Tag Archives: IBM Watson

Three Risks Every Procurement Organisation Needs To Manage

Experts around the globe tracked the terrifying advance of Hurricanes Harvey and Irma earlier this month, plotting and estimating the potential damage to life and property as the monster storms approached the U.S. mainland. Can the deployment of cognitive AI lead to more accurate predictions and better risk management?

IBM’s global supply chain has been acknowledged as one of the world’s most complex. With scale and complexity come increased risk, but the Global Procurement team has it covered with its award-winning risk program augmented by the remarkable abilities of the Watson Cognitive Platform.

Even Watson, however, appreciates some assistance when it comes to risk mitigation, which is why IBM has partnered with an e2e cloud risk service provider named Resilinc. With this new capability, the team provides a composite risk score for every one of IBM’s suppliers based on six risk dimensions – financial, location, recovery, operations, resiliency and sourcing.

The three overall risks that the team has built its mitigation strategy around are:

  1. Loss of supply continuity

The fallout from a supply continuity problem are well-known – missed deliveries, plummeting customer satisfaction and lost revenue. IBM’s risk program is therefore designed to protect supply continuity by monitoring and providing real-time alerts on man-made risks, natural forces or climatic threats, along with financial and economic risks.

Nothing illustrates the disruptive potential of a risk event so much as the recent Hurricanes Harvey and Irma. To demonstrate how Watson can augment risk-management ahead of hurricanes and other crises, the team at IBM shared with Procurious the ways in which Watson’s cognitive capabilities were used to track and provide unique insight into Hurricane Patricia back in 2015 – an approach which contributed to IBM picking up a major award for Risk Management at Procurement Leader’s World Procurement Awards.

Using feeds including The Weather Company and the US Navy Weather database, Watson tracked the storm’s velocity, size, category, intensity and simulated scenarios of possible storm tracks. Interestingly, Watson also engaged in “social listening”, picking up local sentiment by tracking Twitter and other social media platforms. At the same time, Watson alerted IBM about every 1st and 2nd-tier supplier in the storms’ possible tracks.

Once the Risk and Supply Assurance teams had the earliest possible indication of Patricia’s potential impact, mitigation plans (such as closing at-risk plants) were readied for deployment. 

  1. Reputational damage

 IBM’s Conflict Minerals Team must be very well-travelled. From Dubai to China, Indonesia to Vietnam, they’ve conducted on-site visits with smelters and refiners to an impressive 10 levels deep in the supply chain, working with them to certify that they are using minerals controlled by responsible sources.

Every supplier must sign the Electronics Industry Citizenship Coalition (EICC) code of conduct, which IBM has adapted as the single code across its supply base. It establishes standards regarding safe working conditions, fair and dignified treatment of workers, and environmentally responsible and ethical operations. To this end, IBM has conducted +2000 3rd-party audits across 34 countries. 

  1. Regulatory noncompliance 

Although noncompliance isn’t as exciting as a hurricane tearing through suppliers’ facilities, the impacts can still be dramatic. Noncompliance can result in fines and penalties, product impoundment, revenue reversal and adverse press.

IBM’s Global Procurement Environmental Compliance team ensures all products comply with environmental directives, laws, regulations and standards; made incredibly complex by the global nature of the organisation. The team tracks changes in regulations, such as eco-design or restrictions of certain chemicals, then determines if the change will affect IBM products and plots a path to compliance accordingly.

Risk and Reward

IBM Global Procurement’s efforts in risk mitigation were recently celebrated at Procurement Leader’s World Procurement Awards, where the team won a major award for Risk Mitigation, and a second award for its transformation program.

Procurious is working with our Knowledge Partner, IBM, over the next 12 months to promote cognitive procurement to our global community. To learn more about IBM Global Procurement, click here.

4 Cognitive Tools That Are Advancing Procurement

Don’t let yourself be overwhelmed by the magnitude and potential of cognitive technology. The greatest journeys start with that all-important first step and, when it comes to AI, you just need to get started!

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There’s a lot of buzz around how ready our industry is to start using some of the newest cognitive technologies. But the time really is now for CPOs and procurement organisations to put a stake in the ground on where they want to go in the future with regards to digital and cognitive capabilities, to put the roadmap in place for how they want to get there.

We feel your cognitive pain!

