Tag Archives: procurement technology

Communication Queen – Not Your Typical Procurement Pro

There’s a step change coming in the procurement technology and software industry. And communication and relationships will be the central pillars of it, says this Millennial.

There is step-change coming in procurement, and the change is going to be keenly felt in the procurement technology and software industry. But for this change to take effect, it needs support on both sides of the aisle – buyer and supplier.

Simona Pop, Head of Partnerships & Global Communication at InstaSupply, is not your typical procurement professional.

She’s one of a new breed of professionals involved in procurement and supply chain, who believes change is on the horizon, and that it can’t come soon enough.

A tattooed Millennial, with a stake (both monetary and emotional) in the company she works for, Simona presents a refreshing view on buyer and supplier relationship management, and believes in creating emotional connections with clients.

Not only that, but she also walks the walk when it comes to leveraging social media in business.

Procurious caught up with Simona, and chatted to her about her career, her approach to social media, and why she believes we shouldn’t have to leave the real-time efficiencies of our personal lives at the office door.

Tell us a bit about yourself – how did you get to where you are today? 

It has to be said, my career trajectory isn’t what you might call straightforward. I got out of school thinking I was going to be in advertising. Then I moved to the UK and started working with Brakes, the food supplier, in a sales role. I then went 180 from that path and started working in events.

Finally, I started working with InstaSupply as Head of Partnerships and Communication. One thing lead to another really, and in the end, it makes a lot of sense.

I love communication and building relationships. That’s what makes the world go round, as far as I’m concerned. My communications background is ultimately the driving force behind my take on business.

You’ve recently won your place at Virgin Disruptors – congratulations!

Yes, I am very excited about it. It was all about presenting my vision on what industry needs disrupting and how I would do it. I went straight to the core and illustrated how ALL business needs disrupting.

You can see my video below. It’s all about changing procurement and finance. They are the engine of each and every business so they need to be as well oiled as possible.

What role did social media play in the award?

As with every bit of communication I put out there, this was also a social affair. I got to chatting with Virgin via Twitter and found out about this opportunity. As everything in social media moved pretty fast, I only had a couple of days to script and create the video in order to stick to deadlines. I then uploaded it on YouTube and shared it via Twitter again.

I am a true believer in the power of social and its ability to not only bring us information in real time but also challenge us to become more creative and innovative. It’s why I am so happy to be part of the Virgin Disruptors community as a technology company.

So many procurement technology implementations fail – why do you think this is?

It comes down to how people interact with the technology and the company providing that technology. Is there a match there in terms of values? Or is it more about ticking a box and signing a three year contract so you don’t have to worry about it?

So many businesses will go for old technology just because someone else in their industry has used it before. Even if it’s not a great fit for them and their staff, they will implement it anyway just to tick that “tech” box and consider it done.

More often than not, businesses pay the price tag of an Aston Martin, and end up using it like a second hand Ford.

The fact that back office operations, procurement and finance technology involve so many different roles and levels of seniority, makes it paramount that the interface and functionality appeals to all age groups.

There shouldn’t be a difference between the way we interact with brands in our personal lives, and brands that we see at work.

What are the key changes you think need to be made? Can we make procurement/B2B software more like B2C counterparts?

The way I see it, every business relationship is a partnership – it’s not a case of sell and move on. As a tech supplier, you are going to be working closely with your client, as they will interact with your product every single day.

You want to allow them to work smarter, be more efficient and ultimately make their lives easier. You need to provide top notch tech, but also real time support. There’s no place for a helpline that keeps people on hold for hours, or an email they get a response to in three months. That would be unacceptable in B2C nowadays!

There needs to be a shake-up. We need to remove the jargon, the boring pages of bland text, the hieroglyphic appendices, and the contracts that tie you into five years, whether you like it or not.

Software providers want partners, not prisoners. We are here to simplify buyer-supplier relationships, and make life easier for everyone involved in running a business, regardless of role and seniority. Ultimately we want to support them in growing their business, and having a better quality of work.

After all, why should we leave all the efficiencies of B2C, our personal life, at the door, when we get to work?

How to Stay Ahead of the Curve with Process Automation

Traditional supplier relationships are under scrutiny as organisations assess capabilities for the future. Could process automation help procurement teams stay ahead of the curve?

ProcureCon Europe 2016 is rapidly approaching! The ProcureCon team has been investigating some of the fast-moving issues which are affecting CPOs across Europe today.

