Technology

Speed to value can be elusive but it is of vital importance for any organisation.

Many procurement organisations realise the increasing pressure to maximise savings and accelerate delivery timelines. But they also want to mitigate supplier risks. Altogether, legacy manual processes and age-old frameworks compel procurement leaders to rethink their strategy.

Subhro Sen, from procure-to-pay solutions provider Zycus, discusses five core areas where digital procurement transformation augmented with artificial intelligence (AI), machine learning (ML) and robotic process automation (RPA) are driving value for organisations who are seeking fast-paced growth while trying to keep ahead of the competition.

By Sammeli Sammalkorpi, VP: Customers and Co-founder of procurement analytics solutions provider Sievo

In late 2017, MIT's Sloan Management Review (in collaboration with the Boston Consulting Group) seemed to confirm what most in procurement had long inferred. Our expectations for artificial intelligence (AI) are well out of proportion with our preparedness.

In short, we are fond of talking the talk, but almost totally unfamiliar with walking the walk. The abovementioned survey of more than 3 000 executives found that, while 85% expected AI to help "obtain or sustain a competitive advantage", less than 39% had any sort of AI strategy in place. Just one in 20 had "extensively incorporated" AI into their organisation's service offerings/day-to-day processes.

Over the last half-decade or so, technology has become increasingly more disruptive within the procurement industry. Across various offerings, you are promised the next big thing in procurement management that will help you save time and money and, ultimately, improve the way your organisation approaches the end-to-end procurement process.

However, an effective procurement solution is more than simply a means to cutting costs and improving efficiencies within an organisation - particularly in a country such as South Africa, with complex compliance and legal requirements.

By James Marland, Global Vice President, SAP Centre of Excellence for Spend Management

Welcome to the world of autonomous procurement, where procurement professionals are augmented by machines and can focus on strategic relationships which require human creativity and empathy.

Not long ago, corporate leaders thought that the greatest opportunity to leave the competition behind was to invest heavily in internal R&D and to perform all innovation activities behind closed doors until new products were mature enough and ready to be launched to market. It was believed that only those companies would be able to keep up with the pace of change and innovation.

Today, the situation is quite different. Companies have moved from inward-focused, 'closed' innovation to 'open' innovation, where valuable ideas can come from both inside as well as outside a company, encouraging the use and exchange of external ideas, technologies, knowledge, talent and resources. In part, this can be achieved through the organisation of co-creation events that are often referred to as 'hackathons'.

Matthias Gutzmann, Founder of Digital Procurement World, tells SmartProcurement more.

Becoming aware of blockchain's weak spots is an important first step towards taking full advantage of what the technology really has to offer

By Bertrand Maltaverne

From a broader point of view, development in information communication technology (ICT) has radically changed the manner in which people conduct business. Speed of communication and information exchange mean that you can offer real-time answers to customer enquiries, process transactions and convert potential leads into paying clients.

"The procurement process is no exception to these changes", says Moses Manuel, a lecturer in business, legal and development-related studies and founder of the Zerite Network.

While procurement leaders increasingly turn spend data into a competitive advantage, laggards continue to repeat painful mistakes.

You may have noticed that spend analytics is a hot topic right now. According to Deloitte's Global Chief Procurement Officer Survey 2018, the majority of CPOs across the world expect analytics to have the greatest bearing on procurement over the next two years. As a provider of spend analytics software, Sievo has been busy and has seen more interest than ever from both private and public organisations to get their spend data into shape.

As leading procurement organisations find new opportunities to turn spend data into value, others repeat the same painful mistakes. Sammeli Sammalkorpi, VP: Customers and Co-founder of procurement analytics solutions provider Sievo, highlights the top six mistakes that you should avoid making in your spend analysis projects.

The transportation and logistics industry has mountains of data available, and experts encourage carriers and their customers to embrace data-backed business decisions. Ben Goldwasser, a business development professional at Spendrix specialising in risk analysis, business administration and technology issues affecting the transportation and logistics industry, takes a brief look at using data to improve supplier decisions.