Graham Wright, IBM Vice President, Global Procurement and Cognitive Procurement Services, fully understand procurement’s pain points and challenges when it comes to implementing cognitive technology and digitising the function:

  1. Outing the analog!–  Many procurement teams are still working in a reactive and transactional world without digitised processes to automate transactions.
  2. Powering the marketplaces!– From Graham’s experience, he sees very little in the way of supplier catalogs and automation driven from those catalogs. “In a digital world we should be leveraging marketplaces – ensuring   we make content available to all of the users so they can find what they need, click on it, and drop it in their shopping basket easily.
  3. Predicting demand – Current practice is to look at the spend information from historical data in order to make decisions. Nowadays, there are ways to anticipate and predict demand so procurement can look forward, instead of back.
  4. High value contribution – Lack of digitisation and lack of insight means that key personnel in strategic sourcing and category management are not able to focus on stakeholder management, interaction with the user, and negotiations with the supplier

4 cognitive tools you can use…NOW! 

But in spite of these challenges, and whether you like it or not, cognitive technology is coming to change the world.

Not everyone will be ready to jump into the cognitive capabilities. But it’s not an all-or-nothing proposition; you can plug in cognitive at any step. Many of these tools are proven and in use through IBM Procurement today and are being prepared for a broader market. Graham took us through four of these cognitive tools.

  1. Supply Chain Risk Insightscognitive solution fetches unstructured data from social media and creates alerts ahead of time for category managers who can take preventive action to reduce or eliminate impact from such challenges. Effective demand forecasting and proactive risk management is critical to a responsive and cost effective supply chain.
  2. SupplierIQcombines data gleaned through unstructured sources (e.g. social media, news feeds, competitor websites, corporate social platforms, blogs and forums etc.) and contrasts that with other data sources to generate insights that were earlier not accessible. A category manager could actually stumble upon a new supplier for a category that was not being considered; or actually drop an existing supplier because of the potential risk an existing supplier by connecting performance with market information.
  3. PricingIQ can save category managers millions of dollars by tracking contract prices in contrast with dynamic market prices rather than sticking to contract prices that are struck for a number of years. This tool allows IBM Procurement Services category managers an additional 3 – 10 per cent in savings in key spend categories over and beyond what’s already been saved. Pricing IQ was awarded Most Innovative Use of Technology by CIPS in 2017.
  4. Cognitive Buying Assistant(CBA) drives user adoption and spend under management and ease of use. IBM are designing superior user experience by applying cognitive tools on a mobile app that can recommend most relevant items to buy based on user profile, usage patterns as well as sentiment analysis gleamed out of feedback from other users. Ordering something in your professional capacity will soon be as easy as ordering products in your personal life. This is a critical driver of user adoption since a better buying experience will lead to better compliance and better savings for the user and business.

Your path to cognitive 

Everyone’s roadmap will be different and every procurement organisation comes into this maturity scale at different points. Where some larger procurement teams are already embracing technologies like Blockchain and Dynamic Marketplaces, others are not quite there.

If you’re of the latter group, start by asking yourself how you can get more out of the data you’re sitting on. How can you gain better insights and advanced analytics from all the spend and transactional data that flows through procurement?

Lastly, consider whether you have the right talent to help you along on your journey.

With more robust data and insights, the more you will free up your people to do what they are meant to do!

Live From The Big Ideas Summit

Want to hear more from IBM’s Graham Wright? On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action and LIVE video from our speakers and attendees. 

 

The Digitisation Of Procurement Is The Gift That Keeps On Giving!

Want to enhance the customer experience but struggling to find the time? IBM’s, Lucas Manganaro, explains why the digitisation of procurement is the gift that keeps on giving!

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If the job of a procurement department is to provide a service to the enterprise, then shouldn’t procurement folks be investing the majority of our time focusing on the experience of our business stakeholders and our supplier partners?

I think we should, but all too often what I see is the majority of procurement work hours being dedicated to spreadsheets focused on little more than unit prices, discount levels, rate cards and blocked invoices.

C’mon folks. We can do better than that!

Who has the time to be “customer-focussed”?

I’m not suggesting we ‘go nuts’ and forget about delivering bottom line savings to the corporation. I do, however, think that we will get more frequent opportunities to save, and more partnership on ways to save while driving mutual benefit, if we focus a bit more of our attention on our customers and suppliers and the experience they have when they choose to partner with us.

But who has the time?!

Certainly very few of us find ourselves burdened with surplus free time. We can’t add hours to the day but we can subtract time draining tasks that crowd out the good stuff.

Procurement practitioners require access to vast amounts of information to effectively manage spend. The data is often spread across a myriad disparate sources and often times the process of gathering and reviewing that information leaves little time for focusing on the experience of suppliers and stakeholders.

These include supply contracts, purchase order data, PCard and T&E card spend, invoice data, supplier performance data, supplier financial solvency data, catalogs, supplier mergers / divestitures / bankruptcies / name changes, internal part numbers, supplier part numbers, volume discounts, insurance certificate renewals etc. etc.

If you’re like me, you were probably some combination of bored, frustrated, and defeated by the end of that list and that list could have easily filled the rest of a page.

