TECHNOLOGY is pushing us in new ways and at a pace not seen since the birth of the Internet (way back in the 90s). Yet strategic-thinking and processes for procurement were formed well before this. So while old-school sourcing skills and values remain relevant as ever (for example, category expertise is a stable force in any company’s profitability), there’s one procurement-itch I can’t scratch enough. This is that many sourcing practices have historical roots more from the industrial age than from new eco-systems of the 21st century.
So much has been written about the disruptive effects of trends like mobile devices, the Cloud, and Big Data on business that without richer context, these buzz words inspire a yawn. But when Cisco reports that we’ve reached an inflection point: There are now more devices than people on planet earth and in ten years the ratio will likely exceed 3:1 mobile devices to human beings, things get interesting. This blog is the first in a three-part series that examines how TECHNOLOGY is influencing the procurement universe.
I recall the beginning of my career when reverse auctions and e-sourcing were cutting edge. These are now part of a traditional tool set. Automation and access to improved analytics does help us source more complex categories and realize value more quickly. So these days the technology push has me imagining how they affect the quality, utility, ubiquity, and creativity of our work as sourcing professionals.
The net effect for all seems to be greater access to information.
Remote access to information lowers costs – making it more accessible. The promise of Big Data helps us grasp what to do with all of it. Mobile devices are so useful that the lines between content creation and content consumption are blurred. We have access from the Cloud via a variety of mobile device types (laptops, tablets, smart phones, sensors, micro-sensors, and custom wearable technology). We use social media to share insights and opinions instantly. The combination has caused a shift in the way we do business and interact with each other. The magnitude of this is vaster than anything we’ve recently seen in the last couple decades.
The hybridization of technologies and practice has already developed core competencies for staple industries (energy and manufacturing) and newer companies (Coupa and Workday). Cognitive software already reaches into data that link together options and recommendations for managers. Their effectiveness improves with each new SaaS product. These are becoming requisite tool sets for any enterprise to be competitive. They could soon be part of a traditional tool set as if this is how we've always done it.
So how does this algorithmic discovery drive the procurement function? I imagine strategic sourcing decisions, vendor selection, and supplier performance management become increasingly more automated. And where ordinary documents can have a brain- even a state of awareness. The aim ultimately is to arrive at decisions more objectively and quickly. The greatest value is more time to focus on business outcomes and less on the mechanics of classic sourcing events.
Convergence of traditional sourcing with major technology trends of today is creating creating a new 21st century sourcing pro. And it’s interesting to consider how artificial intelligence and robotics fused with the dynamic traits of procurement leaders will create new and wonderful business animals. These professional varieties will adapt-to and thrive-in modern business eco-systems. Stay tuned for blog two of this series called The Rise of the Sourcing Bot and in the meantime let us know your thoughts below on this topic.
Doug Seward is the Senior Manager for Sourcing at DocuSign and a regular contributor to our Thought Leadership Blog series. His sources for this publication are Procurement Leaders, Coupa, McKinsey, and Executive Editor Jason Busch of Spend Matters. Jason points to mobile platforms as “surround strategy” in a 5 part analysis. He raises an interesting conversation that helps us yield “more from existing ERP, eProcurement and P2P investments.” Take a look and happy reading.
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