Perhaps more than any other factor in the industry right now, process automation and advanced analytics are having a huge effect on the ability of Procurement teams to deliver improved cost performance.

This changing landscape calls into question traditional supplier relationships. Of the CPOs and Heads of Procurement we interviewed in advance of the event, 76 per cent told us that they are concerned about the ability of their existing supplier base to serve their business needs in future.

At the same time, more than half of our research participants think that implementing automated procurement is a high priority for their business. This raises questions about how best to manage your supplier network to make sure that you’re ahead of the curve when it comes to process automation.

We spoke to Kelly Babbit from jCatalog and the Opus Capita Group to find out more.

ProcureCon: How is digitisation and process automation affecting CPOs today?

Kelly Babbit: In the digitised, networked economy, companies find themselves in a changed competitive field. The game is no longer primarily based on unique business relationships.

The success of a corporation is premised on the performance of its network of supply chains – its entire business ecosystem. Corporations are looking to strengthen relationships, and create new forms of collaboration – and gain control and compliance over their extended business processes.

It is significant that more than half of respondents to this research gave high priority to the implementation of automated procurement processes. Furthermore, we expect a future adjustment to the demand drivers and criteria used for selecting P2P service providers.

This trend is due to a far-reaching shift in business priorities toward digitisation and automation.

What kind of processes are we talking about?

Progressive solutions cover the complete process from sourcing to payment – from managing the first request for quotations (RFQ) to optimised working capital management and supplier settlement.

This is where the traditional view of P2P processes needs to be expanded. Enterprises will no longer evaluate the quality of solutions with a sole focus on basic procurement functions. Solutions need to be part of a global strategy and based on pivotal interconnections between buyers and suppliers.

As a result, the responsibilities of the CPO and CFO functions will begin to converge. Cloud based SaaS solution providers will need to support this interconnection with a global perspective and inclusion of diverse company stakeholders.

Connecting and automating processes from sourcing through to payment will become the expectation of leading companies.

What features should CPOs / CFOs be looking out for in a source-to-pay solution?

Cloud-based business network solutions must support effective sourcing, procurement, invoice, and payment automation. This includes implementation and adoption across their global business.  Some of the key features to look out for are:

  • Complete transparency, real time control and compliance with full audit trails across the entire source to pay process.
  • P2P automation and integration of the purchasing department with the accounts payables department. Plus full visibility to all purchasing and accounts payment data.
  • Visibility to company spend with total cost monitoring and supplier performance tracking as well as contract improved contract compliance.

Thanks very much for your time, Kelly.

To read the full results of our research amongst 100 CPOs and senior procurement executives, download the Procurement Challenges report here.

ProcureCon Europe, now in its 17th year, is Europe’s most strategic procurement conference for CPOs and senior procurement executives. See the full range of topic and speakers at the event here.

Cloud, Not Laughter, The Best Procurement Medicine

A spoonful of Cloud makes the medicine go down. Healthcare patients in England could benefit from a move to Cloud eSourcing.

VGstockstudio/Shutterstock.com

This article was written by Daniel Ball, Director at Wax Digital.

Healthcare organisations are under constant scrutiny to deliver high quality care to patients. In England, it’s The Care Quality Commission which regulates all health and social care services to ensure fundamental standards of quality and safety are met.

The findings of its reviews are published to the general public. This puts organisations not coming up to scratch at risk of suffering from a negative public reputation.

Improving Quality of Care

However, help is at hand from The Healthcare Quality Improvement Partnership (HQIP). The organisation works with healthcare organisations to identify areas where quality of care can be improved.

The HQIP is an independent organisation responsible for managing clinical audit contracts on behalf of NHS England. It was launched to promote quality in healthcare, and, in particular, to increase the impact that clinical audits can have on healthcare quality improvement.

Commissioning and managing clinical audits means having to source a range high quality external experts to carry them out. To do this, HQIP recognised that best practice procurement tendering processes were needed to to run an audit.

HQIP saw the value in moving to an eSourcing platform so that it could speed up the procurement process. It knew that if it was able to source experts quicker and do away with paper-based, manual tender processes, it could save itself valuable time and resources.

Moving to the Cloud

HQIP decided to go with Wax Digital’s cloud based web3 eSourcing. This allows the organisation to publish tenders electronically and make use of existing templates. It also enables suppliers to submit responses online.

