platforms to augment every user experience and business process. These Augmented Intelligence platforms will pair humans and machines so they can achieve something new and exponentially valuable together: intelligent user engagement and business processes that get smarter and more useful with time.

By emulating human cognitive abilities in software such as memory and sequencing, perception, anticipation, problem solving, and decision making, Augmented Intelligence Platforms will help make sense from messy, disparate first and third party data. They will then use the hidden meaning within all data to engage a human being by providing the right advice, at the right time, with the right evidence across any contact point.

These new class of technologies will create a new range of “new collar jobs” to design, model, build, test and manage these systems – much like the Internet and the world wide web created a new class of jobs in the late 1990s.

Keen to learn more about cognitive technology and the impact it will have on procurement? Join our FREE Webinar, Man & Machine, on the 8th February. 

What is the Future of Knowledge Management in Procurement?

Knowledge management is becoming critical for organisations as the current generation retires. So how can procurement leverage technology to ensure knowledge isn’t lost?

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Introducing Watson Supply Chain from IBM. Get to know Watson here.

“Knowledge is power,” proclaimed Francis Bacon, the English philosopher whose advocacy of the scientific method fuelled the scientific revolution. Centuries later, Dale Carnegie, the American philosopher and writer, and perhaps the father of corporate training, responded, “Knowledge isn’t power, until it is applied.”

Bacon’s and Carnegie’s time may have passed – our economies and businesses are exponentially more global and complex – yet, their words still ring true.

Trends Influencing Talent and Knowledge Management

For a global business, managing procurement essentially means tackling the enormous challenge of managing information and knowledge. Today’s complexities emanating from globalisation, dispersed workforces, and massive amounts of data make information and knowledge oversight critical.

Further, demographic and talent management trends make the issue even more pressing:

  • Key personnel are retiring

Baby boomers, the experienced core of procurement and supply chain teams, are retiring at a record pace. Replacing their knowledge and experience is a hefty task.

  • Replacements are inexperienced

The millennials who make up the bulk of new hires, although tech-savvy, often lack procurement and supply chain experience and knowledge. They also are hard to retain – averaging less than two years in their positions.

  • Teams are expanding

Procurement teams are expanding in line with the maturation of the profession and the greater, more strategic responsibilities and objectives put on procurement organisations.

  • Teams are dispersing

Further, with globalisation and growth, procurement teams are increasingly decentralised and located globally, making it harder to pass knowledge and expertise through day-to-day personal interactions.

Amidst these trends, how do you retain, build, and share procurement and institutional knowledge not just within the organisation – but across the globe and across systems?

Technology Trends and Evolution

This is all occurring at an interesting time from a technology standpoint. Procurement has seen technologies evolve over the past 20 years from point solutions, such as spend analysis and sourcing solutions, to suites that span the entire procure-to-pay and source to-pay process as well as the larger strategic supply management process.

This really has been an evolution focused on ever-greater automation and connectivity across the global procurement organisation. Increasingly, their goal is to centralise procurement and supplier data for the sake of efficiency and to get the entire enterprise on the same page.

It’s led to tremendous advances in sustainable savings, risk mitigation, and supplier management and innovation.

Now we’re at another technological inflection point. From the procurement point of view – and talent management point of view – it’s coming at an excellent time.

That next big evolution is cognitive solutions. Or, as it’s also popularly known, artificial intelligence.

The Emergence of Thinking Technologies

Cognitive technologies are now being regularly used by forward-thinking procurement organisations at Fortune 1000 companies to tackle specific tasks, such as assessing risks or profiling suppliers.

In the months and years to come, these cognitive technologies will be weaved into procurement and supply chain enterprise solutions. Cognitive technologies go beyond information management and process automation; they are solutions that can understand, reason, learn, and interact like a human.

They can analyse data, both structured and unstructured, from internal and external sources, at enormous scale and speed. This allows for deeper analysis and insights.

Cognitive technologies are an evolution of the first order. They are more in line with the advent of enterprise software, mobile phones, or the Internet, than the progression from point solutions to suites.

IDC estimates that, by 2020, 50 per cent of all business analytics software will incorporate some cognitive computing functionality.

