Please could you start by introducing yourself and your role?
My name is Manish Sharma, and I am the group CEO of Accenture Operations. In this role, I oversee Accenture’s comprehensive portfolio of business process services for specific business functions including finance, procurement and supply chain, marketing, and sales, as well as industry-specific services, such as banking, insurance and health services. I lead a team of over 145,000 professionals, charged with developing, selling and delivering intelligent operations to drive transformational value and productivity for clients. I am also a member of Accenture’s Global Management Committee.
Could you give me an outline of the procurement landscape when it comes to procurement intelligence, how has the industry evolved?
Formerly, procurement had a simple purpose: identify cost savings in sourcing and purchasing. While the focus is still delivering cost savings, business leaders are finding how much procurement can function as a revenue driver now. Procurement intelligence solutions enter a new era—one made possible by real-time data, predictive analytics, and new tech tools—to double down on other key levers across direct and indirect spend like inventory and consumption of goods and services to lower spend and drive value.
AI and automated technologies are among the key intelligence sources for procurement leaders seeing significant attention. Adjusted based on demand, automation technologies are important in reducing costs and rank as critical factors in the digitisation of business processes. Procurement leaders have reported impressive strides in automation with the percentage of procurement executives reporting widespread or full-scale automation in their organisation having increased five times over the past three years. Another key procurement data source is in AI and how businesses use the data coming from a specialised human-machine workforce to make decisions based on market consumption patterns while reducing the workload of their employees.
What is AI's role in driving procurement intelligence?
AI is being used in a variety of capacities today within procurement becoming more efficient, resilient, and agile. For example, Accenture helped a grocery chain using our SynOps platform to forecast inventory demand and allocation to stores more accurately. How? We forecasted demand up to eight weeks in advance with machine learning models with outcomes including a 33% productivity increase, a 15% boost in forecasting accuracy and a 30% inventory reduction.
AI not only delivers financial benefits, in addition to improved forecasting, inventory reduction and productivity, it free employees for more complex tasks requiring human ingenuity to tailor AI to current and future needs. Think of it as 360-degree value widening procurement’s sphere of influence and impact through artificial intelligence both directly (technological impact) and indirectly (human impact).
Is this the only technology or does there need to be more to realise value, could predictive analytics and automation also be key?
Artificial intelligence, predictive analytics and automation all play a role in a broader holistic procurement landscape, and all are needed to realise full value. AI, predictive analytics, and automation are all part of the same puzzle. The key ingredient behind them all are human workforces. They will be needed to tailor AI as necessary, with new data shifts requiring adjustments to predictive analytics for better efficiency overall.
For example, closed-loop spend management (CLSM) models are a valuable tool more organisations should be putting their resources behind within procurement analytics. Powered by data and AI, CLSM systemises and infuses bold ways of working across the procurement function. It makes procurement more efficient, resilient, and agile. The method is grounded in responsibility to the environment and suppliers—always aligned with business strategy. There is value for the enterprise, stakeholders, and the community—and across risk mitigation, sustainability, stakeholder experience, talent and inclusion and diversity.
How can organisations truly realise the value of intelligent technology in their transformation?
Our current research found procurement leaders believe they are lagging in operational maturity and lack what we like to call “future-readiness.” Future-readiness reflects an organisation’s ability to scale eight characteristics across their business: data, analytics, leading practices, business-technology collaboration, agile workforce, automation, stakeholder experience and AI.
However, they are aware of their challenges in achieving future readiness with 24% of procurement executives rating technology as a top challenge to growth in key areas, compared to 21% of all respondents. Procurement executives were also significantly more likely to list structure as a top challenge (25%) than the overall sample (23%). Overall, only 7% of organisations surveyed are future-ready, so how can others catch up to realise the true value of intelligent technology?
Know your ultimate goal and make big, sweeping changes to close the gap between your current procurement operations and your aspirational goal; automate AI at scale to augment human talent and foster a human + machine workforce; commit to making data-driven decisions with better, more diverse data; adopt a cloud-first infrastructure approach, and build complementary third-party ecosystems. At Accenture, we’ve already begun this process with our recent acquisition of ClearEdge bringing their solutions and expertise in information technology (IT) spend and software asset management to Accenture’s SynOps platform. Accenture now can extend insights and purchasing expertise to strengthen procurement spend management.
Is technology the answer to all challenges?
Technology is certainly part of the answer. At Accenture, we feel businesses need to look at procurement differently when it comes to technology. They can’t think incrementally to deliver value. Rather, they need to think bigger. What does that mean?
With AI, for instance, businesses use the data coming from a specialised human-machine workforce to make decisions based on market consumption patterns. This reduces the workload of their employees while finding hidden sources of revenue with employees freed up to manage other tasks for greater efficiency.
Another key data source for procurement leaders can be found in automated technologies, which are adjusted based on demand. It is an important way to reduce costs and ranks as one of the critical factors in the digitisation of business processes. Procurement leaders have reported impressive strides in automation with the percentage of procurement executives reporting widespread or full-scale automation in their organisation having increased five times over the past three years.
From a human-to-human perspective, it is just as important to build ecosystem partnerships with suppliers to break through one of the greatest barriers to operating model transformation. Suppliers can protect a company from the supplier-related risk that could damage its brand and finances, as well as from erosion of hard-won sourced benefits. Strong ecosystem partnerships can also play a key role in helping a company improve its supplier base to drive greater innovation and growth.
What are the benefits of procurement intelligence?
As we’ve outlined, the benefits of procurement intelligence are diverse and often times not as easy to see on the surface. From an efficiency standpoint, procurement intelligence through human-influenced AI and automation allow employees to streamline operations and drive revenue.
In addition to improved procurement processes for new revenue sources, improved procurement intelligence also create new opportunities for employees to learn new skills and develop a mutually beneficial relationship. More human interaction also creates more opportunities for broader ecosystem partnerships with suppliers which reduces the overall risk of operations. These are just some of the interconnected benefits offered by procurement intelligence as we’re just scratching the surface of these new innovations.