UX, Blockchain, IoT: The Future of Procurement Technology Unfolds at BearingPoint Speakers’ Series

Blockchain experts David Carmen, from left, Hannah Rosenberg, Dan Spillane, Dmitry Tyomkin and Luke Sully speak March 21, 2019, at a technology event in Chicago. (JP Morris photo / Spend Matters)

Imagine that your procurement technology allows you to order a replacement part with your camera, or imagine having your IoT devices order supplies themselves, or just telling your chatbot assistant to assess and restock your inventory while you work on another project.

Those digital-assisted feats aren’t futuristic. They’re already happening — but we’ll be seeing more uses of them in procurement as the digital transformation continues to evolve, according to speakers last week at a daylong discussion called Digital Procurement: Beyond the IT Landscape.

The global consulting firms BearingPoint and West Monroe Partners held the speakers’ series Thursday in Chicago at Loyola University’s Quinlan School of Business, which hosted the event at its downtown campus.

Subjects ranged from blockchain and the internet of things (IoT) to process mining and best practices for digital implementation.

Harry Haney, Loyola’s supply chain dean for the Quinlan School, and BearingPoint Director Mark Mazur set the stage for the discussion.

Haney mentioned how the school’s ties to West Monroe Partners keeps its students in the loop with the business world and how its students focus on the latest procurement and supply chain issues — and even act as a student-based consultancy.

Bill Duffy, the director of consumer and industrial products at West Monroe Partners, led a panel discussion about how digitization is creating value, and he said one key area is data.

“You can’t teach intellectual curiosity to people, but people with that ability are vital,” Duffy said. “The big challenge is being able to tell a story from the data so you can get value from it.”

While the students will be the future professionals in the field, technology will be the driving force that shapes the possibilities for procurement. Mazur said the variety of speakers asked to attend the event represented topics that cover the sweep of digital trends happening now.

Mazur’s overview discussion focused on artificial intelligence (AI) and machine learning, big data, real-time capabilities, innovation, efficiency and “uberization,” where a business may own no assets but will provide on-demand services via mobile technology.

To successfully put these trends into use, Mazur said, businesses will have to manage the change from manual processes to digital ones by focusing on several key areas — creating transparency, simplifying processes, adding new skills and attracting talent.

“How can we create a consistent customer experience across all channels regarding delivery?” Mazur said. “How do we create more knowledge workers?”

Future is About UX

The focus on user experience also ran through the event, with Matt Blyth of SAP Ariba discussing how businesses must respond to the mobile revolution that makes users want seamless solutions.

He also sees the future of procurement technology being used in the field today. Blyth said SAP Ariba works with

a system that lets workers in the field order parts for their machinery by taking pictures of it. The image is read, associated with a part number, linked to a purchase order so the replacement part can be sent to the worksite. No keyboard needed, no office either.

“Workers can take a picture of a part and the requisition begins,” Blyth said. “It cuts down on the time to order, time to deliver and the down time of the equipment overall.”

Blyth, SAP Ariba’s vice president of procurement and business networks, said the future of UX also includes virtual assistants being imbedded in most procurement software solutions. The chatbots would be like Alexa but more conversant because of better natural language processing (NLP).

“Procurement execs can leverage this need for UX to promote procurement’s role,” he said, encouraging them to ask: "How can I drive better sourcing or invoicing?”

His answer involves more machine learning, more robotic process automation (RPA) and more digital assistance overall, with “things ordering things,” he said of IoT devices triggering orders when they sense a problem or a shortage of supplies.

With all of this tech takeover, the role of people is a concern too, but Blyth sees technology as more of a co-pilot than a replacement for workers.

"Automation is going to take the person out of the process, but it’s also going to take the robot out of the person,” he said. “So people can then be in more strategic roles. This change will lower costs and improve the value of procurement.”

The user experience when dealing with the next generation of solutions — like guided buying and smart contracts — is the key to success, he said.

“It’s important to have users happy and easily doing business with procurement,” Blyth said.

