Globality Uses AI to Transform Complex Services Sourcing
The sprawling, and often poorly managed, domain of services spend in procurement has not been fully solved by the digital transformation, but as companies adopt technologies to support their efforts, they are discovering the great potential that technology can unlock.
Managing services spend requires assisting the many stakeholders who are sourcing for a variety of needs, which was discussed in Part 1 of this series, “The Digital Transformation of Services Sourcing: What It Is and Why It Matters.” To help support all of those sourcing processes, procurement professionals need a robust technology like artificial intelligence (AI), which offers unprecedented capabilities and potential to streamline the process and improve the vendor match. Part 2, “Using AI to Extend Digital Transformation to Services Procurement,” shows how AI can change procurement services, making the process more efficient and improving the overall services contracted.
To shed light on that topic, we talked to Globality, a solutions provider with an AI-based procurement platform that helps clients around the world source services.
“Digital sourcing reduces time and improves the quality of the process,” says Yuval Atsmon, Globality’s Chief Customer Officer. “For example, digital sourcing tools can evaluate individual services suppliers, then that information can be cataloged for use with future projects.”
In this Q&A, Atsmon explains the value of bringing AI to B2B sourcing and how Globality uses AI to deliver results that save global clients and service providers time and money.
Spend Matters: What problems do businesses face when buying services using traditional methods?
When most companies need external support from a service provider, such as a marketing agency or a legal firm, they normally have two options: relying on the same suppliers they already use, or running a lengthy, inefficient request for proposal process, an RFP. Since few suppliers offer the best option for every need, relying on incumbent suppliers means companies may miss out on more appropriate expertise. And, costs can be higher because the go-to provider may be less motivated to negotiate on price.
In many cases, the RFP cannot be done quickly enough to meet the business’s required timeline, resulting in a hasty process that doesn’t seriously evaluate new solutions. Even when done well, current RFP processes are expensive and delay time-to-market, which may be only barely justified by choosing a better-fit provider or getting more value.
How does digital sourcing offer better solutions for companies that need services?
Digital sourcing reduces time and improves the quality of the process. More sophisticated AI platforms like Globality’s go even further, helping buyers create individualized smart briefs by capturing all the critical project requirements upfront. These tools learn from every interaction, using the expanded library to continually make project summaries better. Buyers can add more detail at any time, resulting in better-quality outcomes that award contracts to the right suppliers. Altogether, what previously took many weeks or months can now be done in a few days.
What key performance indicators (KPIs) should companies use during and after digital transformations?
It’s difficult to generalize about the right KPIs. Companies often measure what they can easily track. Instead, what they should measure are KPIs that directly link to their broader business objectives.
Digital transformation provides companies with more accurate and granular measurements of performance and allows them to drill down into certain KPIs. For example, a company might be able to look at detailed drivers of spend versus budget, comparing those to the ROI from that same spend based on outputs. This more detailed data can help companies identify performance indicators that are precursors for the financial outcomes they want.
What does the digital sourcing of services mean to you at Globality?
We aren’t shy about our ambition to revolutionize how businesses buy and sell services. We see the enormous opportunities that exist for all B2B commerce participants, especially with complex and customized services. Our goal is to improve alignment between the clients’ needs and the work being delivered, while minimizing friction and maximizing speed in the sourcing process.
Buyers almost always know what they need, but struggle with how to achieve it. At Globality, we focus on sharply defining the buyer’s needs, using past knowledge from similar projects to support our ideas about how to fulfill them. We make sure the buyer’s intent isn’t diluted. We simplify their buying experience, identify the right service providers and guide them to the best proposals based on their intent.
Ultimately, we can eliminate the manual RFP process, remove duplication and make it easier for customers to get the best provider at the right price. Most importantly, we ensure their project requirements are met in the easiest and best way possible.
How are you using AI to enable this transformation?
AI is the core of our technology architecture, and we use it to best predict user preferences and needs. Customers see value in our platform as we guide them, using their needs and natural language, to define the requirements that service providers can easily respond to.
We quickly and easily match them with the most relevant service providers by focusing on the most pertinent credentials for a specific project. Our technology also incorporates choices and feedback from similar users and projects to improve recommendations over time. AI allows us to do analyses unlike other procurement platforms because of how briefs, proposals and assessment information are digitized.
How does this allow companies to seek out more appropriate suppliers for services?
An intelligent platform allows buyers to directly source and interact with the providers they need, removing unnecessary administrative layers that can be a challenge for larger firms. Digital sourcing platforms can help these large companies direct talent to the right projects. In some cases, smaller firms may be better suited for many projects. The Globality platform gives larger companies access and visibility to service providers of all sizes, providing more options and greater value. We believe our ability to broaden the reach of smaller firms will do wonders for economic inclusion in global B2B services, allowing more businesses and people to enjoy the benefits.
How should companies balance incumbent supplier relationships with other innovative suppliers that may fit a project better?
Digital sourcing platforms have the ability to benefit almost any service-provider organization. In the huge share of B2B services, cost is a fraction of the value at stake. Better transparency on actual performance and skills matching can be a boon for the best service providers, regardless of size, because they will be rewarded for quality or value instead of sheer scale, administrative efficiency or marketing prowess. This is already happening in many B2C areas, improving customer service and choice, benefiting the best companies of all sizes while punishing inadequate ones.
Digital sourcing isn’t about replacing incumbents with other innovative suppliers. It’s about getting the best of both types of suppliers, depending on the need. It’s about motivating and rewarding all suppliers based on the quality of their work and being able to recognize expertise at the granular level. Many incumbent suppliers are likely to up their game. They could see an increase in revenue and profit because digital sourcing eliminates wasteful effort, allowing them to deliver better work and win a larger number of contracts.
CLM EPRO P2P SOURCING05/26/2016
CLM EPRO P2P SOURCING05/26/2016