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The Key Procurement And Technology Trends for 2019

The times, they are a-changing, and so are the markets and environments that procurement operates in. What then are the key trends in procurement and technology you need to watch for in 2019?

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As I am reliably informed by my Christmas-mad colleague, there are only 125 sleeps (as I write) left until Christmas. That means there’s a little over 18 weeks until the year ends, so it’s time to start looking forward to what’s coming in the next 12 months.

2019 is set to be a seismic year around the world. Major changes, such as further geo-political upheaval, the looming spectre of global trade wars and tariffs aplenty, have the potential to disrupt supply chains and set metaphorical trip wires for procurement professionals everywhere. And, as we’ve already heard, it’s rarely been more important to get a solid grips on the key factors in the market and external environment.

So gather round as we gaze into the opaque mists of the future and make some educated insights into the key procurement and technology trends waiting around the corner.

  1. Supplier Management

Let’s start with an oldie, but a goodie. Wait, I hear you cry, supplier management isn’t a new trend! We’ve been talking about this for years. Well, if we’ve talking about it for years, why aren’t we any better at it? And why is it that it’s one of the key areas a large number of procurement teams fall down on?

Like it or not, your suppliers hold the key to all your wildest procurement dreams. Innovation, top and bottom line cost reduction, avoidance and savings, stress-free supply of services and goods and free cake for all! (Ok, maybe not that last one!)

In their Vision 2020 publications, pwc state that the top 25 per cent of procurement functions will have gone beyond incremental improvements and be implementing fundamental change to process and policy alike. This includes how they interact with suppliers and shifting focus from cost and value to Return on Investment (ROI).

These outcomes all hang on better supplier relationship management in order to tease out further innovation from suppliers (who are seen as partners, rather than sponges to wring cash out of) and closer collaboration to source solutions to problems we don’t even know we have yet.

At the heart of this is great communication. Select the right suppliers and talk to them more. You never know, you might just learn something!

  1. Blockchain and Digital Adoption

Unless you’ve been living in a cave on a remote hillside (or perhaps a Faraday cage in your basement), you should have heard by now about blockchain.

From blog articles to webinars, it’s one of the hottest topics in procurement right now, and is likely to still be throughout 2019. Blockchain is and will continue to be a key tool in shaping the transparency of a supply chain. Information is shared and transmitted easily and safely, while the technology allows an “immutable signed and time stamped record of identity, ownership of assets, transactions or contractual commitments”.

This transparency will have the added benefits, and some drawbacks, of making procurement and CPOs more visible in the public environment, say EY. Procurement will wield greater power and have greater opportunity to interact with external stakeholders. But, at the same time, organisational processes and procurement will play out in a public setting like never before.

In line with blockchain’s increasing influence, there is a predicted rise in digital adoption and use of the Cloud. An estimated $1 trillion of IT spend will be moved to the Cloud by 2020, according to Gartner, as organisations look to make their IT services more agile.

  1. Social Value

There is a prevailing opinion amongst the procurement professionals I speak to that 2019 will be the year for social value and sustainability to really take hold. Organisations have begun to realise that cost and quality are only a part of the overall package and not only do they need to be seen to be doing more in the community, but they need to follow through on it.

That goes for the wider supply chain too. Using work practices and value-adding benefits for communities into tenders will become the norm and procurement will no longer be able to award contracts on cost without taking the wider impact into consideration.

  1. Next-Gen Workforce and Automation

Disregard what you’ve heard very recently regarding automation, machine learning and AI as scaremongering. Yes AI will take on tasks and people may have to move to new roles, but it’s not a future that we should be burying our head in the sand about. It’s a natural human reaction to fear change, but procurement needs to muscle up and be brave in order to evolve and survive.

Infosys estimates that AI and procurement automation will eliminate human intervention in 15 per cent of digital spending by 2019. If that’s the case, then procurement needs to embrace the change and develop, train and retain its Next-Generation workforce to meet the demands of new roles where human interaction and input is still key.

  1. Risk

From Brexit to trade wars, risk is going to be possibly the biggest trends for businesses as a whole in 2019. The organisations who will thrive in this unstable environment will be the ones who are best prepared to deal with the unexpected.

Deloitte believe that procurement will become the forecasters of risk in an organisation, raising the profile of the function as it factors total cost of risk and risk mitigation in supply chains into contracts and tenders.

Risk runs throughout the other trends that have been suggested above. Brexit, protectionism and trade wars make supplier and supply chain management all the more important. The increasing need for cyber security as technology advances is something that cannot be ignored.

Procurement is ideally placed to deal with all of these risks, but it needs to put its hand up and be at the front of the queue, or face being left behind and marginalised at a time when the function has a crucial role to play.

Blockchain Will Not Save The World (At Least Not This Year…)

Blockchain hype has spread like wildfire… But it’s time for a reality check…

Don’t—

Don’t—

Don’t—

Don’t—

Don’t believe the hype

Don’t Believe the Hype” is a song by Public Enemy that dates back to 1988 and (if loosely interpreted) carries an important message that can be applied to blockchain technology. Blockchain is almost everywhere, and—let’s face it—it’s getting a lot of hype.

It is very surprising that  such a new and relatively obscure technology like blockchain has received so much  exposure so fast, even in mainstream media. Blockchain hype has spread like wildfire, and this is largely because blockchain is the underlying technology behind Bitcoin, a digital currency (a.k.a. as cryptocurrency) that received a lot of coverage in the media.  In the wake of the cryptocurrency craze, blockchain has continued to attract more and more attention.