Why is digitisation so important?

There’s a lot of ‘stuff’ to consider. This is why digitisation is so very important for procurement. Getting the data off paper and into formats where it is visible and reachable is extremely important. This makes it much easier to collect, validate, coordinate, enrich and connect that data so that ‘whole pictures’ of the procurement process can start to come into focus. There is an abundance of amazing tools available to help streamline and automate procurement processes and the capabilities are growing by leaps.

Digitising the data and process is one of the most important keys to unlocking the value that these capabilities will deliver, and procurement organisations that get this foundational element right will have a substantial head start on delivering real value to their organisations.

Ask yourself a few basic questions on supplier information, sourcing process, or supply market dynamics. If you find that the answers to the questions require multiple system searches or spreadsheets it’s probably time to start a conversation about taking your procurement function fully digital. The investments you make in getting this right will pay you back with (among many other things) more time to spend building lasting relationships and great experiences for your stakeholders and suppliers. And those experiences will keep them coming back.

On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action and LIVE video from our speakers and attendees. 

Against The Clock: 60 Seconds With IBM….

What makes for an exciting workplace, how do you identify the great leaders and what skills are crucial for procurement? We put IBM’s Graham Wright to the test in a round of quick-fire questions.

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With less than two weeks to go until we launch The Big Ideas Summit in Chicago, we thought we’d have a quick catch up with some of our keynote speakers to discover what makes them tick, where they see the procurement function heading in the near future and how they would reflect on their successful careers.

First in the hot seat is Graham Wright, IBM Vice President, Global Procurement and Cogntivie Procurement services. He’ll be enlightening our Big Ideas audience on Procurement’s Radical Transformation and the impact of cognitive technology.

But today, we want to know what makes him excited about his work, what he wishes he’d known at 20 years old, and the key skills he’s looking for in a killer team.

How do you stay relevant in a world of fast-paced innovation?

Firstly, client interaction. This gives you exposure to a huge variety of approaches by industry, country and company to innovation. You have to remain selective.

Secondly, you cannot read everything.  Instead, take the time to focus on the few key areas you want to learn about.

Thirdly, make time to network and engage through all types of media and professional and industry associations to get the information and bounce ideas to ensure you have learnt and can develop your points of view.

Finally, take the time to think !

What makes you excited to go to work on a Monday morning?

  1. Desire to win.
  2. Clients, my team and the engagements.
  3. Excitement of driving an agenda through IBM that can truly change the world through data, the next natural resource.

What skills and talents contribute to an all-round, great team?

  1. Self motivated, client focused individuals with an operating environment allowing learning from mistakes.
  2. Soft skills, but I’d call them consultative!
  3. An enquiring, questioning mind with the ability to apply innovative, design thinking.
  4. Passion and drive for the business, profession and self.

What 3 attributes make a great leader?

  1. Confidence to lead and use multiple styles.
  2. Being a good listener and a coach.
  3. Communicator with the strength to give “Straight Talk”

What do you know now that you wish you’d known when you were 20?

  1. Time goes very quickly. Have a plan and follow your dreams. Experience as much as you can.
  2. All those successful Internet Stocks !
  3. The benefit of exercise and healthy balance.

Want to hear more from Graham? On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action and LIVE video from our speakers and attendees. 

Do You Have The Right Skills To Deliver Tomorrow’s Procurement Strategy?

Why are our procurement teams falling so short when it comes to delivering on strategy? Changing mind-sets and attracting fresh talent will help start the party!
Register now  as a digital delegate for The Big Ideas Summit Chicago!
 

Shockingly, 60 per cent of CPOs believe their teams do not have the skills to deliver their procurement strategy, according to Deloitte’s “Global Chief Procurement Officer Survey 2017.”

Why are procurement teams falling so short?

Originally, procurement was heavily based on process management, negotiation and basic spend analysis. But the procurement function is evolving, and professionals have to adapt to a new environment . There are new and growing expectations that require alternate skills for a more advanced job profile.

Procurement professionals are expected to be much more analytical, with the ability to perform data mining. They also must learn to manipulate and understand financial data and indicators, such as P&L and balance sheets. That’s not to mention that they should be proficient with the latest technologies.

Yet, one of the most important skills to develop is customer centricity. In today’s customer-centric world, this becomes crucial.

In my opinion, understanding internal customers,  being able to communicate in their language, knowing what they want or helping them to understand what they need, is the most difficult skill to learn and develop because it often goes against the conventional and traditional training that many procurement professionals have received.

It’s time to stop hiding behind the processes and get to know the internal customers! Given the back-office environment we are coming from, there is still a lot to do to change the mind-set and the behaviour of those involved. Procurement professionals need to develop their consultative skills and become less process focused, since excessive process significantly impedes speed and agility.