The system also offers a mix of automated and manual scoring facilitates, with subsequent contract awards also taken care of electronically via web3.

Its project management function also allows HQIP to plan its eSourcing activities so that all relevant information is stored in one central place, which can be easily accessed by system users.

Judith Hughes, interim Head of Procurement at HQIP said: “As we’d aimed for, Wax Digital web3 has greatly improved our processes. Moving away from paper-based tendering has significantly reduced the time it takes to review and award teams for projects.

“It has also helped further ensure our quality guidelines are upheld and we now have a much more efficient way of engaging with our suppliers and them with us.”

An increasing number of healthcare organisations can benefit from the speed and efficiencies offer by cloud-based software. Innovation starts within the supply chain. By rolling out eSourcing technology, HQIP enjoys a more efficient supply chain for audit management. This in turn can aid healthcare organisations meet required care standards, and improve the quality of service for patients.

Stimulating Competitive Bidding With Traffic Light Feedback

What does a traffic light have to do with the sourcing process? When you’re considering sharing information, it might be a good way to retain a balance.

RFX processes can be frustratingly opaque for suppliers, particularly in the private sector.

Submitting a bid can be like trying to play a game of darts in the dark. After the dart leaves your hand there’s simply no way of knowing if you’ve hit anywhere near your target. And frequently there’s no response until the buyer informs you that your bid hasn’t been successful.

Don’t Give Away Too Much

Why are buyers typically so hesitant to give feedback? It may be due to a perception that knowledge is power, and giving away too much information will cause you to lose your advantage. To a certain extent, this is true. Too much granularity might allow the supplier to determine the target price necessary to win.

Similarly, giving away too little will cause your supply base to become frustrated and disengaged with the sourcing process. What buyers need to achieve is a balanced response, giving just the right amount of feedback to stimulate the supplier into giving a further discount.

A little bit of ambiguity can go a long way towards stimulating aggressive bidding behaviour, especially for suppliers who are aware that they’re in second or third place.

In a thoughtful article on the pros and cons of supplier transparency, Charles Dominick explains that a high level of transparency (through feedback) will help suppliers focus on what your needs are, instead of having to guess.

Transparency fosters open communication, collaboration and continuous improvement, and will help build your reputation for fairness and impartiality.

Finding a Better Way

Speaking at SciQuest’s Next Level Conference in Nashville, solution consultant Jason Hochreiter explained his organisation’s “Expressive Feedback” feature, which is a part of the Advanced Sourcing Optimizer module.

“Buyers need to get into the mindset of suppliers during the RFX Process”, he says. “Greater visibility of how their bid compares may actually help stimulate competitive behaviour and potentially lower bid prices during a sourcing event.”

SciQuest’s Expressive Feedback is named as such because it’s highly configurable, meaning that the buyer can choose when, how and what feedback to give suppliers during the sourcing event.

For example, the buyer may choose to only give feedback after the second round of bids, either sending out specific comments or using a green, yellow and red traffic light system to show at a glance if the bid is competitive, non-completive or significantly non-competitive.

Using the Traffic Light For Fast Decisions

Colours are a powerful tool to show suppliers at a glance how competitive they are, and if used intelligently, can encourage suppliers to make an impulsive decision to lower their bid.

Green: Consider what you need for the traffic light to show “green” – what does this actually mean? It could signal that the supplier’s price is within 10 per cent (or whatever percentage the user configures) of the target price. Or it could mean that they’re within the top five bids, without giving away their actual ranking.

Keep in mind that you wouldn’t want to alert a supplier to the fact that they are the cheapest, as it would almost certainly stop them from putting in a lower bid.

Yellow: This is where the psychology of feedback comes in. Hochreiter explains that it’s human nature to care about the loss of something (such as moving the traffic light from “green” to “yellow” status). This may prompt a fast decision to attempt to regain that status.

A supplier, seeing that they’ve slipped from the green bracket into the yellow bracket, may quickly submit a cheaper bid without considering the longer term implications of this action.

Red: Hochreiter cautions against using “red” for a supplier that you are interested in retaining. “If they see red, it’s likely that they won’t update their bid but assume instead that they are out of the race. Adjust the range as needed, so they’ll see yellow and will be more likely to compete.”

For more information about Advanced Sourcing Optimizer, please visit SciQuest website or contact SciQuest.

