Tag Archives: procurement technology

The Three Laws of Robotics Aren’t. So What Now?

The Three Laws of Robotics, as created by Asimov, don’t exist. But, as we move to a more automated world, should robots and AI fall under greater oversight?

Zapp2Photo/Shutterstock.com

Download the latest GEP white paper on the drive to an automated world here

In my previous post on the subject of the coming era of robotic process automation, I mentioned Asimov’s seminal sci-fi work The Caves of Steel. In it Asimov wrote of The City as the dominant force in human lives of the future:

“The City was the acme of efficiency, but it made demands of its inhabitants. It asked them to live in a tight routine and order their lives under a strict and scientific control.”

Asimov’s suggestion that there is a cost to progress might be seen as prophetic, but I think he was just one of a long line of writers who have warned that the future might be a bit ropey if we just pursue change in the name of progress, for its own sake.

But for all his attempts to conjure a dystopian image, Asimov was fundamentally a “technoptimist” with a repeating theme in his stories that progress would ultimately always be positive. In fact, his philosophy of robotics – and his “three laws” – have been so tightly woven into modern culture that it seems we hardly give a thought to the potential threats to our way of life, and perhaps to our lives from the advent of a totally automated future.

An Automated Future

Without labouring the point too much, the Three Laws of Robotics essentially mean that, in Asimov’s world, robots are inherently safe, trustworthy and beneficial. In fact, it is simply impossible to build a robot that does not comply with the three laws, the very architecture of the robotic AI being hard-wired around them.

It is purest fiction, of course, although to speak to some enthusiasts for the subject, Asimov’s Laws really do exist.  But they really don’t, and that could spell trouble.

Life imitating art is all very well, but there is nothing whatsoever to dictate that an automated future can be assured as a “good thing.”

On the same day as I’m writing this piece, there are two news stories on the BBC website. In one, it is announced that robots will be working in two Belgian hospitals as receptionists, guiding visitors to the correct locations.

In the other, we’re told, a researcher at a university in the USA has built a robot that autonomously decides whether to inflict pain and bodily harm on a live human subject.

That the microcode for the two systems could be somehow swapped, or cross-fertilised, is the stuff of real dystopian sci-fi and, whilst highly implausible, it does raise questions about whether some progress is happening without sufficient oversight.

Robotics & Automation in Procurement

There is disquiet in many circles about the use of drones in warfare, and the step from human-operated to robotic drone is really only a matter of systems integration.

There are no Three Laws to guarantee that AI, robots and automation will be to our benefit.  Yet they may very well be.

There are grounds to be hugely optimistic about what technology can do for us, from carbon capture and storage, to non-polluting safe transportation, to dramatically improved health and longevity in the poorest parts of the world.

Even in our little corner of the world we call Procurement, the sky’s the limit if we want to pursue automation. The potential to dramatically transform how we operate is very great indeed, and only a matter of investment and a few person-years of effort out of our reach.

But in all of this, it seems to me, it is we who should direct and dictate how that progress is delivered and what it actually does.   Instead of being passive consumers and falling in line with the next developments, which may substantially change our working lives, the procurement industry has an opportunity to map out what the future could and should look like, and how we want the machines to work. For us.

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Robotics are the future, and the sky’s the limit for automation in Procurement, say GEP. For more on this, download the latest white paper research.

For more information on high-performing procurement software, visit the Smart by GEP website.

The Fear of Technology in Hospitality

Legacy systems and poor past user experiences are creating a fear around technology in the hospitality industry.

Brian A Jackson/Shutterstock.com

“I think it’s difficult for technology to get to the top of the list of things to do next” said Jane Pendlebury, CEO of HOSPA, in our recent roundtable on the topic of technology in hospitality. And with that, she nailed what I had been dealing with ever since InstaSupply started.

There is always something more pressing that needs attention before looking at a tech solution. Even if that tech solution will save you, or make you the money to pay for that other pressing something.

There’s this fear of the unknown that’s keeping a lot of hospitality businesses stuck in the past and relying on tools and systems that for a lot of other industries became obsolete years ago.

Hospitality Lacking Information

Lack of information and education is a key factor here. Peter Hancock, CEO of Pride of Britain Hotels, rightly pointed out that most people involved in the running of a hospitality business aren’t necessarily the “tech-iest” of individuals.

Experience with older systems and their tendency to create rather than solve problems has left a bitter taste in a lot of mouths. Couple that with expensive upgrades that weren’t made clear at the start of the contract and we have an added layer of mistrust.

The result of all this is an industry that’s still heavily reliant on paper, lacking transparency on spending and full of overworked staff. Front of house staff not only have to ensure their guests enjoy a great experience but in many cases handle a lot of finance and procurement tasks that are absolutely outside their job description.

Lightening the Workload

Technology is created to help lighten the workload and improve productivity, not to take away jobs or swindle businesses out of money because they don’t understand what it does.

Just as a washing machine will handle a lot more clothes and get them done a lot better and a lot quicker than you would by hand, so too will the right technology remove manual data entry, managing 145,789 spreadsheets and let you know exactly what you are spending and on what in real time.