Time for a reality check

The response to blockchain exemplifies many of the issues that are commonly  associated with introducing new technologies. Firstly, the market’s inflated expectations do not match the reality of blockchain’s current applications and actual capabilities (see for example: “187 Things the Blockchain Is Supposed to Fix”). Secondly, many consider blockchain as an end in itself when it is actually just a tool that serves an objective or purpose. These are probably the two factors that are doing the most damage to the credibility and future of this technology, despite the very promising applications of blockchain.

At its core, blockchain is a form of digital trust, which has a number of potential uses and applications in business because trust is one key component in such a context. However, some of the characteristics of this technology that make it so valuable are also limiting the scope and possibilities of blockchain’s real-world applications beyond trials and prototypes. As with many other things, it is a matter of trade-offs. There is not a single, universal, and magical solution to every problem. So, before blindly jumping on the blockchain bandwagon, it is crucial for Procurement and Supply Chain professionals to know what blockchain is, understand its value proposition, and to be aware of what challenges and issues may be associated with using it.

Limitations and challenges of first-generation blockchains

You can trust data contained in a blockchain because of the way records (blocks) are added and managed. Unlike other methods of data management, blockchain is a decentralized (peer-to-peer) network composed of nodes. There isn’t a single “party” managing and owning the data, but rather a network of independent nodes that operate the network. This removes the risk and temptation of manipulating data. Even if someone was tempted to tamper with the data ,  they would need to find a way to  change it at all “n” nodes of the network simultaneously, which is more or less impossible, or, at the very least, extremely difficult.

A second aspect of blockchain that makes it such a secure data management option is its unique form of record keeping. “Miners” verify every new record and they must reach a consensus to allow a new record to be added to the chain. On top of this, each new record (“block”) contains a link to the previous block, meaning that it is impossible to change or remove a record without editing the entire chain. This is why data in the blockchain is immutable, which is one of the key value proposition of blockchain (although immutability and the new GDPR do not really work well together…).

Looking at the process above, it is easy to imagine that adding a new record in a system like blockchain takes more time than it would in centralized databases. This is because many actors (nodes) are involved and they have to perform tasks (mining) to verify the transactions (and that also serve as prevention against hacking and attacks). So, in its current form, blockchain is a somewhat slow technology when compared to what already exists. For example, Visa processes and verifies transactions more than 7,000 times faster than what happens on the bitcoin network.

Another issue is that, all the nodes of the network store all the data contained in the blockchain. This drastically increases the size of the blockchain, making it slower as it grows and more and more difficult to manage. In short, a blockchain network would explode and become  unmanageable very quickly in a number of real-life scenarios, such as, for example, if blockchain was used to track the origin of materials and parts across all tiers in a company’s supply chain.

There are also other potential threats related to security. Blockchain technology  relies heavily on cryptography and peer-to-peer networks that make it very robust and resilient. However, history has shown that almost nothing is unhackable. The blockchain may be incredibly difficult to hack but someone with the right motivation, tools, and probably a lot of time could, one day, hack it. And, as the blockchain’s popularity grows, so does the potential pay-off for successful hackers! Also, even if we were to assume that the blockchain is  totally unhackable, the systems around it are not. Systems and programs connected to the blockchain may be vulnerable to attacks and/or to bugs.

All in all, the blockchain technology is not a magic solution for every problem. Like any other technology, some trade-offs make it a more or less viable solution. For the blockchain, the trade-off is between three properties: scalability, decentralisation, and security. Today, you cannot get all three!

New and future  generations of blockchain could make it a viable option

A lack of scalability is probably the most serious limitation of blockchain, and it will probably determine the life or death of the technology. The first generations of the blockchain network, like Bitcoin, do not scale at all and are even incredibly dangerous if you look at sustainability issues and energy consumption. Newer generations are addressing this issue by introducing new designs and concepts.

For example, they are moving away from the consensus/mining mechanism that older generations use, which is based on the “Proof of work” concept (miners must perform more and more complex calculations and need more and more computing power and energy to complete them). “Proof of Stake” (PoS) is a newer and much more energy conscious algorithm that will address the “cost” of blockchain and make it a viable option.

Another example of how blockchain technology is being updated can be seen in the radical changes being made to the blockchain’s design. In new conceptualizations of blockchain, the design is moving away from linear models, where one block is only linked to the block before and after it (like links in a chain), and are instead moving towards networks of blocks, where one  block is connected to n other blocks. The benefit of this model is that operations on records can occur simultaneously on several branches of the network.

Too bad to be true?

It is true that there are essential trade-offs (scalability, decentralization, and security) to be aware of and to consider before adopting blockchain technology and moving towards a form of digital trust (which means trusting the software more than other parties). However, in many situations, the benefits offset the challenges and make blockchain the best alternative. A recent real-world example of this is the use of blockchain in a refugee camp as a means to address identity challenges and issues. As Houman Haddad, the UN executive behind the introduction of blockchain technology in a refugee camp in Jordan explains:

“Of course we could do all of what we’re doing today without using blockchain,” he says. But, he adds, “my personal view is that the eventual end goal is digital ID, and beneficiaries must own and control their data.” From “Inside the Jordan refugee camp that runs on blockchain” published in the MIT technology Review in April 2018

Another way to look at the trade-offs/dilemma is to consider what can be achieved with blockchain that was previously impossible. An interesting example in the Procurement / Supply Chain sphere is Productivist a service provider that wants to address the “manufacturing surplus” by connecting, , manufacturing companies and their customers via the blockchain.

Some say I’m negative,

but they’re not positive

But what I got to give,

(The media says this?)

