No, Robots Will Not Run Procurement by 2020

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Editor’s note: This essay is derived from a recent pub debate held by our Spend Matters UK/Europe colleagues. The topic up for discussion was the following proposition: “This house believes that robots will run (and rule) procurement by 2020.” While Spend Matters Founder and Head of Strategy Jason Busch was originally slated to chair and facilitate the debate, a last-minute absence led him to step in for the opposition. Below is an edited and condensed version of his argument.

When I think of robots, what comes to mind? For me, it’s the good guys. Robots, after all, can do no harm. It’s Michael Jackson in the movie “Moonwalker.” You know, when the junior member of the Jackson Five transforms into a robot and goes on a dark-side killing rampage. May the moonwalker rest in peace.

But robots aren’t all good. Here are examples of a number of bad robots that come to mind.

Who can forget HAL in “A Space Odyssey”? Or what about the fat, squat shooting robot ED-209 in RoboCop? I was actually somewhat partial to Vanessa Kensington in Austin Powers, until she took off her human mask. But I’ll leave it at that.

There are truly creepy robots, too: Ash (from “Alien”) and the creepy-crawly sentinels from “The Matrix.” And who can forget Auto from “Wall-E” — probably the best example of gently trained AI gone wrong.

Finally, I would be remiss, given the venue [The Clarence in Westminster, London], if I did not mention the androids in “The World’s End,” a movie as metaphor for the death of the independent pub and real ale in this wonderful country – at least how I read into it.

But now, let me tie this back around to the motion: “This house believes that robots will run (and rule) procurement by 2020.”

I believe that the general direction of this argument is not in and of itself wrong. But there are a number of flaws in the nuance of how the motion has been proposed. And we are, after all, asking you to judge the merits of the proposal on its own, as it stands.

Let me present you with three arguments against it.

2020 is Too Soon

First, I have a serious issue with the timing. 2020 is not happening.

Artificial intelligence, the central component of robotics as we define it, is not ready for prime time today outside of highly targeted applications. There’s no way robots are running purchasing if, in 2017, AI is a novelty of a novelty.

Procurement is Not Purchasing

Transactional purchasing can (and should) be automated to the greatest degree possible. It already has been in multiple places:

  • Multiway matches in P2P to avoid unnecessary paper and human oversight
  • Guided buying approaches in e-procurement that cut out “buyers” from the process of shopping and approvals and guide users to the best decision for the business while making them feel good about what they’re doing
  • And, of course, the overall digitization of all sorts of back-office functions such as accounts payable

People are bad when they touch these areas. But even here, we’re not talking about robots. We’re talking about cloud procurement apps 101.

Robots Are Heartless

Third, robots lack empathy. And procurement (not purchasing) is about putting yourself in the shoes of everyone else in the business and in our supply chains.

As I just noted, our jobs are in procurement today, not purchasing. Allow me the chance to expand on this argument and why it matters. In short, a transactional orientation to buying is only part of the world we live in.

Let me give you some examples.

Do you honestly think a robot, even in the next decade, will be able to do the following?

  • Convince the business to work with a secondary key potential supplier in a category based on a small (and accurate) set of old KPI data that show the vendor did not perform as some expected at the time
  • Get an internal working group together or consortia of like companies to agree on data collection and validation standards for the EU General Data Protection Regulation (GDPR)
  • Charm a CMO to consider a new approach to bidding out and managing agencies of record

Ask yourself these and similar questions and I suspect you’ll see arrive at the same conclusion I have.

Is AI Ready for Prime Time? Not Yet

Now, let me return to a prior point.

If what I have said is not enough to convince you, let me argue the robots are not ready for prime time. Here are three examples:

  1. In spend analysis, over 95% of the deployments in the market today still rely on rules-based cleansing models that work. And even AI-based models still require humans behind the scenes to do QA on the data once a system is trained in a given area. There are speed advantages, yes, but only if the model is trained correctly. And believe me, you don’t want to go first.
  2. AI simply doesn’t exist in P2P yet. We’ve been shown demonstrations of AI by more than one vendor that simply did not work in practice as planned. No harm — it’s beta. But when you ask for supplier guidance in one area and Siri says, “Let me think about that,” you quickly lose your audience in a demo.
  3. Look at those scrambling to embed robotic process automation. It’s those firms that have already chased labor cost arbitrage as far as they can. Now they’re looking to replace bodies with bots. If the “push” in the market comes from BPO firms, we know they’re just trying to save their margins. True AI and robotics will be a tech play, by technology firms with scale, of which SAP Ariba is one of them. It won’t be a last ditch margin preserving effort for services-oriented firms.

So please, focus on the reality of where robotic process automation is today, as well as the scope of the argument. On a timeline perspective, 2020 is unrealistic. From a scope perspective, robots will not yet have empathy to support broader procurement outside of transactional purchasing. And finally, the kit simply is not ready for prime time. It will be, but it’s not there yet.

Do you disagree? I invite you to defend your position in the comments below!

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First Voice

  1. Jonas T. Mantey:

    I agree with the author of this article robot can take away the discretionary powers of the buyer when applying the rules. E.g. how can robot negotiate with a potential vendor? How can robot respond to queries from a vendor?

    How can a robot ensure a purchase that is in the best interest of the organization ?

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