Watch our full discussion on the fear of tech here:

InstaSupply is all about working smarter and simplifying business through technology.

InstaTalks are about bringing great minds together and uncovering where the fear of tech comes from when it comes to business operations.

Finding out what the pain points are and then educating people in plain language. No jargon, no small print. It’s time to understand that technology is a revenue generator, not a budget sinkhole. 

Why Requisitioning Must Be Part of ERP Conversations

Requisitioning (or asking for what you need) is a key part of the procurement process. So why is it frequently sidelined in ERP discussions?

This article was first published on the Coupa Blog.

Having either implemented or worked with some of the major ERP systems on the market, I think I’m on safe ground when I say, nobody chooses to do requisitioning through their ERP system. They settle for it.

ERP systems are largely built for finance and the controllership. End users are often not taken into account. Their requisitioning modules are notoriously difficult to use, which is too bad because requisitioning is how most non-finance users — aka. everyone else in the company — will interact with the ERP system.

In fact, people putting in requisitions to get what they need to do their jobs represent a large segment of non-finance users feeding data into the ERP. If you burden them with a system they won’t use, or that they’ll use in a sloppy way, your ERP will have data quality issues. To avoid having to settle for ERP requisitioning, it’s to everyone’s benefit for procurement to be part of the ERP discussion, as a strong advocate for the end user.

Advocating for Procurement

I’m not saying that will be easy. As I’ve written previously, organisations need to think more broadly about their whole finance system, which comprises multiple interconnected processes, from sourcing to the point where something is paid for and entered into the record.

The ERP system addresses the back end, and it’s designed for finance to be able to do what they need to do regardless of how the data gets in there.

So, the discussion doesn’t usually extend to the front end—sourcing, contracts, approvals, requisitioning—which is where a lot of that data comes from, because the thinking doesn’t extend that far. It’s not easy to break down these silos.

In situations where I’ve been the advocate for the needs of procurement, I’ve had to fight pretty hard to get that perspective considered and I’ve often been the lone dissenter in the room.

  • Get Real

You need to be a realist. There are always resource constraints, and there’s a hierarchy of needs within finance, and user-friendly requisitioning is never going to be at the top of the list. But when requisitioning is ranked seventh out of six fundable implementation projects, the potential for settling becomes very real. Hello, heavy ERP requisitioning module.

  • Map it out

One way to avoid that mistake is to map out the whole process, because it’s not completely linear. Data flows from one process into one, or several, others. A lot of times an ERP decision is made before these processes are mapped out. But, when you map it all out, it becomes obvious that quality and consistency of requisitioning is critical for getting finance all the data they need to make the ERP system a single source of truth. 

  • Learn the language

The main requirement for a better-than-ERP experience is that the requisitioning system be user friendly. You can’t push a heavy ERP requisitioning system on a marketing associate fresh out of college, or on a seasonal retail worker.

But usability is one of those subjective, soft terms that may not always resonate with the finance audience. To advocate effectively, understand the needs of finance and speak their language. For example, if you’re talking to a controller who is a worldwide tax authority, framing it in terms of compliance and data quality is a much better approach.

  • Not Amazon-like

You also need to break down what you mean by user friendly. Every ERP vendor is going to say their requisitioning module is user friendly. If no one is looking out for non-finance users, that box just gets checked.

How user friendly does it need to be? You’re probably expecting me to say, “It should be as easy to use as Amazon.” I would personally love it if it could be so, but there are different requirements for business buying that for consumer buying. But, it can be much easier than most ERP requisitioning modules make it.

A good system approaches requisitioning broadly. It’s not just asking people to fill out purchase orders. It should really be a way for an employee to get anything they need to do their job. In fact, I’d rather they didn’t have to even use the words ‘purchase order’ or ‘requisition.’  We’re simply helping them buy things.

Ideally, they should be able to click a bookmark, get to a portal and then get in through a single sign-in. They land on a homepage where they see relevant buying policies and have visibility into all of their transactions

There should be smart search capabilities, tailored towards a user who is probably somewhat resistant to using the system. They can’t get irrelevant results, or come up empty. They have to be able to quickly find what they want, or find out how to get it.

If it’s a catalogue item, the actual policy pops up, which will guide them how to buy it. If they need a new computer monitor, maybe it comes back and says, “OK, you have to log a ticket for IT because they do provisioning.” Or if nothing is there, it will guide them towards making a free form request. But they don’t even need to know these terms. All they need to know is what they want.

Heavy and Cluttered

In contrast, the requisitioning modules of the major ERP systems are often heavy. The home page may be cluttered with lots of finance information that’s not relevant. The email notifications can be complex and confusing.

There are a lot of fields to fill in so finance can get all the codes and data it needs – provided the would-be requisitioner doesn’t take one look at it, decide it would be faster just to run down to their local Staples store, and expense the darn thing. That’s the kind of thing that happens when you settle.

There are good reasons why requisitioning is not the top priority in the ERP discussion, but neither is it right for it to have no presence or priority. The real impact of user-friendly requisitioning is better data and better compliance.