So,  don’t believe the hype…

Instead, proceed cautiously and be aware of what blockchain can and can’t do. Blockchain is undoubtedly a powerful and exciting technology, but it is not yet fully mature and has several limitations, which explains why it still is far from being widely adopted, despite all the hype surrounding it. However, the newest (and future) generations of blockchain (that will probably part ways with “blocks” and “chains”) will make blockchain a more viable application than what is readily available now. These new generations, just like the older ones, will not save the world, but they represent a real and unique opportunity to create a platform/protocol which (new) businesses can build on, and which can help them grow.

It Only Works If You Believe It Works…

As organisations embark on digital transformations, they must also be prepared to trust in ‘new-ness’, adapt to the speed of change and take note of the 3D’s… 

Last week the Procurious team hopped on a plane to Munich to attend Jaggaer’s REVInternational 2018 for two days of inspiring discussion on eProcurement innovations, digitisation, and the future of procurement.

One of the stand out sessions came from futurist Stefan Hyttfors who lectures on how innovation, disruptive technologies and behavioural change affects the worlds of business and social issues.

His mission? To inspire as many people as possible to embrace digital change.

Trust in “new-ness”

“I have a lot of friends working in tech and they often approach me to ask ‘What advice should I give to my peers?’

“And my frequent reply is ‘How come you believe you have any advice to give to your peers?’

“Because if we believe in the concept of disruptive tech then we must also be humble about the fact that experience and knowledge are a problem.”

The reality of the extreme pace of change hit Hyttfors hard last summer when his 20 year old son returned home from university for summer break.

As the family sat down for dinner one evening, Stefan took the opportunity to  interrogate his son about his summer plans; would he be spending the break getting some work experience?

‘No I’m not going to work” he replied.  “I value my time and I don’t want to sell it to anyone”

Instead of work he had conjured a number grand plans including a road trip around Norway and various other escapades.

Stefan’s line of questioning instantly transferred from ‘What are you going to do?’ to ‘How on earth are you going to afford it?!’

His answer, ‘Don’t worry dad, I have some bitcoin’

“This is the millennial perspective today,” Hyttfors asserts. “And money is a particularly interesting discussion, particularly across generations.  Where I was sightly skeptical about how far cryptocurrency should be trusted, my son was offended at the mere suggestion and far more wary of our banking systems.”

“Strange things are happening in the world; things that we don’t understand, thing that we ridicule and laugh at. We are guilty of assuming that our kids need to know what we know”

But in actual fact, it’s a trust in ‘new-ness’ that is going to become one of the most crucial factors for organisations in tomorrow’s world. Money is a great technology and a great innovation; it makes transactions smooth and solves a whole world of problems.

But, as with all technology,  it only works if you believe it works…

Pay attention to the speed of change

Disruptive technology is nothing new but the speed of change is ever-increasing. In the past, organisations had the luxury of time permitting them to be skeptical about and distrusting of new innovations, which took 50 years or more to catch on.

Nowadays we hear a buzzword for the first time and within a matter months it’s everywhere; “a unicorn company appears and usurps all the other companies in that space.”

“We talk about organisations like Kodak and Blockbuster as if they were stupid. But the problem isn’t that they were stupid. They were simply the best at doing something no one needs anymore.

“When you are very good at what you do you will not be the one to disrupt your own industry.”

There are examples of this happening in every industry. And it’s never because the old companies were poor. Someone simply found a new way to solve old problems

“The speed of change puts so much pressure on leaders.  But if you focus on making current processes more efficient you cannnot disrupt at the same time.”

The 3D’s of Digitalisation

As your organisation prepares for, and embarks upon,  digital transformation, take note of Stefan’s predictions for the future of digitalisation. It all comes down to the 3D’s…

  1. Dematerialisation

As technology advances it figures that we will simply need less ‘stuff’.

As Stefan points out, “If you can solve a problem digitally you don’t need material things.

“Don’t tell your kid that an iphone is expensive – think of all the junk you used to have to buy in the past to do the same job [a single iPhone can do].  It solves so many problems. Nowadays everyone in the world can take pictures for free.”

Dematerialisation means that more people can afford to do what used to be expensive and exclusive.

2. Deflation

Deflation, as Stefan sees it, means having “millions of micro transactions rather than thousands of  major transactions.”

Take cars as an example. They are absolutely not efficient; often parked for 23 hours of the day and contributing to congestion and pollution in our cities.

Along came Uber, which offers ‘mobility as a service’ and suddenly transportation is transformed globally.  Selling £50,000 cars is not an ideal model – mobility as a service is the future.

“We are a big world on a small planet and because of this sustainability will be the main leading strategy of the future.

“We need to make much more with much less.”

3. Decentralisation

We all like to believe that we are part of the last uninformed generation; that we have all of the answers and all of the information. But, in Stefan’s opinion, that’s simply not the case.

We will continue to face big problems and these problems can only be solved with global collaboration and global crowd-sourcing.

“We see a big decline in trust because people don’t believe in old institutions anymore” whether it’s governments,  law enforcement systems or our banks.

“Why should my son trust in a banking app when he can trust in a bitcoin app?”

“He believes in decentralisation, a world in which where there is no boss.” Because, at the end of the day,  it’s your boss that makes a system inefficient and corrupt.


Learn more about Jaggaer and  REVInternational 2018 

7 Procurement Trends To Watch Out For In 2018

Which hot topics and trends will everyone in procurement be talking about in 2018…?

What’s the buzz in 2018? We’ve done a spot of investigating to identify all the hot topics the procurement world is excited (and concerned!) about in the coming year…

1. Technology Hype Won’t Let Up

Steve Banker, writing for Forbes, concurs stating that “emerging technologies such as blockchain, 3D printing, autonomous mobile robots, IoT, machine learning, and related technologies continue to get a tremendous of amount of publicity.