Lisa Malone, General Manager Procurious, was reporting from SciQuest Next Level 2016 last month, bringing you all the best bits.

From Drowning in Paper Contracts to CMS Utopia

Lack of visibility, time-consuming manual processes – it’s an all too familiar story in procurement contract management. One university shares their journey from contract chaos, to CMS utopia.

There are few procurement professionals in the world who haven’t dealt with paper contracts at some point. And very few, if any, who would look at this experience with any sort of fondness.

For the longest time, contract management has been a labour intensive process, with myriad issues caused by the use of paper contracts.

Every business suffers from the same issues, but not every business takes the steps to make a real change. We can all learn a thing or two from North Carolina A&T State University.

Drowning in Paper

North Carolina A&T starts as an all too familiar story, as you might imagine. NC A&T is one of the USA’s top historically black colleges and universities. It employs over 2,500 people, and educates over 11,000 students at any one time.

With an award-winning faculty, and programmes that focus on community engagement, it’s very much in demand.

However, it suffered from the same issues as many of its competitors. A manual contract management system (CMS), with little or no visibility on contracts, and an average of over 15 days to execute a contract.

At Next Level 2016, Nikki Williams, Director of Procurement Services at North Carolina A&T, talked candidly, and all too familiarly, about her experience of the process.

This included the process of scanning all the pages of a contract, walking (quite literally) to the third floor for signatures, and, of course, the inability to find a contract when it was needed.

On top of this, 99 per cent of the contracts were fully executed by a third party. Although the university would sign the contract, they would never get a signed agreement back from a supplier, and therefore never have a fully executed contract.

Contracts would rarely come back from the third party, and when they did, there was no repository to store, and find, existing contracts.

Chaos to CMS Utopia

Sharing their journey from contract chaos, to contract management utopia, Nikki explains their key goals were to:

  • Optimise the CMS process by:
  1. Eliminating paper contracts – this was an enterprise business goal for the entire university
  2. Reduce contract execution time from 15+ days to 5 days
  3. Reach 100 per cent fully executed contracts, with signatures from both parties
  • Deliver insights into the CMS process with:
  1.  A mechanism which tracked each contract throughout its life
  2.  Creation of a centralised repository for all contracts

Nikki shared the before and after implementation workflow diagrams – and the differences were startling. Rather than a heady mix of workflow rectangles, decision points and dotted lines, today’s contract workflow is a blissfully simple diagram. There are 4 task boxes, one approve or reject decision point, and only forward motion.

Full Steam Ahead

Using these forms, the procurement team can see that the request template is all ticked green. The form ties all the required, and specific, approvers to the workflow. Best of all, it’s fully automated.

The request form confirms that the supplier is not a student nor an employee (who they are not permitted to contract with), then channels it through the various approvers. All requests are also tracked through TCM (Total Contract Manager) by form number.

Once the request form is turned into a contract, a contract number is created, and tied to the forms so that every stage can be linked together. Once the vendor has signed the contract, it returns to TCM, which acts as the central repository. The system even completes basic information such as vendor names, department names, and approvers automatically.

The university now has a fully complete request workflow. The purpose of contract, department, and other information is contained within the request document. The contract goes to the appropriate person to approve or reject, and on that basis, procurement creates a contract. DocuSign is used to get both parties to sign off on the completed contract.

Challenge of Change Management

Asked about the roll-out of the process, Nikki acknowledges it has been a long one.  “We’re not just changing the workflow process, but we’re changing the contract policy at a Trustee level. Changing contract policy is driving the roll out, then we can rock & roll!”

For more information about Total Contract Manager, please visit SciQuest website or contact SciQuest.

Lisa Malone, General Manager Procurious, was reporting from SciQuest Next Level 2016 last month, bringing you all the best bits.

In Search of Your Perfect (Supply) Partner

With an estimated 200 million suppliers operating around the world, how can you be sure you have the perfect partner? Fortunately, here’s where technology can lend a hand.

Recent estimates put the total number of suppliers operating around the world at a staggering 200 million. To put this in context, that’s like having every person in the UK operating a supply business. Three times over.

The risks for procurement in this scenario are there for all to see. With an enormous number of potential suppliers, how do you know you are dealing with the right ones? Are you getting the best deal you could?

And with the suppliers you do have on board, how are you driving contract compliance? As well as being expected to deliver the value in the contracts, procurement needs to ensure that objectives are aligned with internal stakeholders, including the CFO.