To make sure your company doesn’t settle, somebody needs to advocate for all the people who aren’t in the room, but are going to have to use the system, and convince finance to give it the proper priority.

The ideal situation is that requisitioners don’t have to think about finance at all—or procurement for that matter. The irony is that to accomplish that, the folks in finance have to get together with procurement and think hard about requisitioning.

Resistance is Futile…Or is it?

Is resistance to automation of procurement processes futile? Or are we missing the benefits that automation will ultimately bring to the profession?

You can download the latest GEP white paper on the drive to an automated world, and why resistance is unnecessary, here.

The cannon of science fiction is full of tales of the battle between liberty, exemplified by human free will (including the freedom to screw everything up royally) and tyranny, portrayed as submission to an overwhelming force.

In many cases the “assimilation into the collective” or whatever, is not an unconditionally negative prospect. The promise of an end to suffering and provision of all human needs is often conveyed as the ‘upside’ of the deal to subjugate humanity to forces beyond our understanding.

Automation – The Dark Side?

From Childhood’s End to The Matrix, there’s a definite cost-benefit analysis to be carried out by the protagonists during their struggles to overcome the supposedly overwhelming power of the dark side of the story.

In fact, in the latter, the movie’s clichéd traitor – they even named the character “Cypher” – sells out the heroes on the promise of a return to the simulated ‘real’ world with the words, “Ignorance is bliss.”  And when asked by the agent of evil, “Then we have a deal?”, he replies, “I don’t wanna remember nothing.  Nothing! You understand?”

There is even a branch of anthropic philosophy than contends that our reality is likely to be a simulation run by an advanced post-human intelligence. As coherent and convincing as some of that reasoning appears to be, the fact remains that there is no possible way this hypothesis can be proved or disproved.

Like all matters of faith, this notion is utterly irrelevant when we attempt to construct a set of rules that will let us predict what will happen in (what certainly appears to be) the real world.

Rise of the Machines?

Recently it has been suggested at some of the procurement industry’s leading conferences that business is beginning to enter a phase that will be dominated by artificial intelligence and robotic process automation, and lead to the eventual replacement of the humans in the process.

Dissenting voices are heard to cry “nonsense,” or more colloquial versions of the same, but the arguments are nonetheless compelling. Only this time, they have a certain amount of evidence to back them up.

It is true. The technology exists today, in varying states of maturity, which – if synthesised into a single entity – could effectively do away with human involvement in the supply chain. From AI-run decision making, to automated manufacture and delivery, to fuzzy logic-based distribution of spend across a supply base, the characteristics of today’s procurement activity could, quite readily, be encoded and turned over to a software overlord.

Other sci-fi classics, the likes of the movie ‘Logan’s Run’, and the book ‘The Caves of Steel’, deal with the machine-run production of goods and services in equal measure to the imposing of external force on human freedom. And as life imitates art, there will naturally be greater degrees of this emerging.  Today’s 3D printer is surely tomorrow’s Star Trek Replicator.

The End for Procurement?

But, whatever the generations of the future will accept as everyday technology, the idea that we’re approaching a defining moment, beyond which procurement professionals will be irrelevant, must be viewed with a good degree of scepticism.

There’s no doubt automation works really, really well when it comes to replacing easily mapped and understood processes, from assembling a car from a standard kit of parts, to processing a contract-compliant purchase order through to invoice payment.

But the simple fact is we just don’t understand enough about the world, human behaviour, the markets, the climate, indeed any part of the future, to be able to encapsulate all our business rules into a single algorithm that the machine can follow to manage supply and demand for the rest of time.

The landscape in which our largest corporations operate is truly chaotic, in a mathematical sense, and deriving a simple set of rules to automate demand and supply across such organisations is, I think, beyond us today.

One of the very drivers of modern prosperity is the ability to “make a buck” and any kind of completely automated process necessarily eliminates margin at source. Negotiation between buyer and supplier AIs will not only be mind-bogglingly rapid, but likely to end in stalemate – and the same stalemate as the last time.

If we lose negotiation, then it seems to me that we will lose innovation, motivation and the result will be stagnation.

Resistance is Unnecessary

The future will be radically different to the present.  It always has been and always will be, and all predictions as to what it will look like are inevitably wrong. Including this one.

But with that uncertainty comes opportunity. Automation in procurement will certainly be a big thing in the future, but it will be complex, it will be messy and it will need human brains to make it work, and not just to write the code.

The human brains that work in procurement today are those that will guide the whole world of supply forward into a brave new world. Reports of procurement’s demise have been overstated, naturally, but we can still take control and make the machines work for us.

Resistance isn’t futile. It’s unnecessary.

GEP Banner

Automation doesn’t mean the end for procurement, and the benefits of automating processes vastly outweigh the drawbacks, say GEP. For more on this, download the latest white paper research.

For more information on high-performing procurement software, visit the Smart by GEP website.

Are Procurement Professionals Stuck in the Stone Age? – Part IV

As B2B technology companies are beginning to realise the benefits of being easy to use, what changes do we think will happen? How do we envisage the B2B tech space evolving within the next 5-10 years?

