The effect of emerging technology on procurement
Hugo Evans, Vice President at A.T. Kearney, recently joined Vikas Shah, our SVP of Growth & Business Development, and Marisa Pierron, our Customer Success Manager, for a webinar about how emerging technology is impacting procurement.
One of the key points they touched on during their discussion was specific areas of procurement organizations that will be affected by emerging technology. Want to find out more? Watch this clip or read the transcript below, and make sure you check out the full webinar here!
VIKAS: What specific areas of procurement organizations do you think will be affected by implementing emerging technology today?
HUGO: If you can actually start to plug in technology where it has been promised and not delivered, I think it is going to make procurement organizations do what they’re supposed to do.
Think about a category manager that has to generate a report and do insights for forward planning. It turns into a gigantic three-week effort to consolidate data through Excel, running around, and pulling data from systems. And the next thing you know, it took three weeks.
That data and those insights should be readily available, or you should be able to plug a data scientist in and get those insights instantaneously. I don’t mean literally instantaneously, but without much effort at all. And so, if you do that, then that category manager can actually do what you want them to do, which is to understand the supply market, do more advanced SRM (or even basic SRM).
A lot of technology is impacting all the way down to the day-to-day users (the buyers), by improving their workflow, making it more efficient, and giving them better insights so they can do their job better.
As you look at it, procurement organizations have become this de-facto, quasi-budget control – like, “you can’t do this, you can’t do that, you need to follow this process” – where, in reality, their time is better spent. So, all the automation and the integration, all these things that are coming are actually helping procurement to do what they should be doing. It’s not so much doom and gloom.
VIKAS: Is it fair to say the impact is going to be seen across talent, technology, solutions and other parts of the organization?
HUGO: Yes, absolutely. I’ll just make one other point, and this relates to getting procurement on the CEO’s agenda. Right now, if you are a budget control gatekeeper to getting things procured, you’re seen as a back office, you’re useless. I don’t mean that pejoratively, but what value are you adding?
But if you actually think about the future for any organization, using your supply and demand power and figuring out your competitive advantage in the market – that’s what procurement can do. So ultimately, it’s going from this cost control function to real value creation.
VIKAS: Marisa, you’ve spent a lot of time with our customers. How do you see specific areas of our customers’ organizations get impacted by emerging technologies?
MARISA: Hugo focused a lot on the executive side and the management side, but we’re seeing that a lot of technology is impacting all the way down to the day-to-day users (the buyers), by improving their workflow, making it more efficient, and giving them better insights so they can do their job better. And when you give them better insights, they’re in turn creating better efficiencies, which then roll all the way up to the management layer. So, then the C-level suite, directors, and VPs can make better decisions and actions off of that.
So, it is impacting the full gamut of the procurement organization, not just individual little sections like it used to be, and like a lot of the legacy ERP systems do. They only impact certain segments. They don’t really work well together. But what we’re finding with a lot of the new technologies is that’s not the case anymore. It really is changing the game. It’s making all of our clients’ organizations flow better and they’re not working in silos anymore. They’re working together, and that’s creating a better ecosystem in the procurement organization in general.