How can procurement create value beyond cost savings?

David Millington, Certified Supply Chain Professional, Next Level Purchasing Association, offers ten procurement value creation ideas in this month's SmartProcurement.

Join us at Smart Procurement World Western Cape on 9 & 10 April for a discussion on reaching true partnerships with strategic suppliers. Sanet Shepperson (Executive Head: Property and Procurement, Cell C) will facilitate a session on innovation and value creation in key supplier partnerships

Having more data generated in the last two years than in the history of mankind is an opportunity to recognise how analytics is a source of competitive advantage. Sammeli Sammalkorpi, Co-founder of procurement analytics solutions provider Sievo, shares some key points from a lecture presented at the London Business School.

Blockchain hype has spread like wildfire... "But it's time for a reality check", says Bertrand Maltaverne, Solutions Consultant, who helps organisations to digitally transform their procurement practices.

In procurement analytics, there are two clear trends:
1. Data is the new oil.
2. Big data and advanced analytics, such as machine learning, deep learning and neural networks, definitely create new opportunities.

The way we can automatically extract insights from vast amounts of data will both unearth new opportunities as well as move tasks performed by humans to machines.

As these great opportunities exist with a lot of buzz, the big question remains: how do we walk the talk? Sammeli Sammalkorpi, Co-founder of procurement analytics solutions provider Sievo, tries to answer this question.

Join us at Smart Procurement World in 2019! Our exciting theme this year is Walk the talk: high impact procurement. We will explore topics such as policy vs. impact, governance for results and delivering impact at board level.

The procurement function will fall behind and suffer a wider skills gap if organisations do not proactively pilot the Internet of Things (IoT) technology, writes Supply Management's Su-San Sit.

To move your procurement organisation to the next level, it pays to learn from the masters...

New research conducted by Accenture Strategy shows that a small group of procurement masters - defined as the top 10% of procurement organisations in terms of performance - are delivering a 15:1 return on investment (ROI) to their organisations. This tangibly impacts the bottom line in a way that makes CEOs take note.

"Other companies can learn a lot from these masters", says Accenture Strategy's Kevin Doran, Managing Director: Global Procurement Practice Lead.

The frequent use of 30-day accounts by South Africa's public and private sectors could soon come to an end, with new solutions providing corporate and government entities with a much-improved alternative.

Although 30-day accounts are still widely used by the travel industry, these accounts are an unnecessary burden on Travel Management Companies (TMCs) whom are left to forward-fund clients' travel requirements. This creates cashflow challenges for TMCs.

A panel discussion at the recent Global Business Travel Association Conference has helped to identify many alternatives to the 30-day account, including lodge cards, prepaid cards and single-use virtual cards.

Privesan Naidoo, Head of Nedbank Corporate Card Issuing and American Express Merchants (providing cards and payment solutions for travel, entertainment and procurement) unpacks some of the alternatives in this month's SmartProcurement.

As procurement professionals, what do you think your suppliers think of you - and do you care?

Do they see you as a hard-edged negotiator who wants to strike the best deal, based on price alone? Or do they see you as relationship-driven, keen to create more visibility within the business and developing inter-dependent relationships with your supply base?

Hopefully you want to be seen as the latter, but are the systems and tools you have in place sometimes working against you? Asks Gary Noble, joint managing director of 1st Executive, an international procurement and supply chain recruiter.

Procurement has a key role to play in driving business efficiency in the Fourth Industrial Revolution. To maximise its impact, research points to the fact that investing in the skills of people, especially leadership skills, will be just as important as keeping up with advances in technology. Kumeshnee West, Director: Executive Education at the UCT Graduate School of Business, and a panellist at the recent Smart Procurement World Indaba, unpacks this topic in this month's SmartProcurement.