Photon photo/Shutterstock.com

Market Dojo put an article together examining what it would look like in 10 years time, and how it will have to adapt and change to remain ahead of the game.

With a focus on Market Dojo as an eSourcing company, we came up with a few conclusions, most of which can be applied not only to eSourcing, but to B2B technology companies as a whole.

The table below looks at different functions of technology and predictions on how they might change within the B2B landscape.

Function Change
Mobile Technology Whilst consumers are ever increasing their use of mobile tech, are businesses going to become more reliant on this in the workplace? The simple answer is yes. B2B companies need to be aware of becoming even more responsive, searchable and usable across the mobile technology of the future?
Google (power of the web/search) Will this develop enough and become intelligent enough to make other applications obsolete? Such as developing  more intelligent supplier search function and becoming the de-facto supplier database though their categorisation.
APIs The ability to integrate between solutions is already possible, but in the future it is set to become even more simple. We expect it becoming ever easier to integrate with any (software) component through standard connectors, so that best of breed becomes as attractive or even better than ERP solutions.
Amazon/Google/Apple B2B platform Established companies moving into other areas (E.g. developing eMarketplaces) and threatening the smaller providers with their ability to quickly develop technology. This is already happening.

Procserve, for example, have built links with Amazon for B2B purchasing. (See full article here.)

Eradicating the user interface Moving from slick user interface to ‘no user interface’, as per this Coupa article.

A rather controversial idea, but we can see some logic that instead of having to log into a tool every day, instead it fits around your life so you can interact with it outside the tool via Voice Activation such as Google Voice, Siri, Cortana, etc.

True commoditisation The final stage of the technology lifecycle is commoditisation. (See Market Dojo’s video on the four stages of technological growth taken from a TED lecture.)
Integrated market information How global news stories affect various aspects of your business and what technology can do to make companies more aware and faster.
Also how tech can keep companies updated with what’s being said about their brand. (Ref. Owler.)
More focus on AI & Automation/robotics The software could take actions when it ‘thinks’ it is needed. e.g. within eSourcing – delay an auction due to lack of liquidity, or suggest a better lot structure based on the bids received.
Public Sector Procurement A big shake-up in the public sector software market to disrupt the legacy tools with their complex workflows and procedures to be a slick tool that people enjoy using. E.g. Matrix SCM
IT involvement & Security barriers IT’s function is changing from an in-house design/build/implement function to a strategic business partner who guide business stakeholders in the selection of appropriate SaaS systems.
Marketing How will people find us in the future, compared to how they find us now?
How will the power of search change in the future?
At the minute, the focus is on Content Marketing, but what next?
More personalised, more interactive marketing?

As you can see, we expect the Market Dojo platform to become more intuitive and user-friendly over the next few years. Is this true of all business softwares? Will we (realistically) be able to prioritise usability and design over functionality and features?

The authors have pondered long and hard the question of when the B2C approach will catch on in the B2B World. We think it is progressively changing, but will, for the reasons listed in previous articles, take some time to change.

New suppliers with easy to use solutions are coming to the fore, Coupa and Egencia come to mind. But we postulate that it will be a slow change process, with perhaps another 5 years before the whole B2B solution market feels like today’s B2C environment – at which point the B2C landscape will possibly be different again!

To stay at the forefront of technology, can B2B companies look to B2C arena as a gauge of what’s to come?

What are your thoughts?

Market Dojo and Odesma have partnered to combine their intuitive eSourcing software and expertise in offering business advisory services to offer clients a winning procurement solution.

Are Procurement Professionals Stuck in the Stone Age? – Part III

If procurement technology is stuck in the stone age, what do we need to do to modernise? We take a look at some B2C examples for inspiration.

So far in this series, Market Dojo and Odesma have discussed whether procurement technology is stuck in the stone age, and why B2B software isn’t keeping up with its B2C counterparts. This article examines some B2C companies getting it right.

This article was originally published on Market Dojo.

Slowly but surely, not only do we see B2B companies adopting B2C ideologies, but some B2C companies are jumping in and filling the gap left by B2B providers. Granted, the complexity of B2B companies isn’t completely covered by the consumer oriented companies, so they are aiming more at the smaller companies. But all the same it still highlights a shift in the market.

By taking a couple of examples, we can see where these changes are happening and examples of B2C solutions doing it right.

Uber and Freight Brokering

MD - Uber

The transportation networking company Uber originally focussed on the B2C space by bringing together people looking to travel in the same direction, aggregating the demand and sharing out the cost of the journey to charge a lower price.

Targeting those traveling for personal reasons and commuters, they are paying special attention to the business sector with their latest development of business profiles.

More recently, focus has shifted to the freight industry where they hope to achieve similar by introducing mobile-based freight brokering technology. Not only will there be a reduction in number of ‘empty miles’ travelled, mobile-based freight brokering technology can help lower operating costs, improve fuel efficiency, boost asset utilisation and enhance resource productivity.

Benefits which Uber have been reaping since they formed in 2009.

Amazon Business

Amazon touch briefly on the B2B side with Amazon Business. With benefits like integration with purchasing systems and order approval workflows, they have adapted Amazon to create Amazon for business.