Innovation in ‘Tail’ Suppliers

Common thinking in procurement now is that the profession can no longer ignore small- and medium-sized suppliers. By continuing to use the same suppliers, procurement misses out on innovation opportunities, as well as savings opportunities.

Traditionally these suppliers have been dismissed as ‘tail spend’, and ignored in terms of strategy. As we experience a period of unprecedented market change and volatility, procurement is now looking to these same organisations to help drive efficiencies, and competitive advantage.

The other factor procurement must take into consideration is how to measure the risk within their supply chain. One slight issue from a first, second, or even third tier supplier, could have drastic consequences for an organisation’s reputation.

Technology as Competitive Advantage

If organisations want to thrive in increasingly volatile climates, they need to leverage their technology. Effectively using IT capabilities and procurement technology can help develop a competitive advantage.

More and more organisations are streamlining traditional procurement activities, and freeing up resources for strategic projects. The ability to do this, while sourcing and managing suppliers, requires up-to-date IT capabilities and analytics, as well as best in class procurement technology.

Oracle’s aim is to provide its client with complete, open, and fully integrated solutions which help to reduce both the cost, and the complexity, of the IT infrastructure.

David Hudson, Business Development Director at Oracle Cloud Solutions, believes procurement needs to realise that the future is now.

“Delivering the right capabilities for Procurement professionals to drive greater collaboration, process standardisation, increased efficiency at a reducing cost remains a big challenge.

“At Oracle, we aim to help our customers achieve great cost savings and overall value, while reducing supplier risk, and increasing compliance. Technology, such as our Strategic Procurement portfolio, can help to deliver these key benefits, particularly when integrated throughout the process, as part of a modern Cloud solution,” says David.

Build Your Competitive Advantage

Procurious Founder, Tania Seary, has previously stated that, “Today’s supply chain executives must be brave and bold. They are expected to handle cataclysmic events and act with extreme agility.

“There’s one qualification – and I would go so far as to say that it’s the defining qualification for today’s supply chain leaders – that separates the highest performers from the herd. And that’s courage.”

This courage can be bolstered by understanding the role and benefits of technology, especially Cloud software and platforms, in procurement strategy, planning and decision making. By being more informed, procurement leaders can make these bold decisions, and ensure they are staying ahead of the competition.

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To find out more on how procurement can better manage risk and complexity, and integrate technology to help them thrive in a changing world, join Tania Seary and David Hobson for a free webinar on 7th November. Find out more information and register here.

The Benefits Procurement Can Realise from RPA Adoption

Understanding the benefits of Robotic Process Automation (RPA) can help sell adoption to the rest of the business.

In our first instalment, we described the fundamentals of robotic process automation (RPA), how it is typically used, and some pricing trends.

Here, we discuss some of the benefits of RPA, as well as what to think about as your organisation considers adoption.

The RPA Value Proposition

Purchase-to-pay organisations that are implementing RPA expect benefits in higher productivity and lower operating costs (Fig. 2).

RPA
Fig. 2 – Benefits Expected By Purchase-to-Pay Organisations with RPA

These improvements are realised in a number of ways, including:

1. Ability to bypass the IT department

Because RPA does not require IT development resources, and calls for a very limited technical infrastructure, businesses are able to undertake these projects by themselves.

However, a big lesson learned from early pilots is that IT needs to be involved in some capacity early in the project, even though this may bring in extra bureaucracy and potentially slow down progress.

Getting IT to sign off on performance demands, system availability, security infrastructure, etc., will pay dividends later when RPA is in production.

2. Shorter, less expensive development cycle time

The typical timeline to develop and deploy RPA is six to eight weeks, dramatically less than traditional, IT-led application integration projects. The latter’s cost to design, program, test and maintain system interfaces is significant. In some instances, it can exceed the cost of the software itself.

The ability to link systems through the user interface layer in a non-invasive way, without these costs, is core to RPA’s value proposition.

3. Labour Cost Savings

RPA vendors claim to deliver as much as 60-80 per cent in savings. Feedback from participants in interviews conducted by The Hackett Group indicated that returns are much more modest, but still significant at 20-30 per cent.

4. Increased Auditability and Consistency with Fewer Errors

Routine tasks executed by humans are prone to errors and inconsistent application of rules. Robots apply the same set of rules consistently and operate without errors.

