Tag Archives: robots

Facebook AI Research Team Shuts Down Negotiating Robots

Facebook has shut down two robots after they abruptly stopped using English and invented their own language while conducting a negotiation exercise.

There have been a flurry of reports over the past week about Facebook’s decision to shut down two chatbots – named Bob and Alice – after they developed a coded language that was incomprehensible to humans.

The initial experiment involved a simple conversation between one human and one chatbot where they negotiated the sharing out of some items – books, hats and balls. This conversation was conducted in English, along the lines of “give me one ball, and I’ll give you the hats”.

So far, so good. But when the human was removed from the conversation and two chatbots were directed at each other, the way they communicated immediately became difficult for humans to understand.

Bob: i can i i everything else . . . . . . . . . . . . .

Alice: balls have zero to me to me to me to me to me to me to me to me to me

Bob: you i everything else . . . . . . . . . . . .

Alice: balls have a ball to me to me to me to me to me to me to me

Bob: i i can i i i everything else . . . . . . . . . . . .

Alice: balls have a ball to me to me to me to me to me to

Bob: i . . . . . . . . . . . . . . . . . . .

Some media commentators have labelled the development “sinister”, with frequent references to Terminator, Skynet and – of course – Frankenstein appearing in related coverage. But Facebook researcher Dhruv Batra told Fastco that there was simply no guidance set for the robots to stick to the English language. “Agents will drift off understandable language and invent codewords for themselves.” Essentially, the bots found a more efficient way of communicating with each other.

Setting parameters

The topic of negotiation and AI came under discussion at a recent Negotiation Roundtable organised by CABL (Conti Advanced Business Learning). The attendees agreed that if a robot is going to run a negotiation, it requires very clear guidance around the parameters and objectives.

Another concern about AI being involved in commercial negotiation is that at present, they are unable to understand emotional intelligence. Thierry Blomet, Senior VP of Global Sourcing at Kemira, says that “Until we completely remove the emotional aspect, AI cannot run negotiations. Body language and emotional reactions are intangible, and are most unlikely to be modelled by programmers.” In the case of Facebook’s Alice and Bob, the human factor was removed.

Blomet points out that AI can play a valuable role in complex scenario modelling, which would be “much more complex than even the smartest procurement brain could manage. Whatever might happen in the negotiation would be included in that model, with the answers already pre-empted.”

Laurence Pérot, Head of Global Supply Chain Procurement at Logitech, agrees. “Big Data and AI will lead to much more efficient scenario modelling, particularly with supply chain, logistics and transportation bids.”

Orestes Peristeris, Supply Chain Expert at Yale, comments that ultimately, it’s about quantification and sophistication of statistics. “Do you have the data in the same place and in one system? What can be quantified and what cannot be quantified objectively? There are some things that can be used, some things we know will happen with some certainty, and some things that can’t be quantified. Finally, we’ll always need humans to take the outcomes of Big Data and apply it to the business context.”

As for the future of procurement negotiation, perhaps one day we’ll see buyers and suppliers lining up their chatbots against each other and letting them negotiate in rapid, complex code.

May the best bot win.

In other procurement news this week:

Hackett research reveals dramatic savings from digital transformation

  • New research from The Hackett Group has shown that the potential cost take-out opportunity through digital transformation is up to 24%, through the implementation of robotic process automation, advanced analytics, cloud-based applications and other approaches.
  • The research has also revealed that world-class procurement organisation now operate at 22% lower labour costs, have 29% fewer staff, and generate more than twice the ROI of typical organisations, with over $10 in savings for every $1 of procurement operating costs.
  • The Hackett Group’s Christopher Sawchuck commented that procurement technology has reached an inflection point: “World-class organisations can continue to reduce costs by embracing digital technology, and typical procurement organisations can leverage the same technology to catch up faster at less cost.”

