Spend Matters welcomes this guest article by Vroozi.
As Spend Matters and Vroozi wrote in their jointly produced research paper Declaration of the New Purchasing: A Buying Manifesto:
Article 12: The Internet of Things (IoT) will surround us, creating unprecedented levels of visibility into the consumption patterns of what we buy and how we use it, creating feedback loops and changing how we manage demand.
All purchases (including money spent on people and labor) will be tracked and monitored continuously. From apps on devices that track movement and access to tagging equipment and supplies, we will create unprecedented sets of data from which to analyze and make better decisions. The feedback loops between different tagged assets, items, people and customer activities will further create new levels of visibility through meta-data analytics, changing the very basis of how we assign our time and effort to different activities in procurement.
Smart refrigerators, smart watches and smart cars - the IoT makes all this possible. It has offered consumers a whole host of innovative solutions, but what can it do for businesses, specifically procurement departments?
Could those “unprecedented sets of data” offer buyers and procurement leaders insight into when certain items are needed? Could it give insights into employee buying behavior and preferences – whether they prefer to shop via laptop, phone or tablet? Whether they compare prices across suppliers? Whether mobile-advertised discounts change their buying behavior?
The answer to all of these questions is a resounding yes.
For consumers and end users, the rise of IoT means an increase in personalization, customization and automation. For businesses, there is another valuable asset IoT will bring: information. All of the devices, applications and supplies your people use will be sending meta-data analytics back to you to provide greater insight into the activities and needs of your business.
As you gain more visibility into your customers, employees and purchases, what will set you apart will be your ability to collect, analyze and most importantly, use this information.
For procurement, the IOT will present an increase in spend visibility and a better understanding of supply and equipment usage. This will help your procurement team improve catalog content and spend management by knowing exactly what is being used and exactly what is needed. The ability to more accurately predict these needs will also greatly improve budget and contract management.
Taking full advantage of the procurement benefits of IoT will require your procurement department and solutions to be flexible and efficient. Even though the procurement department will be working with more analytics than ever before, the IoT should not increase your administrative and operating costs.
As devices become smarter, more mobile and more connected, the devices used to manage them need to do the same. Mobile procurement will become an even more vital element of your procurement strategy. On the purchasing side, your users and employees will need their procurement workflows to be mobile and connected just like everything else in their lives. Even more important, however, is that the procurement department is able to analyze the insights gathered from its users’ purchases and activity in a mobile and connected way.
The IoT will greatly improve procurement productivity for the entire organization, if the company is equipped to process the analytics gained and make them actionable to the right people.