Furthermore, all tasks executed by robots are recorded, and these execution logs are auditable.

5. Improved Scalability

Human capacity is difficult to scale in situations where demand fluctuates, leading to inefficiencies such as backlogs or overcapacity.

In contrast, robots operate at whatever speed is demanded by the work volume. Multiple robots can be deployed when demand exceeds the capacity of a single one.

However, an RPA must still work within the performance limitations of the software with which it is designed to interact.

Looking Ahead

We predict that RPA may have an impact on the number of people needed to perform mundane, repetitive tasks. Ultimately, this is a good thing, because many of these resources can be reassigned to more rewarding activities and job satisfaction will increase.

Fortunately, this shift in the profile of source-to-pay talent is consistent with the direction that procurement has been heading in for some time, moving away from transactional work, to more of a trusted advisor and partner to the business.

This will require complex problem-solving abilities, interpersonal skills, emotional intelligence and intellectual curiosity. There will also be a strong need for people who understand how to orchestrate a combination of automation solutions to obtain the best results.

Patrick Connaughton is the Senior Research Director, Procurement Executive Advisory Programme at the Hackett Group. He has published groundbreaking research in areas like spend analysis, contract life cycle management, supplier risk assessments and services procurement. You can contact him via email or on Procurious.

You can also learn more about Hackett’s Procurement Executive Advisory Program here.

eCatalogues are Just Spreadsheets, What’s the Big Deal?!

How many times have you heard someone compare eCatalogues to spreadsheets? It’s time to clear up the differences!

This article was originally published on Suppliers Matter.

That’s what the owner of a small office supply company asked me back in 1999. I was an independent supplier enablement consultant, and it was taking me longer than he wanted to create his first electronic catalogue in Ariba for his largest customer.

Here are the ten things I wish I had said as to why electronic catalogues aren’t “just spreadsheets”. I’ve also added a handful of insights that some newer eProcurement solutions now have to offer when it comes to eCatalogues.

The end result may “simply be a spreadsheet”, but it’s ensuring what’s in this spreadsheet that requires due diligence.

1) Appropriate Selection

eCatalogues need to contain all things that the customer buys from you, and none of the things you’re not supposed to sell.

If you have the contract to sell office supplies, and you’ve been given explicit instructions to only include office supplies, then you can’t include the kitchen sink.

When it’s time to export item information from the back end system, it should be just for your customer’s desired items.

Some larger suppliers have been known to insist their eCatalogues can’t be filtered, in an effort to sell more stuff. You don’t want to play those games.

2) Accurate Pricing

Obviously the prices for these items has to be accurate. Sometimes the calculation of the sell price can get complicated. For example, if it’s X per cent off list for one type of item, but Y per cent off for another. Or if there’s a list of most commonly ordered items that are more highly discounted than the rest.

If your customer finds one item that is priced higher than it should be, they’ll lose trust and question all other item prices.

Newer eProcurement platforms now support tiered pricing, bundles, configurable/custom options, etc., which can help when if you sell more complicated products or services.

3) Consistent Names

The item names are the first thing that a customer sees in their search results, so it’s important that they are strong and also follow a consistent naming convention, for example: Widgets, Small, Pack of 20.

Looking at a long list of items that are consistently named makes it easier for the customer to select the right item.

4) Rich Descriptions

This is one area where the initial effort up front can really make a big difference, but it takes investment. If you want to have your items found in search results, and also help your customer make the right choice the first time, you need rich item descriptions that thoroughly describe your items. You should take advantage of as much space as the customer can support. If they allow 255 characters, use them!

Some suppliers simply export the bare minimum item information from their inventory, which is often hard to understand. And what’s frustrating for buyers is that the supplier’s B2C site has often got great rich content. However, suppliers frequently have two separate item databases – one for B2C/marketing and one for B2B/eProcurement.

If you happen to sell items from popular categories, there are now rich content providers that you can use to enrich your information.

5) Granular UNSPSC codes

There are so many reasons to make sure that the UNSPSC codes assigned to your items are granular and accurate.

Granular meaning that you can’t just assign the ‘Office Stationery’ code to all your items, even the office furniture and computer accessories.

And accurate, meaning that if you’re selling a standard office scissor then you need to use the correct code, and not just the first reference to scissors you see when searching the UNSPSC database.