Download the research here: http://www.thehackettgroup.com/research/2017/wcpapr17/SalesForce-World-Class-Advantage-17Q2-PR.html

Collaborative Robots to Boost Warehouse Productivity

  • In a shift away from the apparent race to replace humans with robotic workers, firms are designing robots to work alongside people in warehouses and boost productivity.
  • “Collaborative” robots can have a variety of uses, including leading human workers to the exact location of a product, or carrying goods from one part of the warehouse to another. DHL, Bonobos and Zara are known to be experimenting with the technology.
  • The robots – costing tens of thousands of dollars – are relatively cheap when compared with the vast amount of conveyor belts and automation systems included in a typical warehouse.

Read more: The Wall Street Journal

Interested in attending a CABL Negotiation workshop? Visit http://www.cabl.ch/ to find out more. The founder, Giuseppe Conti, has over 20 years of Procurement experience with leading multinationals and over 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

How Algorithms Will Add Super-Intelligence To The Way Your Company Spends Money

As algorithms, virtual assistants, and bots infiltrate conversational interfaces across business applications, in the crosshairs is company spend tracking and control. This is the panacea we’ve all been waiting for to an age-old problem.   

Messaging services like Slack are ground zero for a new generation of integrated bots in the workplace. Most have stopped trying to trick users into thinking they’re chatting with humans while new features like message menus (dropdowns) integrated into the AI-generated text help  users make nuanced decisions.

Driving the conversational UI behind the scenes is an-ever evolving mix of machine learning algorithms for pattern recognition, natural language processing, and other associated technologies. Together, they deliver a contextual experience that helps business users make smarter and faster decisions.

One business workflow rife with inefficiencies and errors is corporate buying and expense tracking. Pointing chatbots, or the next iteration of them that we’ll call AI assistants, in that direction will benefit everyone in the requisition and approval flow, from end users to the head of finance or the treasury boss.

The appeal of AI could be even greater for smaller businesses since most lack formal spend management policies, but still need to see who charged what and when on the company credit card. AI assistants enabled by emerging algorithms can arm every purchase decision with intelligence, in effect, augmenting human judgement every step of the way.

AI assistants can add intelligence to everyday tasks

In the realm known as transactional procurement and travel and expense (T&E), solutions with AI assistants could help with general questions, such as clarifying budget status or a spend limit. A user would be able to simply ask the robot a question within the same messaging interface where they chat with colleagues and then get an instant response.

For payments, an AI assistant could learn how you buy and then make recommendations based on context, supplier or product data, budget levels, working capital, and other factors one might overlook or simply not be privy to when initiating an everyday purchase for work.

In another scenario, a user could request an approval for a purchase, but before doing so, summon an AI assistant to verify if a similar request was made by a coworker to avoid a duplicate purchase. That way the user wouldn’t have to waste time and go digging for that info herself.

Finally, AI assistants can facilitate the buying process by generating a payment method such as a virtual credit card after the transaction gets approval from a manager on behalf of the requestor. Upon approval, a user would receive an encrypted virtual card with a spend limit to use as payment against a corporate account, massively simplifying what is typically an arduous back-and-forth process.

The AI opportunity goes well beyond transactions

In time, AI will evolve to allow organizations to make strategic buying decisions and respond to changing business conditions and market variability instantly. To get there, it will first remove the bottlenecks of repetitious decisions that occupy our time, like those mentioned earlier in this article. Then, they could be programmed to help make ever more strategic decisions.

In the sphere of sourcing and procurement, that could mean super-intelligent agents sourcing the highest quality rubber from a stable region, determining which short-listed supplier is most likely to honor their contract, forecasting supply chain disruptions and make recommendations weeks in advance, and so on.

Think that level of knowledge work is impossible for algorithms? Think again. Researchers at Google Brain have already developed software that designs machine-learning software with better results compared to machine-learning software designed by the boffins themselves!

We are well on our way to developing new types of non-conscious intelligence that will be able to handle increasingly complex tasks. In his best-selling book Homo Deus, author Yuval Noah Harari, drives the point home: “The idea that humans will always have a unique ability beyond the reach of non-conscious algorithms is just wishful thinking.”

