The Future of Procurement – Technology Can Drive Very Rapid Change, Just Look At Pubs

We’ve had some very good articles already as part of our “Future of Procurement” summer topic.

We’d love some more, and it would be great for example to hear someone arguing that we’re all getting over-excited by the possibilities, and that maybe nothing much will really change …

But so far, our commentators, and indeed the CIPS Future of Procurement report that we reviewed here, are all agreed on one thing – that the next wave of technology innovation, around artificial intelligence and machine learning in particular, is going to significantly change the whole nature of what we currently see as corporate procurement. in our day to day lives

The pace of that change is open to debate, but one thing is clear – sometimes when change comes, it happens more dramatically than we expect. For instance, we’d argue that we are seeing a huge inflexion point right now, without realising it.

In the last six months or so, pub life has changed dramatically, particularly in cities like London. Why? Because of contactless payment. In the post-work,  5 to 6pm rush in City pubs, well over half the clients I would estimate now pay with contactless cards. Which means the bar person tells them the amount owed, activates the terminal… and then basically moves onto the next person to be served, keeping just half an eye (or ear) open to see that the transaction has gone through.

This is a far bigger change than when credit or debit cards started to be used for retail transactions. The time taken to handle a card transaction was if anything more than was needed to take a physical tenner and work out the change, take it from the till and hand it to the punter who had bought a £4.65 pint.

Now it is “that’s £4.65 mate”, press a button and it’s done. This must have reduced workload by a significant double-digit percentage amount in a busy bar. That is bad news for employment of course, although maybe staff will be re-allocated to higher value tasks - that’s our hope as procurement tasks also increasingly get automated. But maybe not – maybe Wetherspoons will just reduce headcount a little and save some money.

That’s a different point really and we will come back to it. But the main learning is that this move to contactless took many of us by surprise somewhat. I had personally never used it until a few months ago, when I had no change for the bus to Farnborough station and the driver said “use contactless”!  Now… all the time. My car park at Farnborough station. On the buses or tube. In the pub, certainly.

So just bear in mind this point. When technologically driven change really does bring clear user advantage, it can be surprising just how quickly it gets traction.  The same does and will apply in procurement.

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Voices (3)

  1. Paul Howard:

    As you know Peter, we caught up in London in June last year during my brief business trip back to the UK after 2 years in NZ. I remember clearly how frustrated I became when I was there about how difficult it was to pay by ‘contactless’. That was because of what I had become accustomed to here. NZ (and Australia) were the first places in the world to have both chip and PIN and ‘contactless’ which is called ‘Paywave’ here – i.e. you wave your card and its paid – much snappier name if you ask me!

    As a result, the use of Paywave both here and in Australia has evolved so much that it’s unusual to pay by any other means for anything, right down to a $4.50 cup of coffee, the only exception being where retailers choose not to have the ‘Paywave’ functionality. In the supermarket now, I can even place my card on the reader, and even if it exceeds the $80 threshold, the machine doesn’t need me to insert my card, it just asks me for my PIN and the transaction is completed.

    Needless to say, pretty much all pubs have ‘Paywave’ and I’ve observed that pubs now have staff that whilst collecting glasses also ask if you need another drink if they spot that you’re getting low (the more higher value tasks you mention?), this means that one of your party doesn’t need to get up from your table, to stand for 15 minutes (or more!) at a packed bar jostling for attention whilst missing conversation with your friends, as the drinks are now brought to you from a member of the bar staff armed with a portable Paywave terminal – tap and you’re done! I reckon it also means that they are able to sell more drinks, reduces stress on the bar staff and customers,and gives a reason to stay in the establishment longer – how may times have you been to a pub, taken one look at the 4 deep queue at the bar and shuffled off to the next one in the vain hope it won’t be as bad?

    Kiwi’s and Aussies laugh at how far behind them the rest of the world seem to be around use of banking technology. Take comfort though, the US is even worse!!

    1. Peter Smith:

      Thanks Paul and I love the idea of the roving bar staff! spot on, i have definitely left bars – or given up on getting another drink at gigs – because of the queues. You would have enjoyed the Great British Beer Festival last night at Olympia too – huge choice of of beer of course , along with some heavy hair-metal (?!) Although many of the patrons were using their CAMRA pre-purchased beer vouchers rather than contactless… but I should say the attendance was a little younger and more diverse than say five years ago, slightly lower percentage of beards, humorous T-Shirts and “pregnant man” bellies…

  2. Mr Grumpy:

    I guess the other element Peter is tips must be down too. I know in some places Gratuity is included in the prices or you can add it when paying, however there is no visibility that it is passed down the line. I always felt with tipping a waitress or a pub wasn’t just down to the food or drink element, but also the experience and customer service. Even Taxis now you can pay by card. Whilst the contactless and even the chip and pin when it started has brought an insurmountable amount of convenience to the modern consumer, like with any technological advance which limits human intervention or interaction we lose the human touch. I feel there is some intrinsic value that is lost and incentivisation is all but gone. We need to be more romantic.

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