We recently talked with Nikesh Parekh, CEO of Suplari, to find out how companies are handling all of their spend data and learn why they need to digtialy transform. "The traditional function of procurement was, in the early days, to enforce a set of processes to prevent employees from making irresponsible or unwise spending decisions. It’s the quickest path to saving money," he said. "But today, our customers tell me that they are being asked to provide strategic value above and beyond cost savings and risk reduction. This is where digital transformation comes into play. If organizations want to move the needle beyond the tactics they’ve been employing, they need to be open to leveraging innovative technologies, such as artificial intelligence."
A handful of the first 5G enabled smartphones are being released this year, signaling the start of a new era of faster data speeds, more reliable connections and significantly lower latency for many electronic devices. The impact of 5G will be felt across a wide-reaching group of businesses and industries, creating entirely new sources of data and allowing it to be transmitted and analyzed with speed, accuracy and completeness that was simply not possible using previous generations of wireless communications technology.
The Swedish multinational telecom Ericsson has worked closely with many of the world’s leading communication service providers (CSPs) and recently released its “Realizing IoT Strategies” study, drawing on its planning, operational and strategic experience to examine the traditional strengths and weaknesses of CSPs and highlight how they are working to position themselves for the enormous opportunity that 5G technology represents.
Spend Matters welcomes this guest post from Public Spend Forum, a sister site of ours that each week helps us look at public sector procurement. This week we explore the increasing use of drones — in agriculture, construction, emergency response — and how to procure those services.
We are truly in the modern era — drones are now everywhere, no longer just tools for movie making or toys for tech-savvy teens. And “everywhere” includes their increasing use in the public sector. Between 2016 and 2017, drone bids and RFPs saw a growth of 194%. To properly cover this important topic, this article will focus on:
— What drones can be used for in the public sector
— Tips to keep in mind when procuring drones
Artificial intelligence is starting to transform the value proposition of procurement and finance technologies. But it is not just start-ups that are building new capabilities and gaining momentum. Procure-to-pay stalwarts like Basware are making significant investments in the area as well. This Spend Matters PRO brief explores where Basware’s AI investments are appearing in its invoice-to-pay and e-procurement solutions. Part 1 of this series explores Basware’s recent product enhancements, and Part 2 explores 2019 and 2020 roadmap items.
Most procurement departments would agree that introducing a category management structure is a good way to secure the best-in-class status they crave. On the tactical-to-strategic spectrum, it’s still a notch below “trusted adviser” status, but it’s several more notches removed from reactive purchasing and the three-bid-and-buy mentality. While they’ve largely got a consistent end goal, procurement departments vary wildly when it comes to progress.
Many are still hard at work introducing even a foundational level of strategy. Others are mired in damage control after trying and failing to build a more strategic procurement function. Even those exemplary departments that can call category management a next step have a lot of work ahead. Like their less advanced peers, they’ve got to change their organization’s mindset if they want to truly transform procurement. To transform the function, they’ve got to first change the way other business units perceive and engage it.
In Spend Matters’ last pair of articles for the PRO series AI in Supplier Management, we reviewed some of the exciting capabilities that you will be able to expect in tomorrow's supplier management platforms, where we define AI, for the purposes of this article, as “augmented intelligence” because, as we've stated in our AI series, there is no true AI in any enterprise technology today.
In our initial entries of the series, we discussed how the advancements in usability and computing power have made it possible for platforms to implement better and more powerful guided on-boarding mechanisms that can allow a supplier to on-board from existing profiles more quickly and efficiently than ever before. We also discussed how embedded community intelligence will help you make better supplier selections, better performance monitoring will help you keep on top of performance problems before they lead to disruptions, KPI monitoring will identify a range of issues, risk monitoring will identify risks as soon as they come to pass, and resource assignment will be automated for common project tasks.
In our follow-up entries, we indicated that each of these capabilities would be improved with automated reasoning and machine learning technologies. Profiles would be automatically maintained. Community supplier intelligence will be augmented with supplier intelligence. Relationship status will be monitored in real time across all purchases and projects. When issues arise, corrective action plans will be automatically created. When risks are identified, mitigation plans will be automatically created. When resources are needed for more critical projects, they will be re-assigned, and projects realigned, in real time.
But is this the best we can hope for?
When we extend our event horizon out further into the future, we can predict that, at some point, industry-leading supplier management platforms are going to support:
— Supplier future state predictions
— Category-based supplier rebalancing
— Supply chain rebalancing
— Real-time order rebalancing
In Part 1 of AI in Supplier Management: Tomorrow, we began our discussion of some of the AI-enabled capabilities that you can expect to find in tomorrow's supplier management platforms, where we define AI as assisted intelligence (because, as we have discussed, there is no true artificial intelligence in enterprise platforms today and there won't be tomorrow either). AI is a buzzword, not a reality. But we don't need true AI to achieve software that can radically increase our productivity. Reaching assisted intelligence will add multiples to our efficiency and effectiveness.