With that thought, we can return to our original premise and have little doubt that the rise of AI will mean all of a business’s spending will get smarter. AI expert Stuart Russell puts AI next to the discovery of fire in terms of impact on civilization. If AI will change the world, then it certainly will change business commerce.

Christopher Jablonski is Director of Content & Communications at Tradeshift, a cloud-based business commerce platform connecting buyers and suppliers.

The Rise of the Procurement Robots

Yes, robots may be on the cusp of usurping the roles of many procurement professionals, but are the tasks being automated those that we really want? 

In 1991’s “Terminator 2: Judgement Day,” the Terminator character, played by a certain Austrian bodybuilder/actor/governor/reality star, revealed how Skynet computers became self-aware and began waging war against the humans.

Is that the future of procurement? Will The Machines, not content with the procurement duties they’ve already taken over, rise up to enslave us? Will they take away our coffee?

If that seems far-fetched and silly, that’s because it is. The future is not set, but procurement professionals should feel confident about their place in it. The importance of human beings in procurement roles will only increase, not diminish, in the years to come.

For evidence supporting that prediction, we need only look at the trajectory of the procurement function over history. Like most important developments in civilisation, it all started with the Egyptians.

The Pharaoh’s Supply Chain

One of history’s greatest capital improvements was the construction of the Great Pyramids. From a procurement standpoint, there was a lot to coordinate. Materials like limestone and alabaster had to be brought in. Hieroglyphics had to be planned. Thousands of slaves had to be managed.

While the Egyptians didn’t follow today’s strategic procurement processes, they did in fact task scribes with recording material and labour on papyrus. And the procurement business was born.

Over the millennia that followed, the role of procurement evolved from recording supplier information to influencing business decisions. The annals of procurement history are cloudy on where and when strategic procurement began, but it seems likely it happened during the 15th century in France.

That’s when French military engineer Marquis de Vauban began qualifying suppliers of buildings and fortifications in his efforts to strengthen France’s defences. About 200 years later, during the Industrial Revolution, businesses recognised procurement as central to their operations.

The first 5,000 years of procurement history yielded only a few milestones. It’s only been very recently that the real change has taken place.

In More Recent History

In the last few decades alone, products and services have become dramatically more complex. As consumers demand more innovative and personalised products, they have become more intricate and varied. At the same time, the demand for business-oriented products and services has followed suit.

This has led to a broader range of materials, components, services and suppliers. Companies have more to consider when sourcing the right products and materials to support their missions. There are also more external factors to consider. Sustainability and corporate social responsibility are becoming more important in how companies are perceived.

On top of that, organisations have more constrained resources than ever before. With increased competition from emerging markets, and volatile changes in the marketplace, companies need to be smarter and more strategic with their sourcing.

All of these trends are being driven and facilitated by the use of computers, the internet, the cloud, and other technologies. Information technology and globalisation have spurred the biggest change to procurement in decades.

People Can Do Stuff

Without a doubt, automation will continue to take over most of the fundamental functions of procurement, displacing humans. We know this because it’s happening in industries like journalism, where computer programs are writing stories.

This is not a cause for concern, but instead a cause for celebration. We have to ask, are the procurement tasks automation is taking over the tasks we really want? In the automated journalism example, computers are writing mundane stories that reporters would sooner “poke their eyes out with sharp objects” than write themselves. They much prefer to write in-depth stories that make use of their intuition and analytical skills.

We have to ask, are the procurement tasks automation is taking over the tasks we really want?

In the same way, automation enables procurement to spend more time developing strategy, building relationships, and evangelising the function. You know, stuff that people can do.

