Gone are the days when we used to sign off on contracts with the flourish of a pen. Advancements in technology have allowed us to automate many of the old tasks, allowing us to focus on bigger, more meaningful strategic initiatives. Now, we’re digitally connected to suppliers around the world, have low-cost computing available to use, and can purchase smart sensors, software solutions, and security systems that will improve our operations. Yet the question remains: where do we go from here?
As we find digital solutions to automate routine work, procurement is stepping into a new role: that of strategic leader and advisor. ‘[You’re] more of a business consultant, working with the business to try to intelligently source very specific needs’, said Joshua King, VP and CPO at American Water Company. Added JAGGAER: ‘The best leaders prepare their teams for the challenges they’ll face tomorrow’. One such challenge is researching, understanding, and integrating new technology into your procurement system.
According to Deloitte, procurement tech can be separated into three types: core, maturing and emerging. Core technology has been part of the procurement repertoire for a while now, such as spend analytics, contract management, and e-Invoicing. You’ve likely already added some of these bits and bobs. But where many can improve is the maturing capabilities or technologies that are just joining the scene.
Maturing capabilities are now cheaper to implement and critical to staying competitive. Consider
crowdsourcing, which monitors trends that can affect supplier performance; 3D printing, which provides quick prototypes or fill-ins of direct material parts; intelligent content extraction, which can gather data from contract documents. Also in this boat are robotics, predictive analytics, and machine learning.
Finally, emerging technologies are those that are hard to use now but will impact the next decade of procurement: blockchain, sensors and wearables, cyber tracking, and virtual reality. Even if you have to spend your budget on core technology right now, you should keep these technologies in the back of your mind. Large multinationals will start to use them first, and many software firms will likely offer these up as a service in the next ten years.
Improving Your Systems
You don’t have to implement every bit of new tech all at once. If you slowly start to talk to your team members in accounts, management, and IT, you can determine where your team can afford to invest in automation and digitalisation. It all starts small—choose one or two changes that will make life easier for your team, such as using intelligent extraction to read and record your contract PDFs and track how they improve operations.
After all, it’s much easier to approach higher management or your team members with data and proven results. Breathe; start small; prioritise projects that will allow your team to focus on more strategic procurement. And remember: you’re in procurement for the long term.