Additionally, the Pew Research Center notes, “By 2025, artificial intelligence will be built into the algorithmic architecture of countless functions of business and communication, increasing relevance, reducing noise, increasing efficiency and reducing risk across everything from finding information to making transactions.”

How do cognitive technologies impact talent and knowledge management?

From a knowledge management perspective, cognitive solutions enable an organisation to retain institutional and supply chain information and experience. They offer the power to elevate personnel by providing thinking solutions that inform, speed, and improve day-to-day actions and decisions.

These solutions can extend or expand the knowledge of global personnel.

With cognitive technologies, knowledge sharing becomes automated. For example, a new millennial team member – in Mumbai, Shanghai, or Austin – can access the professional knowledge of a 20-year procurement veteran. Or a procurement professional who has worked his or her entire career in Boston can tap into specialised knowledge about markets, practices, and suppliers in Brazil.

Cognitive solutions provide personnel with deep insights and experience, collected over time, drawing from sources inside and outside the organisation. These technologies learn and operate by organisational preference – developing a “supplier playbook” – and can provide actionable recommendations to personnel. Further, cognitive technologies can foster collaboration across the company and with suppliers.

In sum, cognitive technologies elevate and empower both individual employees and the entire team.

Indeed, we’re amidst a knowledge revolution – where procurement personnel proactively advise the business, offering smarter insights, deeper analysis, and greater strategic value.

If knowledge is power, organisations are risking losing power if they don’t have effective knowledge management processes. But technology, such as IBM Watson Supply Chain can help retain this knowledge and pass it to the next generation. Find out all your need to know here.

Escaping Groundhog Day with Corporate Knowledge Capture

Can cognitive technology revolutionise the way we capture corporate knowledge?

Introducing Watson Supply Chain from IBM. Get to know Watson here.

Do you ever feel like you’re stuck in the nightmare of a supply chain groundhog day? One minute you’re gaining some solid ground in your organisation and the next… You’re back at square one, looking likely to make the same mistakes over and over again, trying in vain to get things right.

Capturing the Knowledge

Groundhog day is the reality for procurement and supply chain professionals who don’t adequately and methodically capture corporate knowledge.

  • When an individual leaves your organisation that doesn’t mean that all their knowledge should leave with them.
  • The tribal knowledge residing in your supply chain shouldn’t be reliant on key individuals keeping it there.
  • All of your supply chain decisions should be mapped out.
  • If your team makes a mistake you should be learning from it, not repeating it.
  • Knowledge capture should be an ongoing, continuous process and not something that is attempted, under pressure, at the point of employee exit.

There’s no question that retaining corporate knowledge is good for business. It helps facilitate the creation of new knowledge, it saves time and effort, positively affects your relationship with suppliers and customers and encourages new innovations.

Corporate Knowledge Capture is also great for new employees who can learn quickly and resolve problems more efficiently. That’s not to mention the benefits of leveraging the accumulated experiences of employees both past and present.

Social Capture and Collaboration

Organisations have employed various techniques to retaining corporate knowledge.

One approach is to use social intranet software that acts as a social collaboration platform. These provide a space where you can capture information, share data and communicate better with colleagues, suppliers and customers. Services such as Yammer and Jive have helped to increase efficiency and enhance information flow.

Other organisations have their own internal intranet, which serves the same purpose.

The problem with either of these options is that they are both laborious and time consuming. They depend on your knowledge base being regularly updated with the newest information as it becomes available in order to offer maximum value.

Employees will also be relied upon to review information and update the content. It might sound like reasonable expectations in theory but, in practice, it’s hard to maintain. New approaches are needed which are proactive as opposed to reactive.

Along Came Cognitive Technology

Fortunately, the ways that we capture knowledge are changing and evolving with technology developments, making it easier than ever before to do so. Cognitive Technology is today’s game changer in many ways and one of them is the impact it could have on corporate knowledge capture.

It can think, learn, and generally mimic human intellect. IDC estimates that, by 2020, 50 per cent of all business software will incorporate some cognitive computing functionality.

With regards to knowledge retention, cognitive tech can modify and document specific and analytic knowledge in a manner that others can re-use and adapt it for their specific use.