The customer may have purchase requisition approval rules reliant on the codes to determine who should approve the request. IT may need to approve the computer accessory, and facilities may need to approve the furniture. Plus, your customer’s reports will be much more accurate in terms of spend reporting.

A new consideration is eProcurement systems now have browsable category trees that rely on the UNSPSC to assign the item to the most appropriate category. You want your items to fall under the right bucket and not all get clumped into one.

6) Images for Every Product

This is a no-brainer. You have to make sure as many of your items (if not all) have at least one, nice looking image. They should be professional looking, high resolution, hosted on a publicly available webserver, and assigned to the right item.

And if your customer’s eProcurement system supports multiple images, then give them more. Many suppliers don’t take advantage of this, however, and just do the minimum (if that). Make your items shine!

7) Valid Units of Measure

You don’t want to do all this work and have the catalogue not load because your internal unit of measure is “Each” and the customer’s system needs it to be “EA”. You need to ensure that all your items are using the UOMs that your customer supports.

8) Internal Part Numbers for Automation

If you want to automate the fulfilment of the corresponding electronic purchase order and have it flow seamlessly into your system, the part numbers have to be perfect.

You can’t manually create an item in the catalogue file called WIDGET and expect it to work. You need to export the part numbers out of your system, and only use those part numbers in the eCatalogues.

9) Properly Formatted File

All this has to be exported into a properly formatted file that matches the customer’s file format requirements.

  • XLS vs. XLSX vs. CSV vs. XML vs. CIF vs. ETC.
  • Field titles with correct names.
  • Not exceeding each field’s maximum length.
  • Ensure all their required fields are populated properly.

This is where it can get a little technical, but it’s a one time effort.

10) Automating the Update Process

Fortunately, we didn’t have to update static eCatalogues very often, so doing this once or twice a year was acceptable.

New eProcurement systems now support simple CSV files, and allow suppliers to upload securely. This means suppliers are now in a better position to automate the export, any mapping, and upload using relatively simple scripts or product information management (PIM) tools.

Suppliers, what else would you have told him? (Apart from go do it yourself!)

What Procurement Needs to Know About Robotic Process Automation

Just what is Robotic Process Automation? And what should procurement know about it before putting anything in place?

Robotic Process Automation (RPA) vendors emphasise their product’s capacity to replace human operators, using phrases like “digital workforce.” In simple terms, RPA is a software application that runs on an end user’s computer, laptop or other device, emulating tasks executed by human operators.

Its purpose is to integrate or automate the execution of repetitive, rule-based tasks or activities. RPA does not require development of code, nor does it necessitate direct access to the code or database of the applications.

Current Robotic Process Automation Use

Most current RPA implementations are in industry-specific processes such as claims processing in insurance, and risk management in financial services. These processes, and their associated tasks, are usually high-volume, structured, repetitive and implemented on old technology.

Normally, the processes are extremely stable. There is no technology migration or modernisation roadmap involved, and IT-led integration would be difficult and expensive.

At present, the leading non-industry-specific RPA application is the financial close and consolidation process. According to our purchase-to-pay research, 23 per cent of companies are at the earliest stages of adoption, i.e., either in a pilot or with the technology partially rolled out (Fig. 1).

Robotic Process Automation
Fig. 1 – Robotic Process Automation Trends in Purchase-to-Pay

The remaining 77 per cent have no immediate plans for Robotic Process Automation adoption. Despite the low take-up level today, 45 per cent of purchase-to-pay organisations believe RPA will be one of the areas with the greatest impact on the way their work gets done in the next decade.

The Best Processes for RPA

It is not the type of business process that makes for a good candidate for RPA, but rather the characteristics of the process, such as the need for data extraction, enrichment and validation.

Activities requiring integration of multiple screens, as well as self-service inquiry resolution, are also ripe for RPA. The key is that RPA is best deployed in a stable environment where no changes to the systems are on the horizon.

Other possible choices include processes requiring multiple software applications to execute different, but repeatable, activities and tasks.

RPA Pricing Trends

The pricing model for RPA is still evolving. Today, vendors are pricing RPA based on the cost of the full time equivalent (FTE) staff member it is replacing. For example, an RPA vendor may quote a price per robot that is one-third the cost of an offshore resource doing the work.

Onshore FTE pricing is being quoted closer to one-ninth, or 11 per cent, of the cost. This pricing model, developed to compare the cost of outsourcing a process versus automating it with RPA, essentially positions Robotic Process Automation as a service, not a software solution.