This could have extreme effects on the the current technology providers, should Amazon develop an eSourcing/eAuction aspect. It would not be that difficult for them to make the shift.

Another area in which Amazon has moved to a B2B focus is with their hosting options. This isn’t an adaptation of their B2C offering, but an entirely new market for them.

Software as a Service

MD - Airbnb

Airbnb, for example, provide a marketplace that allows one to search for and/or offer accommodation. Their sleek design, mobile-optimisation, carefully thought-out filters, and simple sign-in methods are something to be rivalled. Having relied heavily on investment, they have been able to afford the development costs and created a really neat SaaS product.

MD - ProcurifyProcurify is another such example of improved, B2C-esque usability. They aim to provide P2P technology without the presumed “boring” grey-scale colour scheme and clunky design that we have seen (and expected?) for so long. They have responsive design and mobile applications available. With their bright colours and simplistic design, they are very appealing.

Social Networks

But will this new technology, mainly adopted by new companies, only appeal to the millennials of today? Will previous generations appreciate this or seek their old faithful, familiar, providers.

Jive is also an interesting example. Marketed as “The Next Leap for Social Intranet Software“, their user interface is very similar to that of Facebook. Or, at least, Facebook 3 years ago.

MD - Jive

The concept is brilliant – provide companies with an internal social platform to share company news and collaborate. However the user interface still leaves something to be desired. Granted it’s one of the best on the market, and I am in no way criticising them specifically, but overall, there is still a lack of ease-of-use in B2B social platforms in comparison with B2C.

Is this because we expect it, because more complexity is required, or because the design needs to remain colourless and simple?

LinkedIn have recently redesigned their ‘groups’ making them more user-friendly and appealing, so increased usability is something which they pay attention to. But the creativity of design is definitely lacking in the B2B world. Why does business have to be so boring?!

The procurement community is lucky to benefit from the industry specific, social platform Procurious, which, with its bright colours and easy interface has a very B2C feel – which differs greatly from LinkedIn.

MD - LinkedIn and Procurious

In the picture on the left, you can see crowded text and pictures with no clear direction of what to look at next with a few small tabs at the top to interact with.

On the right the information on the profile page is broken down into tabs and the contact information on the left-hand side makes it easy to see details of an individual.

It seems that Procurious, being a more recent development, has taken learnings from other solutions (in its space) to create a more user friendly social media platform. Whilst LinkedIn (above left) is busy and cluttered, Procurious provides a more simplistic, clearer view. If you haven’t done so already, definitely recommend getting involved there and signing up to the tool.

Global Trading

MD - Alibaba

Alibaba provides an online platform for global wholesale trade. They launched in 1999 and attempt to make sourcing of goods and suppliers more simple for businesses, working with millions of suppliers across the globe.

Within the tool, they have a categorised search option for buyers with the ability to ‘get quotations’ from the approved supplier list within Alibaba (AliSource Suppliers).

So how will B2B software and technology evolve in the next decade? Make sure you read the final part of this series to see what we think.

Market Dojo and Odesma have partnered to combine their intuitive eSourcing software and expertise in offering business advisory services to offer clients a winning procurement solution.

Raise Your Glasses to the Cloud

Does being stuck in our ways, and doing things “the way they’ve always been done”, mean procurement misses out on the benefits of the Cloud?

You can download the latest GEP white paper on the impact of cyber security, and the benefits of a cloud-based procurement technology solution here.

You can buy flip-flops that have a bottle opener built in to the sole.  Notwithstanding the sartorial choice of sporting said footwear, the synthesis of the two household objects into one ‘solution’ was clearly something born of necessity, or desperation, or more likely both.

The crown cap on a beer bottle, the correct name for which is actually a misnomer – the ‘crown cork’ – is 124 years old and still going strong. The ubiquity of the particular type of stopper means that almost everyone can access a tool designed with the express purpose of removing one, but finding oneself on the beach without one can lead to some unusual inventions, or some risky and occasionally painful improvisations.

Bottle Opener Flip Flops

Necessity – the Mother of Innovation

What is surprising is that it took seventy years for someone to come up with the bright idea of combining the crown cap with a screw thread on the bottle – negating the need for a tool altogether, and even today bottles of beer that one can open with a simple twist are far from the norm.

Interestingly, that most useful combination is still limited to mass-production, mass-market brands, and rarely or never to be found on small-scale, independent, or craft brewery products.

The same, of course, applies to wine. There is unquestionably a huge resistance to screw caps on premium products from the industry, the consumer and the media alike.  Until, that is, you actually talk to the real experts.  Not the self-appointed armchair connoisseurs – I’m not being denigrating, I’m definitely guilty-as-charged – but those who really know their stuff.

I’ve met wine producers, merchants and critics all of whom are desperate for the screw cap to be considered as acceptable at the “high end”, as at the mass-market end, because the product is only better as a result.

Consider the labour-of-love winemaker who has to play Russian Roulette with their prized vintage every time a piece of possibly-contaminated tree bark gets stuffed in the neck of a bottle.