Keeping It Fresh

Another challenge for procurement involves attracting and retaining fresh talent in our industry. This situation needs to be addressed now to prevent a significant skills gap within the next couple of years. While we still have to continue to build traditional procurement skills. We also need to recognise that these skills must evolve as analytic and cognitive solutions provide more refined data and insight. The challenge is less about finding someone who is an expert negotiator and more about recruiting someone who understands data and logic.

At IBM, we are currently hiring maths and statistics majors because they can understand trends and probabilities. Although many procurement skills can be taught,  it’s hard to train someone to find trends in complex data.

Taking IBM’s example, our strategy to recruit and retain talent is reflected in how we communicate our procurement roles. “Our Procurement strategy is about collaborating with customers to ensure they have best in-class solutions, with access to the most advanced technology available on mobile devices. We partner with our suppliers to be as innovative and creative as possible.”

Presented like this, a job in procurement sounds pretty exciting!

The party ain’t over yet!

And the party isn’t over once we’ve found the right skills and talent, we also need to keep that skilled staff within the procurement function! If we help employees build on their competencies as well as add new ones, and if they can see that their contribution to the company’s mission clearly makes a difference, it will help us to keep those employees in procurement.

Ultimately, modernising the procurement profession and making procurement a “cool” place to work will help retain a talented, skilled and motivated workforce.

On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action. 

IBM Global Procurement’s Radical Transformation

Transformation has become the new norm as organisations respond to an onslaught of shocks. But is there a best-practice way to go about transforming a procurement function? We interviewed Procurious Partner, IBM Global Procurement, to discover why they’ve been recognised on the global stage for their approach to the challenge.

If you were to stop any procurement professional on the street and ask what their function is currently up to, you’re unlikely to hear the reply, “Oh, you know – business as usual”. Instead, you can expect to hear a description of some sort of transformation. Whether it’s enterprise-wide or procurement-led, everybody’s doing it. In fact, you could argue that the process of transformation itself has become business as usual, especially if you’ve ever worked in a company where one transformation follows another, ad nauseum.

Where once your organisation may have needed to reinvent itself every few decades, today, an onslaught of shocks – technological, cultural, economic, and regulatory – is forcing companies to transform every few years. Five to ten years ago, your CEO might have become a business icon through a single transformation. The minimum requirement now is being able to execute multiple transformations, while success today is measured in your ability to foster a culture of continuous reinvention.

Showing how it’s done

IBM Global Procurement recognised the need to transform as market dynamics put increased pressure on its customers, which consist of internal IBM business units and external clients. Graham Wright, Vice President, Global Procurement and IBM Procurement Services, described some of these pressures. “We realised that our internal and external clients needed less complexity, more transparency, consistent processes executed with speed, and new solutions. The challenge was to find new ways to stay relevant and be successful – that’s why we launched a radical transformation not only to address the needs of the business but to keep pace with smaller, more agile competition and remain an industry leader”.

The team went about this by ramping up activity across three key areas:

1.Innovation: Leveraging strategic partnerships and key relationships to drive innovation.

The team unlocked the value of supplier innovation by implementing a state-of-the-art Supplier Enabled Innovation (SEI) program and using new, engaging tools, including cognition. The SEI initiative included 3rd-party ‘Voice of the Supplier’ surveys, supplier incentives including annual awards, and clear performance metrics.

2. Engagement: Delivering simple, engaging user experiences.

After identifying key client pain points around complexity, slow execution and delayed problem resolution, IBM Global Procurement followed a mantra of speed and simplicity to improve visibility, enhance workflows and reduce cycle times. Innovative engagement solutions, such as an “Ask Procurement” chat function for clients, have contributed to an impressive improvement in client satisfaction. The chat application is highly intuitive – it suggests self-service solutions for users, and provides direct access to live agents who can answer questions simply and quickly.

3. Analytics & Cognitive: Capitalising on foundational analytics and cognitive solutions.

No mention of IBM Global Procurement would be complete without a reference to its not-so-secret weapon – the Watson Cognitive Platform. Through catalog data enrichment and cognitive procurement solutions which provide users with refined real-time data for risk mitigation, market and supplier insights, pricing information and recommendations, the team realised significant efficiencies including hand-free POs and greatly improved process compliance.

As an extremely positive side-effect of this transformational effort, Wright reports that the team’s efforts are being recognised within the wider organisation. “The transformation has helped change the perception of procurement evolving from a cost centre to a value centre.”

While internal recognition of the procurement team’s value is gratifying, the Global Procurement Team was even more delighted to see their efforts celebrated at Procurement Leader’s World Procurement Awards, where the team won the award for “Transforming External Partnerships (Pioneering Business Impact)”. The team’s submission went through a rigorous 3-stage judging process including online judging, peer review and a face-to-face regional debate.