According to Supply Chain Digital, “The pace of innovation is picking up steam at an exponential rate.

“Robots, self-driving vehicles, electric trucks, blockchain, the Internet of Things (IoT), and new mobile-enabled categories are all poised to explode onto the scene in one form or another.

“It’s hard to predict what’s real and what will fade away, but expect 2018 to become a year of heavy innovation for supply chain leaders, even if it’s experimental.”

Vivek Soneja, writing for EBN online  asserts that “Blockchain capabilities have transformed collaboration across trading partner networks”. He believes Blockchain will “enable much tighter collaboration across supply chain planning and execution decisions. ”

Read our latest articles on Blockchain by Basware’s Paul Clayton and  InstaSupply’s Simona Pop.

2. Brexit Will Continue To Cause Disruption 

“While 2017 was the year of Brexit uncertainty, 2018 will be the year where things start to change,” asserts Francis Churchill on Supply Management.

Last year CIPS revealed that 63 per cent of EU companies planned to move some of their supply chain out of the UK as a result of the decision to leave the single market and customs union.

“The slower-than-expected progression of Brexit negotiations has put off business investments in current or new UK operations,” explains Gary Barraco on Global Trade Mag. Recent readings on economic growth showed investment by companies to be flat in the second quarter.

“Supply chain executives are voicing concerns about tariff and quota changes, hoping to keep trade open and flowing as it does today. For manufacturing to remain strong, the raw material imports from Asia need to remain duty and tariff free, as they are currently in the customs union. Costs could go up without the trade advantages, leading to higher export costs from the UK.”

We discuss the implications of Brexit for procurement in this Procurious blog. 

3. Cognitive will reign supreme

Global Trade Magazine predicts that “by the end of 2020, one-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities, thus increasing cost efficiency by 10 per cent and service performance by 5 per cent.”

And IBM predict that, by this point, all of our important procurement decisions will be made with the assistance of artificial intelligence. We know that our teams must “transform or die” if we don’t want the function reduced to the back office,  facing extinction.

But if you’re still feeling a little overwhelmed by the magnitude and potential of cognitive technology or simply wondering how to get started, this Procurious article has some great advice.

4. Transparency

Paul Martyn , writing for Forbes, spoke to Sue Welch, CEO, Bamboo Rose, on her supply chain predictions for 2018, discussing why “transparency and sustainability will be practiced with more vigor in 2018.”  She said ” ‘There’s been an explosion of demand from consumers to know where their products are originating and the required information is extremely granular. For example, with a package of carrots, consumers want to know not only the farm where they were harvested, but also the row and lot number where the carrots were planted.’

“Welch, whose company, Bamboo Rose, works with a number of top retailers and apparel companies, expects traceability demands to not only shape how consumers buy, but how companies will source and market their services.

“Smart retailers will begin to market their products from an information/sustainability-first standpoint and to be credible about it, they’ll need to invest in integrating technology that makes this level of transparency possible at every level of the supply chain.’ ”

5. Cybersecurity

Global Trade Magazine predict that by the end of 2019, cybersecurity will have surpassed physical security as a top concern for one-half of all manufacturers, and in the transition to digitally enabled, cognitive supply chains, cybersecurity will have become a top investment priority.

“High-profile hacking cases that compromise sensitive information for millions of people will continue in the coming year.” states Soneja, “With the proliferation of data and connected endpoints, companies will need to step up their security and privacy protection protocols in 2018.”

Earlier this year, we spoke to Craig Hancock, cybersecurity expert and Executive Director of Telstra Service Operations on the dangers of cyber crime. Read the full article here. 

6. Back to basics

“While a number of new trends are giving procurement leaders directions to explore in 2018, many supply chain professionals are still aiming for easy-to-understand goals” explains The Strategic Sourceror.

“According to Deloitte’s latest research on chief procurement officers, cost advantages and cash flow improvements are still the bread and butter of the supply chain. Traditional efforts to improve contracts and advanced, tech-driven strategies can deliver favorable costs to companies.”

7. Big data is a big deal

“In the context of the supply chain for most businesses, big data and predictive analytics are still an untapped resource that can potentially provide insights which help anticipate or respond to events or disruptions,” explains Raanan Cohen on Supply Chain Management review. 

“Unpredictable consumer behaviour, traffic or weather patterns, and labour unrest are all external events that can disrupt a supply chain and lead to increased costs and customer service challenges. Big data can help organisations become better trading partners to their customers and suppliers. But before insights and analytics can be leveraged for a better supply chain, there’s a huge task at hand for the many organisations that need to first collate data points from all sources and align them to their business operations.”

Don’t be Fooled and Underestimate Blockchain

Do you find it comforting to dismiss blockchain as “flash in the pan”? Simona Pop believes you’d be a fool to do so and explains why it will live up to the hype.

There is a pattern emerging where new technologies are treated with a certain degree of skepticism. After the initial wave of excitement and expectation, many of the game changing advances are suddenly approached with a “flash in the pan” dismissal.

Is it meant to reassure comfortable people and businesses that carrying on as they are is the better option? Why risk innovation when you can draw out a tradition type stance?

But this isn’t the technology’s fault. Many of these advances are – when divorced from the Gartner hype cycle and the hashtags and actively placed in their proper context – exactly as exciting and game changing as they seem, if not more so.

Blockchain is a high-profile victim of this phenomenon: as a distributed ledger technology that promises faster, more secure payments, many industries have been exploring its possibilities and many more have been writing and talking about it.

Purchasing is no exception. And while blockchain technology may have limited application in other professions, in this one, it will live up to the hype. As a means of reducing costs, improving efficiency, controlling fraud, and boosting transparency, it has tangible, real-world benefits for procurement functions – whatever the market or business they work within.