But, on the whole, we consumers feel it cheapens the product, and the lack of ritual and satisfying “pop” detracts from our enjoyment of the contents. The real experts say it’s just snobbery – and, of course, they’re right. But today there remains a relatively low ceiling on what a restaurant can charge for a bottle with a screw cap. Good wines simply don’t come in screw-capped bottles.

What finally convinced me of the ridiculousness of that position was finding myself with wine but without means of access. Today I find myself tutting in a very English manner if I find I need to go get a corkscrew to open a bottle.

Migrating to the Cloud

I find myself in the same mindset when thinking about the Cloud.  For a while I felt somehow discomfited by the idea of putting all my files, and music and images and books and data in the cloud, preferring instead to create my own personal cloud of NAS drives and IP sockets so that I could access what I wanted, wherever I was, but I would still ‘have’ all my data.

How daft is that? If my NAS drive goes down (which it has) who has to run around in a panic trying to fix it? If I move house or country (which I have) who has to handle the business of relocating and reconfiguring equipment to deal with the change?

You see the point, I’m sure. I was on a hiding to nothing. Insisting on a model of how data storage should be, because that’s how it’s always been, supported by some spurious mythology of physical location, is no different to saying screw-caps cheapen the experience of drinking wine. Nonsense.

Cutting away all the snobbery and enjoying wine starts and ends with glass to mouth. What happens up to that point might be interesting, but it’s not in the least relevant.

Now I find myself tutting in overly-dramatic fashion if the service or software I need is NOT available in the Cloud. Install? Oh, really!

Cloud computing is a loaded subject. There are genuine concerns, and genuine things to be concerned about, when considering moving business critical systems into a new environment.

But, let’s make no bones about it, you need to be thinking about those things anyway. The threats and risks won’t go away if you choose not to pay them any attention.  But the opportunities sure will.

We’ve applied a great deal of brainpower to design and build a cloud procurement platform that delivers a massive bang-to-buck ratio, in a secure and highly performant environment, and our two-part paper, ‘Securing Procurement in the Cloud of Tomorrow‘, is designed to help business and IT people alike start a meaningful dialogue on the subject. The Cloud is here, it’s huge, and growing.

But even now I catch myself out. Trying to improve performance of my video editing capability at work I spoke to our splendid and ever-cheerful head of IT about getting some kind of box dedicated for the purpose.

“Have you thought about a cloud video-edit-suite solution?” he said.

Well, d’uh!

Enterprises should be moving their procurement processes to the Cloud, say GEP. For more on this, download the latest white paper research.

For more information on high-performing procurement software, visit the Smart by GEP website.

Are Procurement Professionals Stuck in the Stone Age? – Part II

Is procurement losing ground by having antiquated, “stone-age” technology solutions? Why are B2B solutions struggling to keep up?

This article was originally published on Market Dojo.

In the second article in this series (you can read the first part here), Anya McKenna, of Market Dojo, and Ed Cross, of Odesma, ponder why B2B software remains stuck in the past, while B2C software is moving forwards in leaps and bounds, providing users with the experience they want.

The question is why big B2B software solution providers have not changed and emulated B2C? We would postulate the following reasons:

  1. Customer demand or acceptance.
  2. Drive for consulting revenues by providers.
  3. Decision makers equate complicated to valuable.
  4. Industry  Research organisations are in the pocket of those who pay and report as such.
  5. Existing suppliers balance sheets stifle innovation or change due to the impact on profit of asset write downs.
  6. Big business inherently do not trust small innovative start ups / CIOs don’t get fired for selecting the old guard.
  7. B2C companies are not interested in selling to the B2B customer base.

In order to fully understand this, we need to look at each of these points in more detail:

  1. Customer demand or acceptance.

Interestingly there does not appear to be a huge clamour amongst B2B customers to secure simpler, easier systems.

Take SAP or Oracle for example. They continue to dominate their sector (SAP acquired Ariba for $4.3 billion), and continue to thrive, making little effort to simplify and re-invent with ease of use at the heart of their solutions.

Whereas, in the B2C arena, there is no choice for the providers. Millions of users’ voices are being heard, and all leading solutions, from Amazon to AirBnB, are simple and easy to use. Perhaps the imperative to change amongst B2B players is just not being voiced by action.

  1. Drive for consulting revenues by providers.

The prevailing model for providers is to maximise revenue (after all they answer to shareholders), and they have predominantly built models that support this goal. They do this by securing licence annuity, and augment this with implementation, training, consultancy and delivery services.

Take a leading and long established eSourcing provider for example. They provide a complicated and unintuitive, but effective, solution for e-Sourcing, which they support with a very large consultancy practice (600 professional staff delivering revenues of greater than €70 million).

Though figures are not available we might hypothesise that at least 50 per cent of the revenues are consulting and support related. Clearly it is not in any legacy B2B providers interests to simplify the user interface, due to the resulting loss of support revenues.

  1. Decision makers equate complicated to valuable.

Is it human nature in business to expect business solutions to be inherently complicated?

Look at Jive, a sort of Facebook for business. Whereas Facebook is really easy to navigate and personally manage intuitively, Jive is not.