In our last article, we discussed how tomorrow's supplier management platforms will offer smart, automatic, supplier profile update (suggestions) — taking the headaches out of profile maintenance that results in most profiles being out of date in a supplier management system shortly after they are created; market-based supplier intelligence that is more in line and reflective with reality — and not just the experience of an anomalous customer subset; and real-time relationship monitoring that paints a relatively full picture of the relationship, not just a point-based performance picture.
So what else will tomorrow's platforms do to help you focus more on the strategic side of supplier management? Let’s look at the next three areas:
— Automated resolution plan creation, monitoring and adjustment
— Automated risk mitigation strategy identification
— Optimized real-time resource re-alignment
It’s time to check in on Public Spend Forum, our sister site, to see what’s happening in public procurement. And what we see isn’t real. Instead it’s augmented reality and virtual reality technology taking hold. AR and VR don’t seem like the best fit for public procurement, but PSF writes that the innovative technologies can play a key role in a number of areas.
The article begins with an overview of the technology, also known as extended reality (xR). It gives these definitions for AR, MR and VR:
— Augmented Reality. This is a type of software which can be run on a device (smartphone, tablet) that uses our reality and incorporates images into it.
— Mixed Reality. This is a combination of AR and VR and utilizes a handset and a real environment for a more immersive feeling than augmented reality alone.
— Virtual Reality: Instead of projecting an image into our environment, VR instead creates a whole new environment. The user wears a headset as well for a completely immersive experience and a 360-degree vision field.
PSF says that xR has many uses, from offering hospital patients a sense of being outside the facility to education to workplace training — to aiding government work.
The Institute of Supply Management’s focus is on the future, and no educational session or speech at the ISM 2019 convention in Houston exemplified that more than recognizing Megawatt winner Jasdeep Sandhu and the other “30 under 30” recipients, the top young professionals in the field of supply chain and procurement. “It’s an incredible honor. If you asked me five years ago if I’d be in this position, I wouldn’t believe it,” said Sandhu, a blockchain specialist for the pharma firm GSK who turned 27 just before the early April convention. “Honestly, what it’s done, it has inspired me so much to continue down this path."
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. 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.
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.
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.
In our last pair of Spend Matters PRO articles about AI in supplier management today, Part 1 and Part 2, we overviewed some situations where you can find AI in e-sourcing platforms today, where we define AI as “assisted intelligence” because, as we've stated in our series about AI, there is no true artificial intelligence in any enterprise technology today. In fact, there is nothing close, at least not on the open marketplace.
But when we get to the point where we have an augmented intelligence solution that can help us not only monitor supplier performance (across a community), automatically identify issues and risks, and even help us with automated resource — and asset — assignment but can also help us identify automated corrective action resolution plans, risk mitigation strategies, and real-time relationship monitoring and resource re-alignment, they start to approach augmented intelligence and become quite useful to us indeed.
In this article, we are going to discuss the AI-enabled functionality that we expect to see in the leading supply management platforms tomorrow. We will continue our pattern and start by defining what we expect to see, how it will likely work, and then give some hints of the technology platform that will underlie it.
Tomorrow, we expect that the leading supplier management platform will also have the following capabilities:
— Smart information selection and auto profile updates
— Market-based supplier intelligence
— Real-time relationship monitoring
— Automated resolution plan creation, monitoring and adjustment
— Automated risk mitigation strategy identification
— Optimized real-time resource re-alignment
Procurement organizations previously embraced complexity in tools to enable both event sourcing and category management processes. Now, the tide has turned. Solutions that are best-in-class from a user-experience perspective, but may lack advanced features (e.g., sourcing optimization, the most capability/depth for RFP/RFI/auction support, full opportunity analysis like should-cost modeling, full project management, comprehensive integrated supplier and risk management, etc.) are increasingly winning the day — sometimes even replacing solutions that offer deeper functional capability.
Simply put, this is what I term the Scout phenomena (but in all fairness to Scout, the provider, is aggressively building out capabilities in areas that it has lagged in for our SolutionMap benchmarking tool).
In the forthcoming new releases of its sourcing product, SAP Ariba has not just co-opted Scout’s playbook. It has built on it. By masking complexity and prioritizing usability not just as a primary, but the top objective, forthcoming “SAP Ariba Sourcing” releases represent a fundamental replatforming that will put casual, business and procurement users at the center of a vastly improved and consumerized UX.
In Part 2 of the Spend Matters PRO research series providing analysis of the SAP Ariba Sourcing solution, we offer insight into the new user experience as well as analysis, commentary and customer recommendations based on SAP Ariba’s planned release schedule featuring the new UI/UX. Part 1 provided insight into SAP’s relative strengths and weaknesses today (based on the Q1 2019 SolutionMap release) and shared what we learned last month at the SAP Ariba Live event on an overall roadmap basis for the sourcing product line.