In a recent article, Paul Clayton, Head of New Service Development for Basware, states:

”In 2017, blockchain is word of the year, it’s absolutely everywhere. But it’s not earth shattering, it’s not the third generation of the Internet it’s just an interesting concept with some obvious benefits and flaws.”

Let’s go through some of the reasons why Basware feel blockchain is not all it promises to be for finance and purchasing:

  1. “Whilst a blockchain itself is safe, an application using it remains hackable” – This is also true of your bank software, or Apple Pay or pretty much any software we are currently using for payments. It should not stop us using it or leveraging its deep transformational effects in how businesses operate.
  2. “It can be too transparent” – Technically true, but in reality the references to user wallets are encrypted key strings which, whilst easy to relate to the originating source and other related transactions, is not as easy to relate to an actual physical person. In much the same way as a credit card number isn’t easy to relate to a person without extra information.
  3. “It’s not the most elegant solution” –  Here’s where we strongly disagree. The elegance is in the simplicity. Banks have been trying to come up with distributed ledger technology since the 70s but they were hindered because they refused to be outside the transaction. By using TLS style encryption and cutting out the transaction verification at financial institution level, the whole transaction becomes significantly simpler.
  4. “You can still lose things!“ – Of course you can. You can lose your wallet too.

The argument that there isn’t really that much value in blockchain when the benefits of smart contracts and removing the invoice are tangible possibilities is nonsensical. Removing  the need for invoice processing is huge and any platform truly helping businesses handle their invoices and payments should know this. Invoice processing, and invoice fraud by proxy, are the biggest threats to company money out there today. Just look at Facebook and Google who were victims of $100M payment scam this year.

Blockchain automates trust

Trust is the cornerstone of every business relationship. On a fundamental level, you need to believe that the other person is who they say they are – and they need to believe the same of you.

In this age of phishing, malware, and general cyber security attacks, this seemingly simple principle becomes complicated. Login details are stolen and turned to criminal ends; high-level executives are being impersonated by hackers, who then persuade other parties to release vital funds; the sheer scale and variety of cybercrime is growing.

Blockchain provides a means of automating trust. By using permanently retained historical data to authenticate everyone involved in a deal, each side can be assured of the other parties’ trustworthiness: the seller and buyer alike are always who they say they are, and the product is the right product. What’s more, because prices cannot be modified, invoices will effectively be rendered obsolete.

This greatly simplifies the complicated, multi-faceted transactions that make up modern supply chains – maximising security and reducing the risk of fraud.

Blockchain is fast

Procurement functions will also benefit from the speed and efficiency of blockchain technology. For one thing, it’s fully digital: by taking the more time-consuming elements of a conventional transaction out of the equation, you immediately save time and resources that would have been spent on these tasks.

Shared access databases mean that it’s no longer necessary to manually scan invoices – dramatically accelerating the reconciliation process as all parties are allowed to view the same transaction.

Blockchain effectively cuts out the middlemen. By removing all intermediaries, it makes the processing of payments and transactions much faster: purchase order data can be exchanged on the blockchain at a far speedier pace than current levels will allow. This technology can also identify the nearest and most cost-effective vendors: decreasing lead and work time, and improving your operational efficiency.

Blockchain creates strong audit trails

Blockchain technology stores every detail of every transaction at every level of the supply chain. This will – as mentioned above – facilitate greater fraud control, and it will also offer transparency into issues of legality such as money laundering and the use of child labour.

And though it’s a digital technology, blockchain will also assist with the tracking and recording of physical items. As they are transported across local and international borders, they can be identified at each location – creating a strong and fully documented audit trail.

This kind of end-to-end visibility ensures that delays are rare and that missing items are found and allocated to supply routes more easily. This allows you to manage and optimize these supply routes with maximum efficiency – ensuring that no space is wasted and no customer disappointed.

It’s clear blockchain will have a significant influence on procurement and finance. The advantages of being able to streamline business processes, secure payments, and automate workloads shouldn’t be understated. Do the research, ensure you’re positioning your business correctly and you’ll be in the camp that benefits – today, and in the future.

See InstaSupply’s co-founders chat about blockchain and its vital role on our roadmap.

Is Independence The Next Procurement Disruptor?

In workplaces that have less structure and much greater independence, where we can bring our own technology to work and use it to innovate, what does the future hold for procurement?

Lightspring/Shutterstock.com

Disruption has become something of a buzzword lately. With brands like Uber, Airbnb, Airly and Tesla making headlines in Silicon Valley it’s very easy to get swept up in the momentum; where is technology taking us and how can it lead us to better outcomes?

Is technology fear making you freeze?

After speaking at a Young Innovators conference in Denver Colorado recently, I met with delegates afterwards to discuss their technology challenges.

Our conversation revealed that whilst technology was viewed as a great enabler and business simplifier, they were fearful of the cost and effort required for implementation – so fearful, that many had resisted changing existing legacy technology even when they knew it was bad for business.

It reminded me of Kodak, a story so powerful in reminding us how an inability of a company to act due to fear of change, risk aversion and desire to protect the status quo killed a global business.

When it comes to legacy software, perception might be that it’s better the devil you know. But we have reached a new era of the digitally connected individual, one who values instant access to information. The digitisation and connections of our personal environment is leading to the same changes within the workplace, allowing buyers to become more productive and engaged in the buying process.

Procurement teams have successfully become more integrated into businesses through a combination of people and technology and have delivered strong savings and operational improvements, but where are the future incremental improvements going to come from?

Reinventing the rules with the cloud

It’s becoming very clear that cloud-based applications are and have re-invented all the rules.