In our view, this model is inconsistent with industry standards governing the way software is typically priced. Therefore, we encourage buyers to seek an alternative gainsharing model where possible. This will both mitigate the risks of early adoption, and provide a strong incentive to the supplier to deliver results.

Patrick Connaughton is the Senior Research Director, Procurement Executive Advisory Programme at the Hackett Group. He has published groundbreaking research in areas like spend analysis, contract life cycle management, supplier risk assessments and services procurement. You can contact him via email or on Procurious.

You can also learn more about Hackett’s Procurement Executive Advisory Program here.

Welcome to the Uncanny Valley

Why are we happy to watch movies with AI and robots, but feel disturbed by near-identical humanoid robots in real-life? Welcome to the Uncanny Valley.

Considering the robot theme of my last two posts, I was somewhat pleased last week to have picked up a radio show from the BBC in their series ‘The Why Factor’ called “Fear of Robots” in which they make some of the same points concerning our assumptions that robots will always be benign.

The presenter found himself somewhat disquieted by a robotic seal pup, and completely disturbed by an almost-human android.

He had, so the saying goes, entered the uncanny valley. Although we humans react (and sometimes over-react) very positively to human-like features – cartoon characters, dolls and the like – we have a generally very bad response to simulations which are very, very nearly, but not completely, life-identical.

The Uncanny Valley

Despite the extraordinary advances in CGI, many filmgoers find greater satisfaction and easier suspension of disbelief in watching old-style animation, than movies which seek to recreate the real world.

The characters just don’t move right, or look right, or something.  The difference is so slight and subtle, yet rings huge alarm bells in our heads.

One contributor to the radio show described very-near-human robots as giving us the same heebie-jeebies as walking corpses might. After all, they are cold, their skin tone is wrong, they don’t move naturally. Of course they freak us out.

Away from the uncanny valley, though, we love the broader approximations to human behaviour.  As we turn away in discomfort from the close-to-real, we delight in the more grotesque caricature.

It seems we’re more comfortable with the messy, chaotic, imperfect real-world, than a more sterile near-perfection.  Perhaps that speaks to a deep aspect of human nature, something that we software developers might do well to pay heed to.

Emotional Reactions

There are clear cases of this emotional reaction to human-like behaviour in the use of software, especially at work.

The response that many, if not all of us, had to that [expletive deleted] animated paper clip when it popped up and said, “I see you’re trying to write a letter, would you like some help with that?” was no different to the reaction we’d have to the co-worker who would keep dropping by to say, “You don’t want to do it like that. Do you?”.

Approximating the real world, including human behaviour, when developing the software that we need to interact with, is thus a complex matter.

Get it right and the user experience is one of delight and sustained engagement. But go too far and users are actively put-off by the feeling that the software itself is somehow working against us.

At GEP we’ve been working on user experience technology that puts the human at the heart of process.  We are, of course, some way from software that has a human personality. And although the possibilities are immense, they are not without risk.

Imagine sitting down at your desk each day to find that overnight everything has been rearranged to make it slightly more convenient for you.  Perhaps so you don’t have to reach so far for the telephone, or your chair is aligned more ergonomically to the monitor.

Such things could dramatically improve our day…or screw it up entirely, leaving us feeling irritated or even violated.  As creatures of habit we naturally reach for the place where the telephone is, which is not always ideal.  It just is.

A Real-Life, Virtual Assistant

But there is another, more subtle, set of possibilities that we might permit to assist us without, to be frank, freaking us out.

You might imagine an assistant who begins by learning how you work, where the shortcuts are that you naturally take, and how other might be offered to speed things along.   Then when the time is right, you assistant might suggest you have some choices, all in good time, no rush.  The assistant makes notes of how they can improve your life and recommends rather than enforces changes.

In time you might start noticing that there is less clutter around and you’re completing tasks faster without having been trained, directed or instructed.  User consent to small changes that help keep things tidy could be far more effective than wholesale re-ordering of menus and icons.

It’s something we have to keep in mind when developing software that should be designed to help you work.  There is a fine but definite line between being helpful and just downright irritating.

It reminds me of the wonderful scene in Father Ted where a sales assistant tries to tempt Mrs. Doyle with an automatic tea-maker.   “It will take the misery out of making tea.”  Her response?  “Maybe I like the misery!”