It can make intelligent decisions about where inventory should go, but also how it gets there.

It will also add information to the puzzle on warehouse space capacity, trailer loads that are going LTL, and ultimately, the best route not only based on cost or labor, but all of the extraneous details that aren’t apparent at the onset of an order.

Decisions will no longer be made that leave out key stakeholders by accident. Cognitive tech will recognise recommended participants for conversations and bring them together for troubleshooting in one place.

Balancing supply chains is a never-ending puzzle. As the complexity grows, communication and knowledge retention becomes of the utmost importance. How can Watson supply chain help to enable more intelligent decisions and guide leaders to make strategic moves? Find out here.

Getting Ahead of the Cognitive Technology Wave

There’s a paradox in artificial intelligence and cognitive technology. They can help us stay ahead, but also be the cause of major disruption.

Introducing Watson Supply Chain from IBM. Get to know Watson here.

“The future always comes too fast.” Those are the words of Alvin Toffler, the best-selling author and futurist known for his works examining the impact of technologies.

It seems paradoxical that the technologies that help us stay competitive in today’s global business environment can also disrupt industries.

For example, if your career spans 25 years, you probably have some personal perspective on this disruption. We’ve seen the Internet, enterprise software, and mobile phones emerge and evolve – and now could never imagine doing business without them. They’ve not only transformed our businesses and industries, but our lives and our world.

Some technologies cause ripples, some cause waves. Some businesses and industries benefit from the resulting changes, and others fall behind. A few businesses see changes on the horizon and take action. Yet others get swept up in the tide.

The Next Wave: Cognitive Technology

What’s the next wave? The next game-changing technology on par with the Internet, enterprise software, and mobile devices? Many analysts point to artificial intelligence, also known as cognitive technology.

Cognitive technologies are no longer the realm of science fiction. According to TechRepublic (ZDNet), technology and economics are aligning in a way that puts us at “a tipping point after which the use of artificial intelligence will become commonplace.”

IDC estimates that, by 2020, 50 percent of all business software will incorporate some cognitive computing functionality.

Also, the Pew Research Center noted, “By 2025, artificial intelligence will be built into the algorithmic architecture of countless functions of business and communication, increasing relevance, reducing noise, increasing efficiency and reducing risk across everything from finding information to making transactions.”

The Thinking Technology

Cognitive technologies actually understand, learn, and think through any objective, problem, or question you present, and then offer detailed answers, analysis, or solutions. They reason and learn like a human, but at enormous scale and speed, providing deeper insights and intelligence.

Cognitive technology presents a tremendous opportunity to business and procurement. For example, with cognitive technologies, procurement organisations can provide very detailed supplier assessments in just minutes, drawing from a wide range of data sources.

Additionally, they can provide much more in-depth risk assessments and uncover previously hidden sources of disruption and risk. And procurement can become more adept at innovating, providing the business new insights and opportunities.

In sum, cognitive technologies can unlock unimagined new insights, enable enhanced decision making, and deliver highly optimised outcomes and value.

Opportunity or Disruption

The opportunity for cognitive technology is tremendous, but organisations need to look ahead and prepare. Procurement leaders should start thinking how cognitive technology will transform roles and organisations. They must re-skill their team with talents that enable this shift.

Perhaps the best ways to do so are to start cognitive projects in certain key areas. Think about what projects or processes in your organisation could most benefit from cognitive technology.

As you apply these technologies to certain tasks and processes, you’ll begin developing internal capability and expertise. And you’ll begin to enhance the skill set of your professionals.

Another way to prepare for the cognitive future is to develop and hone data analytics skills and projects. Even in the absence of perfect systems or perfect data, analytics programs can provide tremendous value.

Levels of procurement and analytics maturity can vary and evolve over time. However, analytics can immediately play a key role in enabling procurement transformation and success, across a number of areas, including:

  • Savings and value creation;
  • Risk mitigation; or
  • Supplier development and innovation.

Research shows that the most successful procurement organisations take a more comprehensive approach to analytics technologies. And such programs build the foundation for application and success of cognitive technologies.

The future is always just around the corner. But some waves of technology innovation are bigger than others. Cognitive, by all accounts, is one of those big waves.