Cloud based applications are driving a fundamental shift that will transform many aspects of procurement and strategic sourcing.

Procurement teams are beginning to understand the benefits new technologies can bring to an organisation, even when it means that buyers are working with, and bringing software and applications of their own choice into the workplace.

Traditionally we have focused only on the team, today we are witnessing the rise of the individual within a team. A future where procurement individuals are connected to the organisations approved suppliers but continue to use their own technology to improve those interactions and connections. This is allowing them to find and deliver incremental improvements businesses are demanding.

The trend is right in front of us, our work environments have transitioned from structured workplaces to become open and community based; the same is occurring with our technology decisions. We still come to the office each day but work in an environment that has less structure, more innovation, flexibility and freedom.

Bring your technology to work day

Today you can bring your own technology into the office, use it to drive innovation, supplier connections and collaboration and then connect to the business mainframe to download and upload data.

The future will see more individuals challenging existing processes and demanding better connected applications that are just as fluid and flexible in business as they experience in their personal lives.

Our future procurement leaders will look for solutions that simplify key processes, are easy to implement and use and gather the key data that can be utilised to improve decision making.

Finally, I recently came across the following quote from a CPO in an Accenture article, “it’s gotten to the point now where technology is evolving faster than my mind is conceptually able to digest it”.

Welcome to the world of you, the procurement individual!

Alan is a thought lead and CEO of sourceit, a technology company that has led the market in the development of simple and easy to use sourcing applications for a wide of direct and indirect categories.

Sourceit offers three different products for buyers:

  • RFQ – request for quote software for products and services
  • Market – a specialized procurement and job management application for marketing services, and
  • Catalog – an inventory management and on-demand product/services ordering application.

“I Just Don’t See How Blockchain Can Apply To My Business”

Blockchain naysayers are echoing the words of short-sighted CEOs in the early 1990s who refused to recognise the disruptive potential of the Internet. American Blockchain Council Executive Director Jack Shaw demonstrates why businesses need Blockchain as a cornerstone of their digital transformation strategies.

Business Technology Futurist Jack Shaw is a keynote speaker at Procurious’ upcoming Big Ideas Summit in Chicago. Register now as a digital delegate.

Very few procurement functions are not currently going through some sort of digital transformation. Typically, the transformation includes building digital tools to enhance customer engagement, robotic process automation for rules-based activities, the use of big data and analytics to bolster decision-making, IoT integration, moving your business to the cloud, and – for some – bringing cognitive computing on board.

What’s missing from this daunting to-do list? The integration of Blockchain technology.

Jack Shaw explains why Blockchain needs to be a fundamental part of every business’ digital strategy: “Blockchain is unique among emerging technologies. Other technologies, such as IoT, can be extremely powerful as a ‘point solution’. This means they apply at a particular point in the business process, or even at a particular geographical location in the supply chain, to increase accuracy and speed.

“Blockchain, however, provides the infrastructural glue that ties these disparate technologies together into a single, coherent business ecosystem. You can have thousands of participants accessing timely, shared data, which allows you to step back and think about how the whole system can work more effectively.”

Two exciting benefits Blockchain technology will bring to the supply chain

Speed: Shaw talks about the incredible increase in speed of international trade transactions that Blockchain can deliver. “When I spoke at a global big data conference in China recently, a delivery of cotton from Houston U.S.A. had arrived at the local Chinese port three days earlier. With an international shipment like that, the paperwork involved normally takes around 10 days to settle. However, this particular shipment had been arranged with Blockchain and scanning technology, and it took a mere 10 minutes in total.”

Validation of providence: Supply chain professionals know the importance of transparency when it comes to sourcing products. Even if your first, second or third-tier suppliers seem legit, there’s also the risk that something illegal exists further down your supply chain, such as conflict minerals or modern slavery. With Blockchain, every step of the products’ lifecycle can be tracked and validated, all the way back to the extractive industries. As Shaw says, “Lack of visibility will no longer be an excuse.”

Cybersecurity and Blockchain technology

While it isn’t a magic bullet for cybersecurity challenges, Blockchain creates a level of trust that’s well beyond anything that has existed previously. Transactions are readily accessible (and transparent) for those who are authorised to see it, and un-hackable by those who aren’t. Not only are financial transactions more secure through Blockchain technology; it’s also very powerful for protecting data.

Shaw cautions that hackers could still find their way in by feeding incorrect data through in-house systems. “In a way, Blockchain will step up the requirement for improved data integrity. Technology such as cognitive computing only works if the data is valid.”

The Internet of Things (IoT) is another frontline for cybersecurity. “How do you know that the data you rely on to make decisions is actually from a particular device, and that it hasn’t been hacked or spoofed? Blockchain can provide an immutable record that uniquely identifies a data-providing ‘thing’ to ensure that you know your information is coming from that source.”

Shaw gives the example of odometers, where unethical car dealers can hire digital hackers to alter the mileage. Bosch has recently integrated Blockchain technology with odometers which upload digital readings hourly. “You can extend this concept across big data, analytics and cognitive”, says Shaw. “It only works if the data is valid, and Blockchain is one way to ensure that.”

Blockchain technology will be one of the many disruptive forces discussed on 28th September at the Big Ideas Summit in Chicago. Register now (it’s FREE!) as a digital delegate to access all the news and content from the event.

Autonomy, Mastery and Purpose: Why The Young Are Snapping Up Tech Jobs

Job satisfaction comes down to three things: autonomy, mastery and purpose. Does this explain why millennials are dominating in the tech industry? 

Anton_Ivanov/Shutterstock.com

Numerous industries have been accused of many different types of hiring bias and flawed hiring policy.