And that’s not all – amongst 350 submissions across 15 categories, IBM Procurement was short-listed for each of the 6 entries it entered a submission for, and picked up 2 major awards – the Transformation award, and another for Risk Mitigation.

Procurious is working with our Knowledge Partner, IBM, over the next 12 months to promote cognitive procurement to our global community. To learn more about IBM Global Procurement, click here.

IBM & SAP Ariba Join Forces To Transform Procurement

Procurement today needs to be about insights and intelligence. Will a new SAP Ariba and IBM collaboration be the function’s force for good?

Last week, tech giants IBM and SAP Ariba made the announcement that they would be joining forces to transform the future of procurement.

Together, the two will launch a hub for delivering cognitive procurement solutions to redefine the source-to-settle process. Additionally, the companies will launch a Cognitive Procurement hub to further the development of intelligent procurement solutions and services.

SAP Leonardo, IBM Watson and SAP Ariba will be used  to pool together intelligence from procurement data and predictive insights from unstructured information.

Procurement, according to IBM, is about to get smarter, faster and more efficient.

“Today marks a major milestone for procurement,” said Alex Atzberger, President, SAP Ariba. “With the deep horizontal integration capabilities native within SAP Ariba’s mature platform and the innovative capabilities of SAP Leonardo and IBM Watson delivered by the industry’s most experienced and trusted providers, companies can realise an even more intelligent source-to-settle process for managing all categories of spend that creates value across the entire business.”

What does the future hold for IBM & SAP Ariba?

IBM Watson represents a new era in computing called cognitive computing, where systems understand the world in a way more similar to humans: through senses, learning, and experience. Watson solutions are currently being built, used and deployed in more than 45 countries and across 20 different industries.

On the SAP Ariba Network, buyers and suppliers from more than 2.5 million companies and 190 countries can discover new opportunities, collaborate on transactions and grow their relationships.

By partnering, SAP Ariba and IBM will use their data insights to increase procurement efficiency and intelligence, as well as improving spend visibility.

“We’ve built a cognitive procurement platform trained specifically to understand procurement transactions and unstructured data such as weather, non-standard part numbers in contracts and complex pricing structures,” said Jesus Mantas, General Manager, Cognitive Process Transformation, IBM Global Business Services. “By combining the power of IBM Watson on the IBM Cloud with SAP Ariba, we are leaping existing procurement benchmarks and delivering unprecedented value to our joint clients.”

Watch below to hear Jesus Mantas and Alex Atzberger discuss the partnership in more detail:

What’s the media saying?

IBM Emptoris customers are sure to be questioning what this announcement means for them.  Part of the deal includes IBM gradually retiring Emptoris products over a multiyear timeline and encouraging its customers to migrate to SAP Ariba.

As Jason Busch points out on Spend Matters “it is clear that the partnership provides significant time for current IBM Emptoris customers to fully evaluate all of their options, including the potential to transition to SAP Ariba or to select other providers.”

An IBM spokesperson, speaking to The Register,  commented that “we are encouraging Emptoris clients to transition to SAP Ariba. We will work closely with them providing support and transition services. Clients can continue to use Emptoris.”

Duncan Jones, Vice President, Principal Analyst at Forrester Research questioned the details of the announcement.  He wrote, “the press release does not say when the collaboration will deliver anything that customers can actually implement.  SAP has a long history of premature announcements and releases, so I’ll wait to see actual software being used by real customers before I get excited about this initiative.”

What do you think about SAP Ariba and IBMs’ partnership?  Is it something to be excited about or are you, like Duncan Jones, a little skeptical? Let us know in the comments below. 

In other procurement news this week…

The Future Belongs to AI

  • 19-year-old world champion Ke Jie upon commented that the “future belongs to AI” after losing a game of ‘Go’ to Google’s AlphaGo robot
  • Go is an incredibly complex Chinese board game whose conquering by computers is seen as kind of a holy grail, and was not expected to be possible for another decade
  • The AlphaGo robot “learned” by speeding through the equivalent of playing 80 years straight to develop its technique and strategy
  • A robot that can learn from experience to handle new situations can tackle any problem a human could

Read more at The Hustle 

Slavery Referrals On The Up

  • Kroll’s analysis of National Crime Agency data found there were 1,575 referrals for labour exploitation in 2016
  • 70 per cent of these (1,107) were adults and 30 per cent (468) were minors
  • Kroll said the increased numbers cast a spotlight on an issue that is of increasing concern to businesses, particularly in sectors such as retail and manufacturing
  • Under the Modern Slavery Act 2015 businesses with an annual turnover of £36m or more must make public the steps they are taking to ensure modern slavery is not taking place in their business or supply chain

Read more on Supply Management 

Amazon to Open First Store in New York

  • Last week Amazon officially opened its first brick-and-mortar store in New York City – its seventh in the US
  • The physical location uses millions of Amazon customer ratings and reviews as its guide to providing customers with a unique shopping experience
  • The shop houses 3000 books organised into categories that you wouldn’t find at your typical bookstore such as  “Books with More Than 10,000 Reviews on Amazon.com”
  • Amazon Books is planning to open five more locations soon, including stores in New Jersey and another in New York City.