For those who fail to prepare, it guarantees disruption. For those who take the reins, it presents tremendous opportunity.

What if you could see the supply chain road ahead and mitigate risks before they become obstructions? For procurement, this helping hand can come from IBM Watson Supply Chain. Find out all you need to know here.

Big Ideas Summit 2016: Big Idea #3 – Harnessing Cognitive Technology

Barry Ward says that the procurement technology landscape is fundamentally changing and moving towards the use of cognitive technology, impacting the skills required in procurement in the future.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Barry Ward, Procurement Brand Manager, Global Business Services at IBM, believes that, in order for procurement to successfully demonstrate the value it adds to organisations, it will have to bring in the right people, with the right skills, to allow it to harness the power of cognitive technology.

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,000 like-minded procurement professionals from across the world.

Silo Busting: Using savings management to drive collaboration

In a perfect world, savings management should follow a clear pattern: set targets, identify then prioritise initiatives, track initiatives and, finally, review the targets. However, managers know that in reality, these five steps are beset with difficulty. They have to deal with unknown targets and goals, manual inputting, approval difficulties, siloed projects, sporadic monitoring and, worst of all, focus on the wrong projects.

chompoo/Shutterstock.com

How to bust silos when nothing seems to work

Many of the woes besetting procurement professionals can be traced back to organisational silos, which hamper effective communication, hinder compliance, and impede transparency. You’ve tried everything to improve collaboration – from issuing company-wide news bulletins, increasing the number and frequency of interdepartmental meetings, and even drastically altering the seating arrangements … but sometimes, silo-type behaviour is just ingrained. No doubt, you have wished there was some sort of silver bullet that will do away with silos once and for all.

According to SciQuest’s Karen Sage, there is. Sage is excited about launching a new solution that will bring everyone on board with procurement savings initiatives. “Our new Portfolio Savings Manager (PSM) is really going to hit those organisational silos hard”, says Sage. “It encourages interaction, creating cross-collaboration within the business. You’ll have all of these different silos working together on your procurement savings initiatives, and those frustrating savings management difficulties have been ironed out into a seamless and efficient process.”

SciQuest has been in the spend management space for a long time – 20 years, in fact – and services a wide range of industries and organisations including many of the Global Fortune 500. Customers using SciQuest’s Source-to-Settle Suite wanted a way to track projects in a single interface that incorporates multiple aspects of the procurement process, whether it be savings tracking, project management or workflow management. The company responded with the creation of the innovative PSM, which can be used as a stand-alone product, but its full functionality is revealed when integrated with the existing Source-to-Settle Suite.

The cross-functionality of PSM enables team members in any department, from sourcing and procurement to finance and operations, to:

  • identify potential savings and process optimisation projects
  • approve and prioritise initiatives
  • assign tasks and allocate resources
  • track milestones and results, and
  • monitor progress against forecast and budget.

The system is a project-manager’s dream, automatically determining milestones and tasks required to complete initiatives and allocate resources. PSM replaces tedious manual processes such as spreadsheet inputting, project tracking and database updating. It captures strategies and savings initiatives from inception to realisation, forecasting, scheduling, tracking and reporting savings. Users benefit from historical project and savings visibility, without having to dig into the database or spreadsheets for lost information.

Savings management made simple in five steps

 PSM users follow an intuitive five-step process, with a focus on simplicity throughout:

1. Identification

Users are guided through the completion of a savings initiative creation with the aid of a left-side navigation section that indicates counts and completeness.

  1. Authorisation

Approval workflows are applied to the initiative based on business compliance requirements.

  1. Prioritisation

The user assigns a priority to each initiative on a scale of 1 to 10. Priorities can be adjusted to reflect current business and resource parameters.

  1. Execution

Deliverables and tasks assignees can update their tasks status, mark them in-progress, complete or reset the due date.

  1. Achievement

Reports and graphs are automatically generated and displayed on customised dashboards.

Having the right system in place enables procurement professionals to stop spending valuable time trying to persuade unwilling cross-departmental colleagues to collaborate. Concentrate instead on getting everyone interacting with your new system, see the silos melt away, and watch the savings flow.