Blockchain and Procurement

A panel of blockchain experts led by David Carmen of FinTank, a tech incubator, tackled the mysteries of blockchain. When Carmen asked the audience who among them used blockchain, no one in the crowd of about 50 people raised their hand.

He and the panel were ready for that though, imparting the basics of the technology and offering some deeper insights into its use and promise. The experts included Hannah Rosenberg of the Blockchain Institute, Dan Spillane of IBM, Dmitry Tyomkin of chainworks and Luke Sully of Custody Digital Group.

They said the electronic distributed ledger is useful when you have more than four entities trying to do business together, when you need to ensure trust among all the parties and when those groups are spread out, often around the world.

“If you trust the participants in your blockchain, you can use one with less resources,” Rosenberg said. “If you don’t trust them, then you have to use a higher level of resources for that blockchain.”

The panelists described several scenarios for setting up blockchains to get suppliers using it and reaping the benefits, like tracking products, improving corporate social responsibility (CSR) and getting visibility into your suppliers, their sub-contractors and even more tiers of suppliers below them.

“When a company has blockchain, it can troubleshoot problems within minutes where it used to take days to diagnose,” Spillane said. “You don’t have to re-create the supply chain to see all the steps in the process. With blockchain, it’s already set up.”

Tyomkin said: “Companies trying to research how their problem happened, because blockchain tracks all the activity, will find that in some cases the blockchain process could’ve prevented the problem.”

When starting a blockchain, the record starts from scratch as suppliers input data and products and payments move through the supply chain. That activity will eventually give a clear picture of all transactions if everyone properly records them. But one audience member, Brad Fujii of ISM Chicago, asked how to include historical data on a company or supplier — and how do you decide how far to go back to.

Panelists said historical data itself cannot be added to a blockchain in the same way that current transactions would be entered and made actionable.

Spillane said suppler data can be “associated and that can have a historical component to serve as a baseline.”

Privacy on the blockchain also was a key concern, and Sully and Spillane said that blockchains have governance protocols that allow for a process to determine who can see what information and what information stays private.

For example, if a bunch of suppliers are competitors, they don’t want to share inside information with each other. But the blockchain can be set up so that competitors couldn’t see each others’ specific data. However, a dashboard showing something like the on-time delivery rate of a company’s suppliers could be shown to everyone on the blockchain.

Rosenberg also said blockchain will play a big role in smart contracts, an area of growth for procurement.

Digital Maturity and the Data Boom

Dietrich Pankratz, a senior manager in sourcing and procurement for BearingPoint, discussed how the consulting firm helps procurement clients implement the trends in digital transformation.

“Procurement is one of the few groups that works with all internal groups and many external groups,” he said, stressing why it’s vital to manage change and focus on strategy.

BearingPoint starts by defining where a client’s level of digital maturity is and asking where it wants to go.

He also imparted some advice on transformation (“If you change a process, also change how you manage it”) and he gave some valuable insight for managers on any project (“Great ideas can come from employees because they’re the ones using the process”).

Pankratz also touched on an issue that dovetailed with a later process mining demonstration, which really tied together many threads that ran through this speakers’ series.

It’s no surprise that the issue is data — because the use of IoT, blockchain and other digital assets are generating more data than ever.

Pankratz said businesses must ask themselves how they approach master data management (MDM) and how to make data meaningful. His advice was to clean up master data, refine how we enter data and manage the whole data process.

In an impressive display doing just that, Nina Krimpen of the paint and coating firm AkzoNobel, which is based in Amsterdam, showed how all that data can fuel process mining technology to better depict a company’s metrics.

Krimpen used the Celonis process mining tool to give an array of visual insights into what the company’s data means. On the large screen projected at the front of the room, you could see how she sliced and diced the data into number displays, dashboards and a flowchart that blossomed from a simple visual of a process into variations of that process that made the overhead screen fill with a dizzying amount of lines.

But it did depict how data has a story to tell if you’re willing to dig into it.

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