Specifically, there are five areas where procurement will have a significant impact on business in the very near future:

Five Ways Procurement Will Impact Business

  1. Predictive Analytics/Cognitive Procurement – When companies can gain a detailed understanding of the dynamics that impact material pricing, they can see changes earlier, manage around negative events, and gain a competitive advantage.
  2. Agile Procurement – Negative market events can also present an opportunity for flexible procurement teams with the ability to respond and capitalise on them.
  3. Advanced Sourcing – Today, many companies are optimising their supply chains, but only one section at a time. Through advanced sourcing, companies will be able to optimise their entire supply chains simultaneously.
  4. Supply Base-Driven Innovation – Where procurement in the past has been responsible for cost reduction, in the future it will impact the top lines of companies, as well. Managed by procurement, the supply base can provide ways to change the selling channels or even offer innovation to create new products or categories.
  5. Supplier Relationship Management – For companies with many suppliers, managing them – communicating with them, managing risk, segmenting, evaluating performance – is a daunting, but important task.

Let’s see a robot try to advise the CEO on how to adapt to market changes or select suppliers that can help the company innovate!

Transforming Procurement

And that’s just the beginning. New ideas, solutions and technologies have the potential to transform the procurement function in untold ways. What that will be one can only guess, but the result will certainly be greater convenience, efficiency and transparency into the supply chain.

Procurement will play an increasingly vital role in modern business operations, now and in the future. In the coming years, procurement will have a seat at the table when it comes to setting companies’ strategic direction, help them adapt to market changes, and innovate to take advantage of opportunities.

Procurement has come a long way in 5,000 years. While the future is uncertain, it seems likely that the importance of the procurement function – and the people who perform it – will only increase.

Skynet will have to look elsewhere in its quest to enslave the human race. Perhaps the marketing department…

Christopher Thiede is a staff writer at Jaggaer

Do CEOs Dream Of Robotic Sheep?

…Or are they kept awake at night worrying about how to adapt their business to a robotic-centred future? KPMG Australia Chairman Peter Nash reveals two concerns playing havoc with the sleep patterns of business leaders.

How can I adapt my business to a robotic future?

The thing about technological disruption – and machine intelligence in particular – is that people tend to regard it as a challenge to deal with at some point in the future. The key to understanding the scope of the challenge is to break it down into two categories – disruption that we’re already dealing with, and disruption that is yet to emerge.

Robotic process automation (RPA), for example, has been around for decades, with disembodied robot arms a common sight on production lines. Typically, they automate a series of existing processes that were once carried out by humans. We’re just starting to realise the full potential of RPA, with the emergence of bots that sit inside software to automate administrative labour becoming more common.

From his viewpoint into many of KPMG’s client organisations, Peter Nash has seen what an RPA bot is capable of. “If you go into any call centre, you’ll observe staff doing a series of processes as they engage with customers – typically around data capture and data entry. Through observation, you can create “process flows”, and then build software that can be inserted into the call centre and automate the data capture. That’s a classic example of robotic process automation, and it’s happening at pace.”

Interestingly, RPA is resulting in the reshoring of capability from overseas. Nash comments: “You can track the life cycle of offshoring and reshoring. 10 years ago you may have had 100 people doing a job in Australia for the cost of $5 million. Those 100 jobs were offshored to India, resulting in costs being reduced to $1 million. Today, with robotic help, you can have only 10 people doing the same work that 100 used to do – at a cost of $0.5 million. Yes, 90 jobs have disappeared, but there’s the exciting potential for completely new jobs to be created with each technological leap.”

“Artificial (or Cognitive) Intelligence, for example, is only just beginning to emerge. People are very excited about AI’s enormous potential, but at present it’s essentially a solution looking for a problem.”

How do I effectively harness innovation?

Nash comments that there are several models that have emerged in the ways corporations seek to harness innovation. “Many CPOs look for innovation to emerge from down the line, and encourage people, whether they’re in-house employees or suppliers, to bring ideas forward. Other organisations set up innovation capability ‘hubs’ or ‘accelerators’. Another approach is to acquire, or partner with, innovation capability outside of your organisation. Some business are doing a mix of all three.”