SciQuest’s Portfolio Savings Manager will be available for purchase in July 2016. For more information, please visit www.SciQuest.com.

Smarter relationship management with ClientLoyalty

Procurious caught up with Kent Barnett, Chairman and CEO of ClientLoyalty at ISM2016, Indianapolis USA.

CPOs worldwide recognise the need to keep track of supplier relationships to reduce costs, minimise risk, and uncover opportunities to grow their businesses. Voice of the supplier surveys are common, yet the technology employed is often archaic. Typically, stand-alone web-based surveys are sent out, with the results downloaded into spreadsheets and painstakingly interpreted by analysts. Subsequent surveys are often not linked to the ones that have gone before, and even if they are, it’s left to human analysts to make intelligent connections and interpret the trends.

“This is the gap we discovered in the business services space”, says Kent Barnett, CEO of ClientLoyalty. “Organisations rarely use data to manage the voice of the supplier process, and hence miss out on an enormous opportunity to employ a continuous improvement methodology. They also fail to put that data to work by translating the information into meaningful action.”

The potential impacts of failed business relationships are huge. For buyers, it means wasted time and painful switching costs, while for suppliers, it means churn. In Barnett’s words, “a revolving door is never good for business”. That’s why ClientLoyalty’s founders saw a need to create a supplier performance management system that would build long-term, meaningful relationships between buyers and suppliers.

How ClientLoyalty works

The easy-to-use system is built to optimise relationships through transparency. Users can input operational metrics (KPIs), which are reported using a simple green, yellow and red approach. The system gathers direct feedback and social sentiment, using in-built algorithms to scan the web and track suppliers’ reputation ratings.

The data is delivered in the form of alerts (risk flags), dashboards, and report-out tools. “We call it a data-driven solution”, says Barnett. “The system uses NPS (Net Promoter Score) and the AI generates recommendations on how to reduce detractors and raise your score. Six Sigma is another important part of our measurement methodology – it’s all about smarter relationship management.” All data is benchmarked across ClientLoyalty’s growing client base, showing the low end, high end, and where your supplier falls.

The artificial intelligence kicks in with recommendations on how to improve performance, and is one of the most valuable aspects of ClientLoyalty’s system. This aspect addresses the major gap and frustration many CPOs have with voice of the supplier surveys – there’s really no point in gathering data on relationship strength if you are not going to do anything with that information. ClientLoyalty’s automatically generated recommendations provide a factual base to create a targeted action plan that will improve supplier relationships and save you money.

The results

“We’re creating a business culture that’s based around accountable performance, one company at a time”, says Barnett. “The key is having clear and transparent communications, with the ultimate goal of turning business relationships into business partnerships.”

ClientLoyalty is software that optimises relationships between B2B buyers and suppliers, helping organisations continuously improve by analysing direct feedback, social sentiment and operational data to create stronger bonds of loyalty. If your organization is a buyer of goods and services and needs to manage critical supplier relationships, or a supplier of goods and services and needs to manage strategic client relationships, ClientLoyalty can help you connect with your business partners using data-driven management tools.

Is Any Profession Safe From AI Disruption?

Would you trust an “artificially intelligent colleague” to solve your legal disputes? It may be closer than you think as AI and cognitive technology advances prove no industry is safe from disruption.

At the end of last week, it was announced that a major US law firm, Baker & Hostetler, had hired Ross to run its bankruptcy practice. Not major news you might think, until you realise that ROSS is the world’s first “artificially intelligent attorney”.

Built upon the same concept as IBM’s Watson, and using the same cognitive technology, ROSS is another example of a major technological disruptor, and proof that no profession is safe from the advance of AI.

Setting a Precedent

In many ways, ROSS is very similar to the original Watson technology. The AI can read and understand language, generate hypotheses for questions it is asked, and can back up these hypotheses with research and citations from legal literature and cases.

The success of ROSS is centred on how it learns. As the AI interacts more with its human colleagues, it learns from its experience, getting more intelligent and faster at problem solving with each task it does.

It can also perform these tasks faster than human counterparts, examining thousands of documents in a fraction of the time it would take a person to do. It is also able to filter these results, and only presents the most relevant cases and citations from the data available.

