Q&A With Graham Wright: The Tools IBM Procurement Is Using and Why

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In Part 1 of our interview chat with Graham Wright, IBM’s vice president of global procurement and IBM procurement services, we had just gotten down to brass tacks on what he considers to be the hallmarks of procurement transformation for organizations today.

(ICYMI, catch up on Part 1 here.)

Wright was also — for once — back at home in the U.K., which is not a regular occurrence lately.

“I’ve been home about six weeks this year,” he told me. “So, probably Heathrow’s as good a base as any, for me these days.”

However, upon a minor run-in with a hotel room doorway, he’s had to take it a bit easy. Luckily we caught up with him post-recovery. Here’s the second part of our conversation.

Spend Matters: How do you see the distinct areas of transformation you outlined [in Part 1] reflected in what you're doing within IBM to drive your own organization forward? What types of tools are you and your team personally using?

Graham Wright: We have a chart that we will show at the summit coming up, showing, effectively, us as the architects — what we do from ‘source’ to ‘procure’ to ‘pay,’ and how cognition and advanced analytics each come to bear in all of those areas. Also, what we think “good” looks like from a future perspective and where we think you should start on that journey, and the characteristics of your maturity to go through that journey on a timescale you can [achieve].

From a perspective of ‘Source,’ clearly having a sense of risk and demand forecasting in there is important and we're building cognition into risk. We have contract management, and we're building cognition into the way we do contrast and compare at a contract level, so if you’re acquiring companies or divesting of companies, then you need to have a faster, more probabilistic sense of what risk you are taking on and how to do that. Applying cognition in those areas gives us better insights even at the document level or the individual-clause-compare level.

We tend to use our internal organization to build, develop and create these corpuses of knowledge, which is the learning that goes on in the AI, onto a base that we can then use to commercialize externally. So we use ourselves as the guinea pigs to develop and learn, along with input from clients, for the directions that we are taking.

If you take the perspective of when you get those phone calls to say, “how much do I spend with that company?” or “what's our overarching relationship?”, etc., we're able to integrate various accounting ledgers from an IBM perspective in terms of what revenues, what spend, what's our contract structure, and who are the key partners there. We ingest parent mapping through external agencies to get that singular view. And we also ingest external information from the Internet, to give you a perspective of what's going on in the alerts, and also do real-time analysis of those companies against their peers and their performance. So you are enabling the teams [behind] all levels of your procurement process when they pick up the phone and talk to a company, with much deeper and greater insight as to what their relationship is.

Then, we go into areas of using Watson for pricing. Trying to understand a basic visualization all the way up to predictive modeling, as to what we are going to do from a price perspective. Such that you can react to purchase orders with spend in a way that you couldn't in the past to address changes in market dynamics, necessitating different negotiations, etc.

The same at the core level in the ‘Procure’ area, where RPA [robotic process automation] is being applied — at the same time, we've got advanced analytics that are going into there to help us with compliance management, KPIs across help desks and FLAs, average payment terms analysis to do real-time simulations, as well as looking at spend visualization and opportunities in there as well. From a broad perspective, trying to get intuitive through tech speech and imagery-guided buying as best as we can, as well as looking at cognition as it relates to help desk activities, or tier one activities.

All of these are emerging areas that are either early in concept or more advanced in deployment and using that as a way to try and understand what the end-to-end process would be for a client, from a cognitive procurement perspective. Underpinning all of that is our ability to drive master data management and try to figure out how we can enrich at the initial levels using Watson and getting our first pass yields significantly higher in using that to really getting our arms around the unstructured data as best as we can in that particular area both for ourselves and our clients.

SM: If you took, let’s say, the “procurement and supply chain management technology and services market” as a whole and treated that as a formal spend category, how important is that category to you?

GW: I would answer that through the announced relationship that we have with SAP Ariba that came out in the middle of this year, in which they have chosen and selected IBM as their partner to ingest further advanced analytics and cognition into their platform; both in terms of understanding the knowledge and learning in the use cases, but also as to how to support them in the development of the applications to make their procurement more enabled across the platform. They have the size and scale around the world, as do we, and together there's a phenomenal opportunity to make some awesome competencies and capabilities there, both for us internally and also through SAP Ariba and their clients as well.

At the end of the day, the technology itself is important but clearly we want the outcomes that come back from that. I see [technologies] as fundamentally important enablers and they also drive a different skillset for your teams in terms of understanding not only how and where they can be used, but also how they can be developed over time.

SM: In what aspect of procurement technology are you most interested in personally? Of the initiatives you guys and gals are working on, what really gets you going?

GW: I would say one core [passion] is extracting the value through innovation with your supply base. So this is a purely personal perspective and reflection, but the SRM side: how do you take all of these enablers, all of the insights, all of the ability to now drive upstream influence in a way that you never have necessarily been able to at the same level, and as a result of having that greater trust and confidence as you interact with your clients to the provision of more relevant, meaningful and impactful data — how can you unlock the true innovation and value to arguably influence the offerings, enable a company to react to their market in a different way and link the suppliers at the one end of your business to the offerings at the other end of the business?

If there's a way to continually develop and improve in that space, to have an increasingly greater material impact in the way that you can support your company through that ecosystem of partners that you are managing, I think any other technologies that can aid you in that space is what would be exciting for me. Whether that is in the provision of greater content, or greater data visualization, or in the way you can spend more time in interacting around fundamental issues that you may have to try and resolve or expand on or co-develop together in a way that you can address the markets, in a way that you can be more relevant to your clients as well in their journey in transformation, that's what will really pull me in.

Wright will be delivering a keynote at Procurious’ upcoming Big Ideas Summit in Chicago.

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