Given Facebook came first, and Jive built a similar tool, albeit for a closed company environment, is it that those that selected it, measured its value in terms of its complexity?

  1. Industry Research organisations are in the pocket of those who pay and report as such.

A rather contentious point perhaps, but when looking at Gartner’s report on the e-Sourcing market a few years ago, they had only just added a 7th criteria to their analysis: Ease of Use.

Gartner had historically focused on functional components – i.e. spend analysis, contract management, etc. (making up 4 of 7 criteria) – alongside technology platform and business services.

Additionally the analysis of providers generally only lent itself to the bigger or more established players. The 2013 report included fewer than 30 suppliers, with the leaders in their opinion being the likes of IBM, BravoSolution, Ariba, GEP, and SAP.

Very few emerging and new players are included. This may be due to time constraints, but clearly is at the detriment of newer, and easier to use, solutions.

  1. Existing suppliers’ balance sheets stifle innovation, or change due to the impact on profit of asset write downs.

It is a fact of business that the balance sheet plays a large part in driving companies’ behaviour, especially if they have many millions of $/£ intangible asset value.

SAP had Intangible Assets of €25.6 billion on revenues of €17.6 billion in 2014. A write down in an asset, results in an equal write down in profits. Institutional shareholders typically take fright (and flight) at write-downs. Therefore re-inventing the hegemony of existing solutions, requires a potentially significant investment and potentially a write down in previous investments – this is not something the neither executive nor board will countenance.

Is it therefore a surprise that existing solutions lack innovation in the user interface, which may well require re-programming in a newer language?

  1. Big businesses inherently do not trust small, innovative start ups; CIOs don’t get fired for selecting the old guard.

When was the last time the CIO of a large corporate suggested taking a risk? Corporate behaviour is typically risk averse. It is much safer to select a proven provider such as IBM or SAP, than take an opportunity to shake the tree.

This therefore precludes newer, start-up technologies that will deliver often much more cost effective, easier to use solutions. Coupa are making real inroads here, but few others are.

  1. B2C companies are not interested in selling to the B2B customer base.

The question is why don’t Amazon, or Tesco for that matter, move into the B2B space? They provide a huge range of products that businesses use. Yet they generally haven’t, other than grudgingly, thought to move into the B2B market – it is not part of their strategy.

However, we understand this is changing at Amazon! They believe their market is the consumer, not business, possibly because they are much simpler to deal with, pay immediately and do not add massive administrative, process and management burdens (i.e. contracts, risk questionnaires, etc.), which corporates do add as a matter of process.

But will this change? We postulate it is slowly shifting, with B2C principles slowly coming into the B2B World. In our follow up we will discuss this shift in some detail.

Market Dojo and Odesma have partnered to combine their intuitive eSourcing software and expertise in offering business advisory services to offer clients a winning procurement solution.

Cloud Computing – Don’t Get Stranded with Sharks

If you think that cloud computing is not for you, you may be left stranded…with sharks.

You can download the latest GEP white paper on the impact of cyber security, and the benefits of a cloud-based procurement technology solution here.

“If you think you’ve seen this movie before, you are right.” So said David Linthicum, author of ‘Cloud Computing and SOA Convergence in Your Enterprise‘.

He went on to say, “Cloud computing is based on the time-sharing model we leveraged years ago before we could afford our own computers. The idea is to share computing power among many companies and people, thereby reducing the cost of that computing power to those who leverage it. The value of time share and the core value of cloud computing are pretty much the same, only the resources these days are much better and more cost effective.”

In biological science there is a concept called convergent evolution, which essentially describes how different organisms have independently evolved the same solution to a particular problem.  The similarity in body plan between sharks and dolphins is a perfect example. Despite one arising from a fish and the other from a land mammal, the particular circumstances of life in the pelagic ocean have resulted in the gradual adaptation through survival of both groups into superficially similar morphologies.

New Era Solutions

The cloud computing model of this era is indeed offering a similar solution to a similar problem that the shared computer access model used to. Indeed I recall having to book computer time in my university days, and that on a machine with a fraction of the computing power of my wristwatch!

In that case it was simply a matter of limited availability of the machines themselves and sharing the cost between groups was the only model that made sense. Today the equation is a different one.  Raw computing power and data storage are dirt cheap…

As an aside, a quick sketch calculation confirms that data storage twenty five years ago cost around seventy thousand times the equivalent cost today. (To check my working: I installed a 100MB hard drive in a business system in 1990. It weighed 120Kg and cost about £1100 Sterling. Last week, I put a 1TB card in my camera for just under £140.)

…but it isn’t the cost of the machine resources any more that are the limiting factor. It’s the overhead. The cost of management and operation, the risk of failure and consequential loss, and the inertia lumped on the enterprise in times of radical and accelerating change.

Putting Software to Work

What is driving business systems into an effective shared computing model in the cloud is not the need for more resources at lower cost (although this is undoubtedly an unplanned upside). No, it is the need to decouple the business processes from the technology.