Although Baker & Hostetler are the first to publicly announce signing up ROSS, Andrew Arruda, CEO and co-founder of ROSS Intelligence, has confirmed that a number of other law firms have already signed licences to use ROSS too.

Big Data for Recruitment

Big Data, AI and cognitive technologies all go hand in hand, with many seeing Big Data as a key driver behind the development and advancement of the technologies. At the Big Ideas Summit, Barry Ward, Procurement Brand Manager at IBM, stated that 80 per cent of the data available to us is unstructured.

Unstructured data is difficult for humans to sift through, and find relevant information with any speed. Cognitive technologies, such as IBM Watson and ROSS, have been designed specifically to work with this unstructured data. While the potential applications for procurement from Big Data have been spoken about extensively, it’s to the recruitment industry that we look now.

A recent edition of the BBC Radio 4 In Business programme highlighted the work of Bill Nowacki, MD of Decision Science at KPMG. Nowacki works with Big Data, trying to improve the way organisations work, by analysing the data available to them.

One facet of this is uncovering the so-called “data trail” left by individuals when they use electronic devices, search on the Internet, and post on social media. All this data can be pulled together to generate a picture of the individual in question.

In a corporate setting, it can show how people are performing. There are further applications in the recruitment process too. Potential candidates can be identified by on comparing them with high performers already in the organisation, as well as assessing the candidates for cultural fit.

The benefit of using Big Data and cognitive technologies in recruitment is the lack of bias in the process. Whereas human interactions can fall victim to inbuilt bias, the technology has no such issues.

And as the technologies learn from experience, it’s possible that the recruitment process may benefit from greater understanding of personality traits, individuals’ values and norms, and create a fairer process all round.

Events in Brief

A couple of final pieces of news from Procurious this week include what you’ll be seeing on the site soon. We’re attending Coupa Inspire and ISM2016 and we’ll be bringing all the major headlines and information from these great events in the coming weeks.

Last week was Coupa Inspire, where the business announced that it had connected its 2 millionth business on its Open Business Network, plus Sir Richard Branson, and his son Sam, gave a keynote address on a variety of topics including the importance of philanthropy, leadership and inspiring others. Plus Sir Richard also talked about his plans to build Virgin Hotels in space!

Stay tuned for more on these topics soon!

What do you think of the latest AI developments? Do we have anything to worry about from AI in the future, or is it just the stuff of science fiction? Let us know your thoughts.

Each week we sniff out the top procurement and supply chain headlines for you to enjoy…

Concerns over US Retail Sector Health

  • Macy’s, the largest department store chain in the US, has increased fears over the health of the US retail sector with its poor Quarter 1 results.
  • The company announced its worst quarterly sales since 2009, with sales falling 5.6 per cent, for a fifth consecutive quarterly decline.
  • A move away from traditional stores to online shopping and fast fashion has been blamed for the struggles of many companies in the retail sector.
  • With consumer demand not expected to increase for department stores, Macy’s is now intensifying its cost cutting efforts.

Read more at the Wall Street Journal

Switzerland Tops Global Supply Chain Index

  • Switzerland has taken top spot in the 2016 FM Global Resilience Index, unseating 2015 leader Norway.
  • The index ranks the supply chain resilience of 130 countries according to nine drivers that affect business vulnerability.
  • Falling oil prices have been blamed for the falling ranking of Norway and a number of other countries, including Kuwait and Venezuela.
  • Terrorism has also been a factor in the 2016 rankings, with Belgium, Pakistan and Nigeria all dropping down the list.

Read more at Supply Management

Release 15 Announced at Coupa Inspire

  • Release 15 is Coupa’s second major release of the year, delivering a number of enhancements across the platform.
  • Hyperlocalised Languages addresses local language requirements across 100 countries, along with terminology unique to individual businesses, by allowing customers to modify Coupa’s 20+ languages for their own purposes.
  • Updated Sourcing Recommendations Engine enables savings initiatives to now be recommended based on predicted trends in expenses spend.
  • The New Supplier Risk Recommendations Engine monitors supplier data and reports on risk triggers including expiring certificates and outdated information.
Read more at Coupa