SAP Ariba on the Future of Procurement – Should We Fear the Robots?

We mentioned in our Friday round-up the SAP Ariba "Future of Procurement” event at the impressive Royal College of Physicians in London last week. There was a certain amount of overlap with the huge SAP Ariba Prague event back in June, such as Andrew Croston talking about his procurement transformation programme in Smith & Nephew. But there was enough to make it well worthwhile in terms of general thought-provoking discussion as well as some latest product development news and demos from the firm.

It was also the big match debut for Justin Sadler-Smith, newly installed as the firm’s “Head of Cloud Procurement, UK and Ireland”, who introduced the afternoon, as well as another chance for the indefatigable James Marland to wear his hat with his usual panache and style … !

Marcell Vollmer, the firm’s Chief Digital Officer, provided the first keynote - How the Digital Economy will Transform Procurement, Finance and Shared Services. He told us that not many jobs will be totally eliminated by automation, but most will be changed in significant ways. But he is optimistic; procurement will see an increasing focus on value, (supplier innovation, risk and performance, sustainable supply chain etc.) not just savings. And aspects of the procurement role can provide the “purpose” that millennials want in their jobs.

“Lights out” shared service and automation will of course address the traditional purchase-to-pay cycle, but he also thinks we will see significant changes in category management; we’ll come back to that point in a further article, as it links with the Govil / Wright session mentioned below.

The afternoon also featured a couple of panel discussions, which threw up some interesting comments, including Lance Younger of Deloitte suggesting that “category management is dead!” (Or at least on that fatal track). That caused a few murmurs; I’m seeing another potentially sparky pub debate here … And it wasn’t all about technology; there was talk of how we need to inspire people, our own teams and stakeholders to move faster, to experiment.

Perhaps the highlight of the day though was the final session with Shivani Govil, Global Vice President, AI & Cognitive, from SAP Ariba and Graham Wright, VP of Global Procurement & Procurement Services, IBM. You may remember the two firms now have a partnership, with the IBM Watson artificial intelligence (AI) capability coming together with Ariba’s broad and deep procurement technology products.

We’ve been a little cynical in the last year or so about Watson, having seen IBM seemingly talking about the same use-cases now for some time. But this seemed different, much more relevant to procurement activities in most organisations, and really gave me the clearest view I’ve seen yet of what procurement might look like in terms of how AI will insert itself into day-to-day, but non-transactional, added value procurement work.

So we’re not simply talking about the routine administrative stuff that I think we all know is getting automated, but rather activities around category management and strategic sourcing. There was enough there for us to cover it in a further article anyway, coming soon, but it also raises some tough questions about the future role of procurement professionals and functions which we’ve been wrestling with for some time.

We also enjoyed a specific breakout session looking at the latest SAP Ariba risk management product. Again, we’ll come back to that. But it really emphasises that supply chain risk is a hot topic and the leading software firms in our sector are thinking hard about how to address it – perhaps also mindful of the success of specialist solution providers such as riskmethods.

A worthwhile afternoon then; and more coverage coming soon.

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