The service industry, for example, has long been subject to questions about its lack of affirmative action in this area based on the demographic of candidates that tend to be allocated these roles. The same applies even within typically diverse workforces.

Hiring bias at its worst

Few sectors have faced the intense scrutiny aimed at the tech world in recent years, owing to its pervasive reputation for hiring vastly disproportionate percentages of younger males.

A quick Google search of “industry hiring bias” results in almost an entire first page of links to think pieces about Silicon Valley.

There are countless arguments to be made on the subject, many of which rightly focus on the urgency of addressing this gender imbalance. One popular proposal for tapping into the vast, and shamefully underused, female talent pool suggests funding schools to better promote careers for women in computer science.

But if the tech industry is also heavily skewed towards youth, how long would those careers remain satisfying for?

Job satisfaction at the biggest tech firms

This latter question prompted a recent research project by online compensation and benefits analyst Payscale. By gathering data from almost 35,000 workers across 17 of the biggest tech firms in the world – including eBay, Google, Cisco, Facebook, Samsung, Intel, Apple and Microsoft – researchers attempted to gain an overview of how employees’ job satisfaction levels mapped on to various metrics such as median age, early and mid-career pay levels, and total years of industry experience.

When transposed as a series of infographics, the data seems to highlight some marked trends across the board: in particular, workforces with higher average ages in the study group (notably IBM, Hewlett-Packard, Oracle and Samsung) were among the lowest-scoring in terms of overall job satisfaction.

Moreover, many of the same names also placed highly in terms of their employees’ length of tenure with the company and total years of industry experience, while coming in amongst the lower rankings for both early- and mid-career median pay levels. Taken at face value, this immediately presents various possible scenarios.

One natural observation would be that the ‘more satisfied’ workers were often among those being paid the most relative to their experience, which, let’s face it, doesn’t seem much of a hot take.

What appears to be a fairly direct inverse correlation between median age and reported job satisfaction is potentially more interesting, but the question remains as to whether this phenomenon is in any way unique to the tech industry. After all, there’s every chance that the methodology of the study simply benefits companies who have a high turnover of younger, less experienced workers, whose expectations and needs are typically less complex at such an early career stage.

Are millennials best-suited to tech jobs?

When it comes specifically to tech roles, and the fact that they’re so commonly filled by younger-than-average staff (the national median age for a US worker is 42; at Facebook, it’s just 29), many people don’t think it’s quite that simple.

The much-quoted author, speaker and ‘business guru’ Daniel Pink, responsible for such widely read titles as Drive: The Surprising Truth About What Motivates Us, might be chief among them. Pink’s theories around what ultimately leads to lasting job satisfaction focus on the triumvirate of ‘autonomy, mastery and purpose’. In other words, a sense of independence, a feeling of capability, and a genuine motivation to keep plugging away.

Millennials entering the tech industry may be particularly well-placed to tick all three of those key boxes because of, not in spite of, their age. Pink notes that, having grown up in an environment of always-on connectivity that didn’t fully exist 20 years ago, millennials are finding it much easier to adapt as the internet rapidly erodes the decades-old concept of a standard office-based work week.

He also points out that today’s all-pervasive digital culture means new graduates no longer seek to separate their work and social lives to nearly the same extent as previous generations did. As a result, the boundary between professional performance and success in other areas of millennials’ lives is arguably less clearly defined; this in turn becomes an obvious source of general motivation that perfectly suits the thrust and structure of many cutting-edge tech firms.

Combatting age discrimination

The extent to which these sorts of theories hold water is very much up for debate. What we do know is that the debate is heating up: last year, Bloomberg reported that in just eight short years, 226 complaints pertaining to age discrimination had been registered against the top 150 Silicon Valley firms.

While tech employers continue to perform well in global Best Employer lists, the conversation will certainly benefit from some longer-term data as we start to develop a clearer picture of career movement across the wider industry in the coming years.

Has Technology Tipped the Scales on Your Work-Life Balance?

Information on demand. Constant connectivity. Global coverage. Are these a boon to our working lives? Or can there be too much of a good thing?

We live in a world of unprecedented connectivity. No matter where we are in the world, we have a host of information at our fingertips. Which is great when it comes to accessing vital data on the go, but could be having a detrimental impact on our personal lives.

The benefits of being constantly connected are easy to see. But it’s leading to a situation where people struggle to switch off when they’re not in the office. Checking emails on the way to work, or before going to sleep. Doing that “last bit of work” on the train home. Catching up on work over the weekend, or even the night before returning to work following a holiday.

Work phones and laptops, internet-based document storage and the increase in working from home leaves that bit of temptation to do a little bit more. After all, if you clear some of those emails tonight, you can start afresh tomorrow. Right?

Wrong! If this sounds familiar to you (and yes, there are plenty people in this position) then you should think hard about what you’re doing. No-one minds working beyond contract hours or staying a bit later when there’s urgent work to finish. But why, when there aren’t pressing deadlines, do we voluntarily give up our free time, weekends, or even our holidays to do extra work?

At best you get a reputation for not being able to switch off. At worst, it can impact on your personal life, and could even create an expectation that you’ll be on hand to respond to any query, no matter when it’s been sent.

Right to Disconnect?

Some countries are helping workers rebalance their scales. At the end of 2016, a new law was introduced in France, which meant that organisations had to give employees a “right to disconnect”. Companies had to work with employees to establish a basis for out-of-hours or home working, or make clear what expectations there were of workers.

In other European countries, companies are allowing employees to delete any emails that are sent to them while they are on holiday. Given the choice of a clean slate on your return to the office, it might also help remove temptation to access your inbox in your own time.

