From our cars to our homes to our computers, new and innovative technologies are changing the way we do almost everything. That change is coming to procurement and the impact will be extraordinary.
- Imagine a world where changes in supplier pricing are instantly captured in your own pricing
- Imagine a world where smart analytics are used to predict future pricing and avoid supply risk
- Imagine a world where every internal need is quickly matched to a purchase order that optimizes value
- Imagine a world where procurement staffers operate seamlessly from any location or time zone
That world is closer than you think!
So began the intro to a recent webinar I delivered (click here to listen to the archived webinar) that was hosted by Ardent Partners and sponsored by GEP.
Pretty cool stuff, right?
If you have a spare hour some time over the next few weeks, I think you will enjoy listening to the archived webinar, we received some of the best feedback that I can ever remember for a webinar.
The topic (Future technologies) was chosen by the webinar (and site) sponsor, GEP, a company that has quietly assembled a robust suite of tools and services and placed an innovative solution roadmap high on its corporate agenda. If you’re less familiar with GEP, they are worth a look.
Anyway, I thought it would be interesting to share a couple (2 of 5) of the disruptive technologies that Ardent identified in the webinar as well as some context as to why it is important for procurement leaders to demand innovation from their technology providers.
Rise of the Machines
They say success breeds success, but for leading Chief Procurement Officers, success breeds greater expectations. When you thrive, when you hit your numbers year in and year out, after a while, hitting your numbers draws no accolades – there are no kudos for the top performers, they’re just doing what’s expected. And now, the enterprise wants even more.
Leading Chief Procurement Officers respond to that challenge which ultimately places more pressure on their procurement departments to challenge the status quo, push the norms, and take more progressive approaches to solve common problems. Finding better solutions to today’s problems is great, it’s what needs to be done; but, as procurement organizations continue to advance and evolve, a new set of problems (more advanced problems) will arise – this is exactly why new technologies will be needed.
If top performing procurement organizations are just scratching the surface of the value that they will one day deliver [Sidebar: I absolutely believe this to be true], new technologies will be needed. As such, leading procurement organizations should be tracking technology trends and innovation as it will fall to them to push their solution providers to deliver more innovation faster.
That brings us to my list of disruptive technologies – please note I am taking a more ‘futuristic’ approach than a pragmatic one.
Disruptive Technology #1: Search-based Spend Analysis
Imagine a time in the future when the most advanced search capabilities can be applied to back-end transactional data. Search will be powerful enough to identify all of the right pieces of spend data, aggregate them and transform them, using the context of prior searches and the user profile into something that is usable, like a series of prepackaged reports or reports that others have found useful.
This search capability will not simply serve as a fixture atop of one of today’s spend dashboards making it easier to slice and dice date. No, this technology will bypass the need for data loads and data standardization. Search-based spend analysis will only need to be pointed at the databases that contain the line-item spend data. Type in a category or a supplier name or a cost center or a project and the results appear.
Search engines today are among the most advanced and powerful technologies around, able to process millions of pages instantly and deliver what we want. Build in an enhanced spend data search algorithm, load in an enterprise-specific category structure, link to a cleansing agent (third-party data set), and then leverage a massive index that is built upon the entire “spend search” history to help the tool instantly organize, cleanse, classify, and present spend data that is based upon keyword logic and an ability to reach into numerous systems simultaneously.
Is this far-fetched? Well, I don’t think we will see this by Q4 ’13, but the foundation exists today. Imagine…..
Disruptive Technology #2: Procurement Apps
For B2B solutions to work at the large enterprise level, their basic functionality must be deep enough to manage a desired process well and general enough that they are applicable to a sizable market. This is particularly true of cloud-based solutions where heavy customization is not possible. There is broad consensus that B2B solutions are more cumbersome and less usable than B2C solutions. As such, most B2B solution providers are focused on making their solutions more similar to B2C solutions and websites. If Amazon provides the world’s best shopping experience, then Amazon becomes the logical target for eProcurement providers – make solutions that are ‘amazon-like’ and more ‘user-friendly.’ It makes sense…..or does it? Are they shooting at the wrong target. Will they begin to deliver a true B2C experience only to see that their market has moved?
There’s been a clear shift in the world of personal computing from computers to smart devices – tablets and smart phones. Won’t a similar shift eventually happen in the workplace? Maybe not by 2015, but it seems inevitable.
If you believe it is inevitable, then it should follow that instead of installing or subscribing to enterprise software that is accessed and used on a desktop, procurement pros will eventually utilize ‘supply management apps’ to drive the source-to-settle process.
Consider the implications of a shift from today’s enterprise software to an eSourcing or eProcurement app. Think about the transformation in technology that must occur for these processes to be managed by an app. If nothing else, a shift to apps will force providers to brutally simplify their solutions. Every supply management solution provider talks about ease of use. A procurement department using smart devices and procurement apps guarantees it.
It’s an exciting time to be working in procurement and it’s a very exciting time to be working in the procurement technology space, the next wave of disruptive technologies will soon be upon us – Rise of the Machines!