Read more on UK Business Insider

IBM CPO: You’re Finished If You Think You’ve Finished!

Even in a world where data is king,  IBM CPO Bob Murphy believes there is nothing so important as professional development and human relationships.

The numbers are eye-watering. IBM CPO Bob Murphy looks after a $70 billion spend – $25 billion internally and $45 billion 3rd-party. The company has around 150,000 contracts across 17,000 suppliers, with its flagship cognitive technology, Watson, reading 900 million pages in multiple languages per second.

As we prepared for our interview with Murphy, it’s understandable, then, that we expected to find him entirely focused on data analytics, automation, AI and the other tech that’s rapidly impacting so many professions. We were wrong – what comes across loud and clear is that this is a charismatic, engaging leader where people and relationships matter.

Think 40 and other professional development

Talking to Bob, it becomes immediately clear that his personal commitment to professional development is enormous. “If you want to be a leader, you have to stay current and replenish your IQ through learning and new knowledge. Ultimately, talent development is about making sure you have excellent people to replace outgoing leadership – it’s also vital for driving innovation.”

IBM’s Think 40 program mandates a minimum of 40 hours per year of self-initiated professional development. For the procurement team, this means having the option to select from a range of internal and external courses (often online), including offerings from Six Sigma, Procurement Leaders and ISM. For Bob, it comes down to inquisitiveness and a love of continual learning.

“We look for logical, friendly, humble, smart and inquisitive people. Anyone with a rudimentary knowledge of supply management can be trained to become outstanding procurement leaders. Making people aware of what is possible is absolutely critical – most successful people around the world put aside time to regularly read and educate themselves. They’re inquisitive; they enquire after things.”

Two critical skills for future leaders in procurement

  1. Digital literacy

“Data”, says Murphy, “is omnipresent and omnipotent.” He stresses that leaders who want to thrive in the procurement profession need to develop an understanding of:

  • Data analytics – we can gather data but how do you use that data to gain insights?
  • Robotic processes – how can you automate tactical processes so human capital is used to the greatest effect?
  • Cognitive computing – understanding how to digitise a process end-to-end so it is interconnected and insightful.
  1. Relationship building

Murphy tells Procurious that while leaders need to be able to use technology to get the insights and knowledge they need, their main focus should be on developing their emotional intelligence (EQ) rather than their IQ. “You need to have the ability to talk to clients in a consultative manner. We have one mouth and two ears, and that’s how we ought to apportion our time in any discussion. When we’re talking, we’re not learning.”

How can you train someone to be adept at building relationships? “It’s about attitude, not aptitude”, says Murphy. Whether leadership is innate or taught, the results are the same. You need to be able to work collaboratively with your suppliers, show them what’s important to you and understand what’s important to them. “Your relationship-building skills will ultimately enable your suppliers to drive innovation. For example, we have 17,000 suppliers at IBM. I want each one to wake up every morning and think: ‘How can I make IBM better’?”

Have you got a cognitive journey map?

Where is your organisation headed with cognitive procurement technology? Where do you want to be? How will you use people, processes and technology to get there? What can we automate?

Murphy recommends that every procurement team should have a roadmap that lays out the strategy for its data, analytics and cognitive journey. “All CEOs need a vision for their cognitive journey, and every function needs one too.”

According to The Hackett Group’s 2017 Procurement Key Issues research, only 32 percent of procurement organisations currently have a formal digital strategy in place, and only 25 percent have the needed resources and competencies in place today.

In reality, we can’t all be first-movers. But even if your company isn’t yet ready to act on cognitive technology, CPOs will be rewarded for raising the question, thinking through the issues and putting the challenge on the Board’s agenda. Most importantly, there needs to be milestones and deliverables, as Murphy warns: “Strategy without execution is a daydream”.

To end on a gem of a quote from Murphy, he spoke about how the constantly evolving nature of technology means a never-ending journey. “’Journey’ is a good description, because it is never finished. Anyone who thinks it is finished, is finished.”

Are You A Procurement Starter Or A Finisher?