The Millennial generation is the first to really confront this issue (though this doesn’t mean other generations aren’t failing foul of it too). However, it’s hard to diagnose an issue until you know what it looks like. Author and motivational speaker Simon Sinek sheds light on some of the key points in this video.

(The key part is at 3:15, but if you have time, then it’s worth watching the whole video.)

So how do you change these habits and start to regain control of your work-life balance? Here are some top tips:

  1. The Phone. Down.

It might not always be possible, but it’s time to create some space between you and your phone. It doesn’t need to be all the time, but having no-go areas in your home, or certain times when your phone is off is a good place to start.

If you have a dedicated work mobile, then leave it somewhere that you’ll just pick it up as you leave the house.

Why not start by not having your phone next to your bed overnight? This will help to remove the temptation to check emails first thing in the morning or last thing at night. It might help you sleep better and start your day off on the right foot.

  1. Time Off is Your Time

You’ve earned the right to some downtime at the weekend. You’re entitled to your annual leave, and to enjoy it as time away from the office. And you’re entitled to be left in peace outside of working hours. Don’t voluntarily give this time up checking your email or finishing work.

It’s not always going to be cut and dried. But try to set yourself a time to stop working each evening, particularly on a Friday. This is particularly important if you work from home. Try to create a separation between work and home.

After all, does it really matter if that email is sent now, or document completed, when no-one else is going to see it until Monday anyway? Your brain will thank you for it (and your family/friends/loved ones probably will too!).

  1. Stop and Smell the Roses

Life doesn’t have to be lived in front of a computer screen or glued to a phone. Get outside and enjoy spending some time away from your desk. Challenge your friends and family to leave their phones behind (or in a bag at least) when you’re out.

Keep phones, tablets, computers, and technology away from the dinner table. Who knows, we might even rediscover the lost art of conversation!

Some of this is tongue in cheek. Most of it needs to be taken with a healthy dose of realism and knowledge that we can’t just drop technology. But we can make it work for us, instead of making it seem like a completely indispensable aspect of our lives.

So take control of your technology, and tip your work-life balance scales back in your favour!

Blockchain Is Real. It’s Here Now And It’s Coming To Transform the World

Why are organisations so keen to bury their heads in the sand and pretend blockchain isn’t happening – it all starts with a severe case of NIH syndrome…

There are certain market analysts who would have you believe that the benefits of Blockchain technology are “Hype” and the real benefits are still 10-20 years away. There are several reasons for this:

Ignorance

Although many believe such firms to be thorough and knowledgeable about every leading edge technology, they are not. This is evident in a lack of participation in key consortiums and conferences and a lack of good research leading them to a parochial view of Blockchain’s Global impact which they put in print.

NIHS (Not Invented Here Syndrome)

“Coin the Term and Own the Market” has always been the mantra of some these firms.  “If we don’t say it is so – then it ain’t so.” There has been at least one attempt to rename the Blockchain market “Metacoin”- “Meta” meaning “about or referring to itself.” This shows a clear misunderstanding of the market.

It’s not “about the Coin”…

…whether Bitcoin, Ether, Zcash, or any others. Again, this is a very narrow view of what Blockchain is all about. What are most important are the underlying capabilities of Blockchain technology that enable those cryptocurrencies, but also enable many other unrelated and far reaching benefits.

Blockchain is not synonymous with Fintech or Bitcoin

Currently, Financial institutions arguably stand to gain the most by adopting Blockchain technology and stand to lose the most if they don’t. The major global financial institutions, especially those in the U.S. also face the biggest challenges in getting their objectives achieved.

Blockchain technology can resolve many inefficiencies inherent in the trade settlement process that cost them and customers time and estimated $20 billion per year. There are three major prohibitive factors in achieving this:

1.   Existing Technology infrastructure

Understandably financial institutions don’t want to start over redesigning their systems from the ground up so they are trying to select bits and pieces of Blockchain and integrate it with existing technology. History has shown this approach has never worked very well and could take years to accomplish if they are ever successful. This is one area where market or analyst skepticism is derived from. On this they are correct.

2.   Current Legislation

Mandating human intervention and oversight in settlement processes that Blockchain can negate the need for has hamstrung efforts even more than the technology issues.

3.   Ownership & Control of the processes and technology

Financial institutions want to own and control these processes via “private Blockchains” so they can make the rules and control the economy. “Public Blockchains” are like the Internet and are not controlled by anyone. We know how well “private internets” worked – remember “intranets”?

Ironically the public gave that “trusted intermediary” role to financial institutions years ago and they have abused it time after time. It was the Global Financial Crisis of 2007-2008 which motivated Satoshi Nakamoto to invent Blockchain to enable technology to do what we could not blindly trust banks to do for us. In spite of Dodd-Frank oversight legislation, the recent Wells Fargo debacle has shown that not much has changed.

With all of these challenges for Financial Institutions to adopt Blockchain technology, one might say, “Ok, now I understand why Blockchain is more hype than reality – lots of discussions, lots of promise, and a handful of promising but limited test-scenarios. Lots of investment, but not much to show.” Yes. One could clearly have that view if :

1.   You didn’t look beyond the Financial Industry,

2.   You thought Blockchain was the same as Bitcoin,

3.   You didn’t look beyond the borders of the United States, and

4.   If you ignored or were unaware of the implications of Blockchain security, record immutability, Smart Contracts, micro-units, micro-payments, and digital identification already implemented and working in many other countries in hundreds of applications across every industry sector.

Michael Shaw is CPO and Executive Board Member of Sourcing and Procurement Executives (ACSPE) and Chief Information Officer at Blockchain Executive.  This article was originally published on LinkedIn.