“What’s encouraging is that most businesses understand that today, it’s innovate or perish. A culture of innovation, partnered with a culture of flexibility where people have the ability to react and respond to disruptive technology, will ensure businesses are able to take advantage of anything that comes their way.”

KPMG Australia Chairman Peter Nash will deliver a keynote speech at PIVOT: The Faculty’s 10th Annual Asia Pacific CPO Forum.

 

Fancy Sharing The Procurement Workload With AI?

Technology will help procurement pros to do their jobs faster and more efficiently, lessening their workload. What are the key AI trends we can expect to see in the coming months?  

Nearly every day we encounter stories and predictions about how artificial intelligence (AI) will fundamentally change a variety of industries. The challenge is explaining what this type of technology could do to improve certain functions and jobs. Let’s take a look at the trends we can expect over the coming months.

Artificial intelligence will expand in analytics, intelligence gathering and visualisation

We’ve already seen speculation about the industries who will benefit the most from AI, and we’ll continue to see improvements as more and more companies adopt the technology. We will further see the expansion of the way humans in the workforce interact with AI-based solutions.

When it comes to the analysis of data, especially unstructured data, AI can be taught the nature of words and sentences and string together concepts and gists within the text. This goes far beyond the basic keyword search functions most people are familiar with. AI can then present the information to business users, and not just highly trained data scientists, in a format suitable for them. In understanding the contents of extremely large numbers of documents, AI can take a huge workload off human reviewers and help them do their jobs faster and more efficiently.

Through the use of AI, companies will have an advantage on a competitive global stage, without sacrificing the well-being of their employees, and these applications alone will be the first area of widespread use this year.

M&A activity in 2017 will rebound with a record year

Last year was a disappointing year for mergers and acquisitions. Between the broken deals with Allergan and Pfizer, Halliburton and Baker Hughes, and many more, investors and companies alike were starting to panic about the future of the economy. This year things will quickly change and we’ll be on the rebound with a record M&A year.

According to a new Deloitte report, 86 per cent of private equity and 71 per cent of corporate dealmakers are expecting to close more deals in the next twelve months. While many people feared the uncertainty of major events like Brexit, it will present a whole new opportunity for M&A deals in 2017.

Contract intelligence solutions can help to alleviate some of the challenges M&A brings. By gaining a much stronger insight into the contract portfolios of companies they are targeting for acquisition in the due diligence phase, they dramatically reduce the risk and liabilities they may be acquiring. This insight is fast and efficient, and provides significant transparency in to contract obligations while keeping the deals on track.

Contract Management – CLM will need to change

Contract lifecycle management (CLM) vendors manage contract processing through technologies such as document repositories, workflow, and authoring. It has been recognised that the utilisation and ROI provided by these CLM technologies is not where it needs to be, and they are lacking in the management of contract data. These systems provide user defined fields, and users must manually input this data to manage obligations and run analytics on key fields such as term, renewals, counterparty information, pricing and incentives. The data manage with CLM is generally inconsistent, error prone, and inefficient, and organisations with CLM systems will clearly struggle with understanding the data in their existing contacts as they go into the CLM, but also new contracts.

This year, organisations will realise CLM only solves part of the problem they are working to solve, and complement CLM with contract discovery and analytics tools — based in AI technologies. The combined solutions will create the needed efficiencies in the contract lifecycle, but also allow them to dynamically extract the data they need from contracts, when they need it, allowing for deeper analytics and increased insight into critical business relationships. The old way of data management with contracts will be considered obsolete this year, and richer analytics will become the norm.

Contracts – the “new source of Business Intelligence”

Right now, businesses spend a lot of money and time extracting insight from structured data. The current “big data” solutions process sales data, manufacturing data, financial data, social data, etc., but not the data buried in unstructured documents. Solutions exist now to analyse data from large quantities of documents and provide very valuable insight that can be used for effective decision making.