Are you a starter or a finisher? According to IBM’s Barry Ward, you’d better be both! Barry discusses the key skills most critical to procurement in the coming years.

Barry Ward, Procurement Brand Manager, Global Business Services at IBM is a keynote speaker at Big Ideas Summit 2017.  He’ll be explaining the big ideas behind Watson and the opportunities that cognitive tech presents to procurement. When we spoke to Barry ahead of the event he was keen to remind us that, despite rapid tech developments, traditional procurement skills are far from being made redundant.

How do you stay productive and current in a world of fast-paced innovation?

  • Collaborating with colleagues
  • Networking with others – using social media and other channels
  • Building and nurturing an ecosystem of organisations that are leading or developing solutions that may have or will have an impact in your function

What key skills are critical for procurement in the next 5 years?

We will always need traditional procurement skills such as the ability to be a strong negotiator, to communicate well internally and externally, to be a starter and a finisher. But, on top of this I think the importance of an open mind and curiosity in terms of the role that technology can play in the future is going to be more important than ever.

There will be an increasing need for project management skills, change management, relationship management skills. This is on top of the usual and still critical traditional procurement skills such as category expertise or negotiation skills. I can also say that there is a growing importance in soft skills: communication, teamwork and collaboration and problem solving.

How has technology, the Internet of Things and e-Procurement affected IBM?

Technology has placed a key role in IBM’s transformation over the past 20 years or so. Its importance is perhaps more critical in the the current phase of our procurement transformation. Understanding how digital technology can transform the supply chain and our source to pay activities is critical in terms both driving our efficiency and effectiveness but also to showcase how procurement can drive value throughout our organisation.

This positions Procurement in a much more strategic role than ever before. Procurement data is much more visible than ever before.  Insights through combining unstructured and structured information augment our knowledge, with alerts being posted to mobile devices instantaneously means that buyers can have much better assurance of supply continuity, of being able to understand price opportunities and to focus their time and energies on higher value activities than ever before. Lower value work will become automated or systems-driven. This is all good news for Procurement.

One clear impact of this transformation is that our key stakeholders now have very high expectations of high performance from Procurement personnel, perhaps more so than ever before, but the rewards are clearly evident in terms of the value that individuals can bring as well as the procurement organisation as a whole.

How valuable have mentors been in your career?

Mentoring is a highly personal thing. Some people need to have guidance and direction particularly in an organisation that may be widely spread and fast-moving, and if you are looking to move around different functions. Similarly for those who are in a smaller organization, mentors can bring an external, broader perspective.

Others are confident of their own abilities in charting a course for their own development and progression. I have had mentors in the past, particularly when I was in the early stages of my career. The more confident you are of your attributes and ambitions the less I have found that I needed mentoring. I spend time mentoring others mainly from within IBM and mainly from other geographies.

How did you first become interested in procurement?

I didn’t know very much about Procurement in my time as an undergraduate. It was not a profession that had much coverage when I was at University, unlike Finance or Engineering.

My first job as a business graduate was as a Purchasing Analyst running Bill of Material queries in a MRP system for a large manufacturer. This brought me into contact with many parts of the organisation including procurement. The procurement manager at the time was quite an intellectual and gave me a broad view of the role that procurement can play in an organisation.

Clearly he influenced me as I have spent my subsequent career in procurement and supply chain roles!

How will cognitive technology impact procurement professionals?

Cognitive technology will transform the role of the procurement professional and the impact that he or she can make for their organisation. It will be able to remove some of the more prosaic parts of the procurement role, such as data gathering and analysis, together with augmenting a buyer’s knowledge thus enabling them to spend more time on higher value tasks and ultimately make better decisions and be more effective.

Procurement professionals will need to understand how cognitive technology works – so they can be alert to potential mistakes that can happen from cognitive solutions, so that data input from these solutions is relevant and accurate.  It will eventually help, and force, them with their career progression as well as developing their expertise.

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Cognitive Technology Is A Bicycle Built For Two

By 2020, every important decision will be made with the assistance of cognitive technology but that doesn’t mean the  procurement function will be replaced altogether. instead, Man and Machine will work in tandem. 

Watch our free webinar, “Man and Machine: Redefining Procurement’s Role in the Digital Age”, here.

When someone like Ginni Rometty, the current CEO at IBM, says this, it’s worth paying close attention. As we have explored in the past, artificial intelligence and infinite data means endless opportunities, both personally and professionally.

Rometty also speaks from a position of authority and experience. IBM’s Cognitive Technology solution, Watson,  is already transforming fields like health care, finance, entertainment and retail.

The system has the potential to understand, learn and think through any procurement issue or question presented, offering detailed answers, analysis, or solutions, just as human can. But the difference is that Watson can do this on a scale and speed that outstrips the human brain.