Yes, of course, the technology – and by that we mean software of course – is central to the business process. I mean, do we really need to say e-this and e-that anymore? But in the past our business processes were determined BY the software. Today cloud software can give us the flexibility to conduct business how we think best and the software can be put to work for us.

Perhaps that’s sounds a bit too rosy-tinted for some.  But the fact remains, the risk and cost of making the wrong decision in selecting a cloud software provider, is the merest fraction of what it was in the old, customised-behind-the-firewall days.

A recent conversation I had with a consultant suggested one client of theirs was looking to migrate their systems as-is to an SaaS platform over the next five to seven years. In that same time, a more decisive CIO could make the wrong decision about a cloud provider twice(!), and still be further advanced in ROI by the time that migration is over.

Overcoming Intertia

So, the imperative to move into the cloud is compelling but the skepticism around security can apply the brakes in many organisations.

Because cloud computing evolved from a different ancestor to the shared computer model – out of the chaotic, anarchic, everyman’s internet, run by nobody-knows-who, instead of out of the traditional, conservative club of private supercomputers run by accredited Systems Analysts –, and because of a slew of high-profile hacking cases, there remains a core of uncertainty in the procurement industry.

To that end we work closely with our customers to help them understand where the security risks today really lie, and the greatest of these is inertia.

As I think about the case of the company taking upwards of five years to take what they have today and put it online, I can’t get the image out of my head of a diver coming up from a leisurely reef excursion only to see the dive boat heading for the horizon.  Of course, if he can’t tell whether that fin belongs to a dolphin or a shark, you now know why.

It will take a company with very deep pockets and very great resilience in a rapidly changing world to be able to ride out the cost of being left that far behind.

There do remain reasonable questions around technical security that should be asked and answered in any selection process, and our two-part paper Securing Procurement in the Cloud of Tomorrow is designed to help that conversation.

Vivek Kundra, former federal CIO of the United States said, “Cloud computing is often far more secure than traditional computing, because [cloud providers] can attract and retain cyber-security personnel of a higher quality than many governmental agencies.”

The question is not whether, or even when. It’s how.

Enterprises should be moving their procurement processes to the Cloud, say GEP. For more on this, download the latest white paper research.

For more help on avoiding the sharks in procurement software, visit the Smart by GEP website.

How can Procurement Work Smarter, Not Harder?

Time never seems to be on our side. It’s time for procurement spend its time more wisely, and work smarter, by leveraging new technology.

Dragon Images/Shutterstock.com

Procurement, finance and operations have forever been working on ways to integrate simply and effectively. While it is reasonably simple to coordinate small teams in one office, hospitality is one industry faced with the tough task of managing spend and suppliers across multiple locations, multiple businesses within a business and a seasonal spend pattern.

Traditionally, these three departments have been engaged in a never ending paper chase between numerous locations and head office. Not to mention the arduous task of managing budgets across a multitude of locations, geographies and currencies. Until now, managing this extensive workload has meant the headcount in the back office goes through the roof and the time staff should be spent in front of the guest/client, is instead spent on pushing paper and placing orders.

Breaking with Tradition

So how do you fix this expensive problem, and work smarter?

Breaking decades’ old business patterns and cleverly using technology to simplify buyer – supplier interactions and location management. However, Z Hotels have cut administrative tasks by up to 90 per cent through simplifying and digitising many of their previously time devouring tasks.

Frontline hotel staff would spend up to five hours a week on purely administrative duties like placing orders, chasing paper invoices and pushing items through the approval process back to head office. Meanwhile, head office staff lacked the transparency and real time control on departmental spend and relied solely on location staff to be their eyes and ears.

Since bringing in a new, cloud-based procurement platform, they have cut admin duties for location staff time down by 90 per cent.

Bev King, CEO at Z Hotels, commented on the benefits of the new solution. “Customer service is at the forefront of everything we do, InstaSupply gives us the opportunity to have a much more automated solution that allows our staff to have time to focus on the service to the customers rather than try to fill the administrative gaps. The process has become very easy to use. We’re on the right track,” King said.

Supported Growth Ambitions

The platform now pulls together all orders, delivery reconciliation, stock, invoice processing, location management and budget tracking as well as a host of other functions still being refined within the portal. All this with full integration with the business’ accounting software.

When Z Hotels first brought in InstaSupply, at the end of 2014, they had big ambitions to grow. A year later, they have just opened their 10th site and are on course for another five by the end of this year.

Under the traditional model, a flurry of staff would have been brought in to handle the additional workload that growing nearly 300 per cent would have created. In fact, the head office team that deals with finance and procurement has stayed the same as it was in the beginning.

It is this ease of use that makes it a great solution for Z’s predominantly Millennial operational staff. Implementing a fully responsive, one click, cloud solution is in tune with the emergence of a dominant Millennial workforce who will no longer just get by with archaic systems and countless spreadsheets.

With a wealth of new technology available to procurement and finance teams, isn’t it time for your organisation to look at ways you could work smarter?

Watch a video on this case below:

Instasupply employs advanced cloud technology and a user-friendly web application to give users control of their time and their spend. Find out more about Instasupply’s purchase-to-pay ordering system, and supplier invoice management and consolidation functionality, at their website.