A Buying Manifesto Looks at the Internet of Things

Our US colleagues and Vroozi, mobile eProcurement experts, recently published an article on the Spend Matters US site that referred to their jointly produced research paper Declaration of the New Purchasing: A Buying Manifesto:

One of the “Articles” in their Manifesto was this:

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.

 

I’ve been doing some research too on the IoT with regard to a paper for a  client, and it is undoubtedly going to lead to all sorts of changes and opportunities. (the IoT, not my paper). As the SM US article says;

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.

This is all going to have a major effect on our daily lives as consumers. It might even help to address some of the most difficult problems we face – urban transportation, health and social care in old age, for instance, or knowing when you’re nearly running out of cling-film! Seriously though, it will have some mega-effects, and also impinge on lots of smaller day to day tasks and activities.

There will be various effects and opportunities for procurement too. The proliferation of data is one obvious outcome; organisations that gain from the IoT will work out how to make sense and use this huge quantity of data and turn it into actionable intelligence. As the US article says:

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.

Do read that article here; and you can download the “Manifesto” here.

First Voice

  1. Dan2:

    Read an interesting article on IoT and its potential to drive new buying models. The example given to make it ‘real’ was around white goods.

    Currently a washing machine is designed to break after a certain period of time – in order to drive users to upgrade. IoT might allow for a different buying model of:

    – you are given a washing machine for free
    – you pay per wash (as the device is monitored by the company to allow for billing)
    – company designs the physical device to last for longer, as they get ROI the longer it lasts (environmental benefits for all)
    – upgrades to the device are through software updates, rather than hardware (example given was Tesla upgrading their car via a software updatehttp://www.telegraph.co.uk/technology/news/11378880/Tesla-software-update-did-your-car-just-get-faster.html) to extend its life and get return on investment on the physical machine
    – company gets real insight into how users actually use the washing machine i.e. you have 20 programs on it now, but most people use 2 – 3

    Not sure if it’s hype or not, but certainly gives food for thought around how buying might change due to technology change.

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