Man and Machine – What’s Procurement’s Role?

This presents great opportunities for procurement, helping make faster, more informed decisions, with deeper insight and greater certainty.

However, as with any new technology, opportunities also come with uncertainty and challenges. Does procurement truly have the agility, and desire, to embrace this new technology and remain relevant?

And what is the role left for procurement professionals, when the smartest guy in the room is Watson?

Procurious teamed up with experts in the cognitive field to help procurement professionals get to grips with this tricky topic. Joining us for the webinar were:

  • Nathalie Fekete – Worldwide Cognitive Procurement Subject Matter Expert at IBM
  • Manoj Saxena – Founding General Partner at The Entrepreneur’s Fund
  • Pascal d’Arc – General Manager at Cognitive Scale

Cognitive – Big Ideas and Significant Shifts

“This is one of the most significant shifts in human history.”

So what’s the Big Idea behind Watson? Well you may not be aware of it, but Watson has probably already touched your life, and the lives of hundreds of millions of people.

According to Nathalie Fekete the core concept driving Watson is its ability to interpret vast quantities of data, and think and reason like a human being. The machine is built to mirror the same cognitive learning process that humans have, even following the same “Observe; Interpret; Evaluate; Decide” process we use for decision making.

And it’s this adaptive nature, including the ability to augment human intelligence that makes Cognitive so important. Manoj Saxena believes that it’s the fourth biggest shift in human history, behind only the discovery of alphabets, and the inventions of the printing press and the Internet.

The Sky’s The Limit

“A little bit of AI can go a long way.”

According to Saxena, not only is AI already all around us, but we’ve also only just scratched the surface. What’s different now, and will be huge over the next 3-5 years, is the impact of AI on the enterprise.

AI and cognitive systems have already produced successful results in leading global companies across the financial services, retail, and healthcare sectors. And this innovation will only develop in years to come as we progress to super-intelligent computers.

However, Saxena was also quick to point out that the hype surrounding the topic might be unhelpful. To him, it’s about separating super-intelligence in computing from awareness and consciousness.

Hollywood and the media might have their own thoughts on this, but humans are yet to fully understand awareness and consciousness in themselves, let alone give this power to computers.

We also need to better understand the key terminology across this topic too. Saxena helpfully laid it out like this:

  • AI is the mega-term. It’s the science and engineering of making intelligent machines, particularly intelligent computer programmes.
  • Machine Learning is a sub-set of AI. This is a science involving the development of self-learning algorithms where the system learns from experience.
  • Cognitive systems are next-generation IT systems that emulate human cognitive functions and software. Cognitive systems are essentially the practical and applied applications of machine learning and AI into specific industries and business processes.

Got it now? Now you’re in a better position to understand the impact on procurement.

Cognitive and Procurement – Impact and Benefits

“Putting the person front and centre of how we apply this new technology.”

Cognitive systems, as well as AI, stand to overturn the norms for procurement, bringing a huge number of potential benefits. Nathalie Fekete stated that one of the primary benefits relates to the analysis of data.

Using vast amounts of structured and unstructured data will help procurement with supplier evaluation, risk management, and benchmarking. This data, and the systems, will also provide a new gateway for innovation. Procurement will be able to find new routes and ideas for savings and opportunities, using cognitive technology.

Pascal d’Arc built on these themes too, highlighting the growing excitement in procurement around cognitive technologies. d’Arc talked about three key themes developing in this area:

  1. Putting the person at the centre of the technology
  2. Delivering a more personalised experience of how employees interact with or run procurement
  3. How cognitive technology is delivering adaptive and agile processes, as well as reducing the time taken for traditional tasks.

Man and Machine in Tandem

“Start now, because it’s happening very quickly.”

Are you worried you might be replaced by a computer? You shouldn’t be. Cognitive technology can eliminate, automate, reduce and empower jobs roles, says Nathalie Fekete. But the good news is that what it’s removing is the hazardous, dangerous, repetitive and manually intensive parts of the role.

Within procurement, this means that time can be saved on some tasks, and better spent elsewhere. The key for procurement professionals is to ensure that they have the right skills to do the new role. And to understand this and start up-skilling now.

Fekete and Pascal d’Arc expanded on this, highlighting key skill areas future professionals will need:

  • Traditional procurement skills such as negotiation, Category Management and Supplier Relationship Management
  • Collaborative working
  • Project Management and Change Management

Learn More

What we’ve outlined above is just a small fraction of the great knowledge shared in the webinar. To access the full discussion, as well as other key insights from our experts, you can register here.

And the learning doesn’t stop there. If you have any questions, please let us know below, and we’ll make sure it gets passed along to the experts.

Watch the full webinar here.