20 Yrs Ago 3% of Knowledge Was Digitised, Today Just 3% Isn’t: Procurement’s Tipping Point

A future led by the likes of AI, robotics and 3D printing will change the workplace as we know it. What this might mean for procurement, and how we will not only survive but thrive in it, is the subject of the keynote at this year’s eWorld Procurement and Supply on March 5th.

It will be delivered by Michelle Baker, CPO for the Dutch telecommunications service provider, KPN. Accustomed to working in global organisations, she has been heading procurement at this national firm since 2017, where she is leading the transformation of the function to become data-driven and technologically aware to build a more strategic profile for the department.

Coming from the IT industry, Michelle has led global procurement teams in transformational programmes across various industries, including logistics, mining and brewing. She has witnessed a sea-change in how technology has (and will continue to) impact procurement, believing that all the changes she has seen to date (the digital conversion of many tasks and processes) have reached a point of maturity whereby, if procurement doesn’t adapt, it will risk disappearing for good.

She will be talking about how the function will be impacted by emerging tech, data, and digitalisation, and how procurement leaders, category managers, practitioners and anyone who has an accountability for procurement should start to rethink how procurement is done, and how we, as the gears and guardians of procurement, need to change if we want to protect our purpose and our function.

We talked to Michelle about her background, her role, her passion for tech, and the wisdom she will be imparting through her presentation. But first we wanted to understand why such an experienced procurement leader, from various global roles, would want to run a more national function.

She explained that KPN has been through a period of transformation itself, adapting to the modern world and new market demands. So it has had to recreate itself. We now live in a time and place where, for example, wifi, mobile, on-demand, and other technologies are regarded as communications commodities that should be available. We expect wifi to be free in cafes and hotels, we expect our mobile contract not to rise, we expect to watch what we want to watch when we want to watch it. KPN had to adapt to market trends, or face the consequences – and that is how she feels about procurement.

“What attracted me to KPN,” she said, “was this spirit of continual development, the dynamic working environment, and the way it looks to the native digital world to learn how to move forward. It is posing itself the question – what does the digital future mean for our industry, and what must we do be in it? This forward-looking, tech-embracing ideology comes from the top. The CFO for example is the ex-Finance Minister of the Netherlands, and a serial entrepreneur. He has been an inspirational leader and one of the drivers that led me to spearhead procurement’s transformation into an enhancing, strategically driven function. My goal is to get procurement to the point where it is known for more than cost savings and RFPs.”

She is convinced that in as few as 5-15 years’ time, procurement will be a “materially different beast.” So she is taking what she believes is an incredible opportunity to “recreate and repurpose” the procurement function as we know it. How she is going to do that, we won’t speculate, but it will form part of the subject matter of her presentation – which should prove to deliver some first-hand advice.

What we do know, is that she sees the future role of procurement being deeply affected by and dependent on data. It will be the lifeblood that runs through all processes. “Automation is key,” she says. “Machines will do everything faster, more efficiently and more effectively. I can see up to 70% of the traditional procurement function carried out by machines. Humans can never assimilate, calculate and compile data in the milliseconds it takes a chip to process it. Take Flight Scanner for example; a travel metasearch engine that can aggregate hundreds of flights, ticket prices, times, destinations, operators, and so on, and does the comparisons in seconds. Elimination of bias, and democratisation of data is set to change our market forces. RFPs have had their day, businesses are moving too fast for them to keep up …”

“… So we either get automated out of existence, or we get automated. My team is fully on-board with the idea that we regenerate to survive. We must continually develop and train, to understand and be an enhancement to the technology that will ultimately usurp our roles. As all category spend, everywhere, becomes digitalised, if we understand what that means for our specific roles, we can see where and how we can fit in and make a difference, and optimise that for a broader, more strategic result for the organisation. Our job is to make sure we have the skills to wield these tools, to extract and analyse their data for better decisions and better results, and remain the overseers of the technology as it operates our roles, because operate on our behalf it certainly will. But the people who understand how to interpret and put data to good use, will be the ones who have a future.”

We asked Michelle if she sees any part of the procurement role that cannot be done better by machines.  “Human judgement will always be needed,” she says. “There are some categories of spend that rely more heavily on human interactions, those that have negotiated outcomes. And human interaction is really what our whole profession is based on, relationships are fundamental to our role and no algorithm can ever replace that. This is why my team are focusing on interpersonal competencies. They are young, and I impress upon them, and to all procurement professionals of the future, the importance of honing good communication and interpersonal skills if you don’t want to be outsourced to a machine!”

Michelle will be speaking at 9.30 am at eWorld on March 5th, do come along to learn more about her attitude towards personal development, the role of data, and technology’s impact on our profession.

Register for free here.

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