This is especially important when it comes to contracts. Instead of legal teams reviewing contracts to ensure an organisation is complying with the law or with new or changing regulations, contracts will be seen as a valuable new source of business intelligence.

Dashboards are now being created that bring together structured and unstructured data to provide new views into the business that were not possible before. Contracts will be appreciated as a new, and untapped source of business intelligence that a new generation of technology can now mine in a very intuitive and cost effective way.

This article was guest-written by Seal Software, a leading provider of contract discovery. Seal Software uses artificial intelligence and natural language processing to help companies efficiently uncover what’s in their contracts.

Four Ways To Ensure You Still Have A Job In 2020

Futurist Anders Sorman-Nilsson warns that unless we act now, there’s a good chance we’ll find ourselves unemployed as early as 2020. 

Sorman-Nilsson spoke with Philip Ideson as part of Procurious’ Even Bigger Ideas, a 5-part podcast series sponsored by State of Flux. You can access the series exclusively on Procurious.

Futurist Anders Sorman-Nilsson wants procurement professionals to ask themselves two crucial questions.

  1. Firstly, think about your future career, your employability, or your entrepreneurial plans for the future. Given the kind of work you’re doing today, can a computer, an algorithm or artificial intelligence do it faster, cheaper, and more efficiently in the future?
  2. Imagine jumping into a time machine and travelling to 2020. You step out of the machine, expecting to find yourself further up the career ladder, successful and wealthy. Instead, you discover yourself lying on the couch, watching daytime television, and no longer employable. What happened?

Roll up your sleeves and conduct a pre-mortem

Business are familiar with conducting post=mortems, particularly after a project or initiative has failed. Sorman-Nilsson advocates for “pre-mortems” instead: “Imagine that in 2020, your personal employment brand is now defunct. You’re no longer employable. What were the trends that you missed? What were the signals you chose to ignore? And what were the education investment decisions that you chose to delay that led to your personal brand’s demise?”

“Finally, ask yourself what change will you make today to prevent that outcome from happening?”

Job-stealing robots are already here

It’s notable that when Sorman-Nilsson talks about time-travel to the future, he doesn’t pick a far-off date decades down the track. He chose 2020, less than three years away. That’s because the AI disruption is happening already. Self-driving cars are a reality, machines have automated a lot of blue-collar work and AI is already impacting white-collar work. “In Japan recently, 34 humans in complex insurance claims processing were made redundant in favour of an insurance firms’ investment in IBM Watson to do those claims instead. We’re really just scratching the surface of what’s possible with artificial intelligence and computing power.”

Four actions to take today to save your career in the future

  1. Examine your skill set and focus on where you, as a human being, might still have some kind of competitive advantage over a robot. Where can your emotional intelligence (EI) compete with, or complement, artificial intelligence (AI)? In a world where everything that can be digitised eventually will become digitised, what are the fundamental human skills that you add to a profession that’s largely about numbers?
  2. Learn to speak digital: “You don’t need to speak Java or know the intimate details of cloud computing and data science, but you need to be comfortable in speaking digital. Digital really is the global language of business for the future.”
  3. Embrace the gig economy: As corporates start opting for robots instead of humans, it’s time to take matters into your own hands and offer your personal brand through increasing entrepreneurship.
  4. Invest in your education: “While we’re already experiencing fundamental shifts, we do have some time to prepare ourselves, but this means we need to really invest in our own learning, and our own agility in the way we position our skills. Aim to invest in at least one new skill every year.”

Anders Sorman-Nilsson is the founder of Thinque – a strategy think tank that helps executives and leaders convert these disruptive questions into proactive, future strategies. His latest book is titled Digilogue: How to win the digital minds and analogue hearts of tomorrow’s customer. 

Are you a CPO in the Asia-Pacific region? Don’t miss out on seeing Sorman-Nilsson’s keynote at PIVOT: The 10th Annual Asia-Pacific CPO Forum in May 2017.