By Richard Barnett
Innovation and disruption are hot topics in general and in the procurement field in particular. Part of what’s driving this is the sense that, for years, procurement has been lagging behind other functions when it comes to adopting new technologies that would allow it to become a more agile, strategic and proactive piece in an organization. This is no longer the case.
The same innovations that power the technologies that most of us take for granted in our everyday lives, that have been “disrupting” industries and workplaces for years, are becoming available to procurement professionals and their teams.
This past month in Phoenix, I was lucky enough to attend one of my favorite events of the year, Gartner’s Supply Chain Executive Conference. While I was there, I sat in on Geraint John, Research Vice President at Gartner, and Kevin Purser, Head of Global Supply Chain, Sourcing, and Procurement, at Fitbit’s presentation on the topic of digital procurement and how Fitbit implemented digital procurement to get ahead of the game.
Here’s what they discussed.
Geraint started off with a bang. Literally. Reminding the crowd of the famous marketplace scene in Raiders of the Lost Ark, where Indy faces off against a swordsman. Dr. Jones watches as his opponent swings the sword around in an amazing display of skill. Then Indy, in one smooth move, pulls out his pistol and shoots the swordsman.
Geraint suggested that in a lot of cases procurement professionals are in the position of bringing a knife to a gunfight.
“At least part of what we’re going to talk about – and I think what we need to face as a sourcing procurement community – is how do we even things up a little bit? How do we make sure that we’re in the best possible position to use data and intelligence, including while we’re sitting around the table with some of our suppliers?”
The answer is digital procurement.
Digital Procurement. What exactly does that mean? Geraint went on to outline three broad areas:
1. Friendly sourcing tools. More than just improvements in functionality, this means providing professionals with more intuitive software applications that can be used in different environments and places. Tools that not only save people time, but also help them to become better professionals as they move along their career paths. Supporting them and allowing them to monitor themselves and adjust accordingly.
2. Big data analytics. Traditionally this means managing internal data, but the more advanced platforms can now manage reams of external data from an ever-growing list of sources, as well. The processing power and networks available today mean that, taken together, this data can generate insights that no human can replicate.
3. AI-powered automation. These are the fast-developing capabilities of the future. For example, machine learning that can process the terms and conditions across thousands of contracts and then from that generate usable information presented in a coherent form. Down the road this might include the ability to automate decisions based on market criteria.
Geraint finished by saying, “I think personally the opportunities for us as sourcing and procurement professionals are extremely exciting. There’s a lot of work to be done, but there’s a lot of opportunity and potential here.”
I’ll leave you there and follow up with Part 2 of this series where Kevin and Geraint will explain what this exciting opportunity can mean for procurement professionals.