Technologies that Impact Procurement Claritum
Technologies that Impact Procurement Claritum

Contents

1Introduction

There are a lot of articles around on what Procurement needs to do; how Procurement needs to change; and how technology will fundamentally change Procurement. Rather than repeat these and try to tell you what you already know, that change is a good thing if it produces better results. This article summarises, as a table, technology areas that impact on Procurement that you might need to investigate.

Note: technology that is used to create products or packaging or logistically move products and the innovations surrounding these domains (such as automated vehicle technology, drones, robotics, Auto ID and additive manufacturing) are not included in this table.

If the technologies in this table are not enough for you, and you want to reach out further, then I suggest you explore the impacts associated with Quantum Computing, Quantum Key Distribution and the Quantum Internet. I personally love exploring these technologies, as it takes me back to my Theoretical Physics degree – I knew it would come in useful one day!

2Technologies and Procurement Table

TECHNOLOGY

DESCRIPTION

IMPACT DOMAIN

Machine Learning, Cognitive Analytics

What the industry often terms as Artificial Intelligence. This is the domain of analytics and prediction. There is a significant element of human input to this “intelligence” through programming, expert knowledge entry and algorithm development. Using algorithms, relying on patterns and inference. Note: automated machine learning techniques can reduce the expert entry component in some applications.

Data analytics to highlight specific issues or opportunities

Predicting outcomes

Supply chain alternative routing or sourcing

Automated interactions with suppliers and customers (internal or external)

Augmented Intelligence for Procurement professionals

Audit Trails

Risk Management

Chatbots

Chatbots and conversational bots. Typically seen through Alexa technologies of this world and automated web help agents. A combination of natural language processing and machine learning.

Automated interactions with suppliers and customers (internal or external)

Voice control of systems

Virtual Procurement Agents

Artificial Intelligence

Probably the most hyped and misused term!

AI relates to a machine that exhibits characteristics of intelligence. The goal of AI is to simulate natural intelligence to solve complex problems.  It is often also used in context of learning and problem-solving. This table separated this second category of learning and problem solving out into Machine Learning.

Knowledge absorption, interpretation of facts and taking actions independent of human programming or input. Not just learning patterns, but actually intelligently working things out. A good analogy to get the difference between Machine learning and AI would be in buying door handles: having been involved in the purchase of a levered door handle AI would be able to work out that a catch is solving a similar problem of keeping a door closed. Whereas with Machine learning you would have to introduce the catch data and information that there is a link to a levered door handle. ML would not be able to make such a “reasoned” comparison of function.

Blockchain

Blockchain is a distributed, decentralized, ledger. A transaction record keeper and digital signing technology. Effectively recording transactions between parties in a verifiable and permanent way.

Trusted Supply chain

End to end transparency of supply

Contract management

Governance

Audit Trails

Risk management

Note: worth checking out the latest concerns on privacy associated with this technology. A permanent record means private data entered cannot be removed

Procurement Process Automation

Yes, process automation is still changing and evolving. Plus you need to consider legacy technologies – look up “technical debt” – in context of your automation. This category is linked to other technologies in this table, however we have separated it out as a process centric application of these technologies.

All areas of Procurement

Governance

Audit Trails

Risk management

Collaborative Software Tools

These tools allow individuals to act within groups on collaborative projects. For larger scale Procurement activity these collaborative activities are essential.

Expert Networks allow individual procurement specialists to contribute in sourcing and procurement processes in a distributed and ‘virtually’ organised way. Even to the extent of creating temporary, distributed teams for specific projects.

IoT (Internet of Things)

The second most hyped technology term. IoT relates to the inclusion of inanimate objects into the communications world and enabling interactions between these inanimate objects, with or without human interaction. If every object is capable of some level of communication, then the potential applications explode.

Supply chain

Source tracking (Provenance)

Financial transactions

Asset Tracking

IIoT (Industrial Internet of Things)

Use of networked smart sensors and actuators to enhance manufacturing and industrial processes. Note: this one has been included, because of its link to IoT. Though it fits more within technologies i stated I would exclude at the beginning of this article.

Manufacturing / production

Industrial Processes

5G and whatever they come up with next (6G perhaps?)

Mobile technology offering a faster/lower latency more connected world. 

Supply chain

Mobility of the workforce (high bandwidth, low delay, anywhere)

Note: there are many industry specific impacts of this technology that may be relevant specifically to Procurement within your  industry.

VR (Virtual Reality)

As it says on the tin. A virtual world within which you can carry out daily functions, interactions and experiences without leaving your desk.

How people buy

Users interface with systems 

Supply chain modelling 

Manufacturing / Production process Modelling

AR (Augmented Reality)

Augmenting content (or a virtual environment) onto the real world. A world that is displayed in context of the real world. For example, your mobile device providing graphical information on an object that you point the device towards.

How people buy

Interaction with systems (for example assisting buyers with Augmented information)

Goods receiving

Supply Chain

 

Visualisation

Effectively how information is presented, relevant to the user need

Analytics

Management Information

Citizen Development Tools

Business users developing their own applications using simple to use build environments. This may impact predominantly the user interface experience to the applications they use. However, the trend is to allow users to build their own applications that combine with other applications.

How Procurement professionals get their job done – building an environment that works for them

Intelligent Apps

Apps that adapt to context. Apps that continually adapt through learning to improve their output. Apps that predict a users behaviour and deliver personalised and actionable suggestions.

Procurement systems generally

Big Data / Data Mining

Extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations. The mining aspect looking for these patterns.

Accessing and analysing large Procurement data sets (linked to the Machine Learning domain)

Process Mining

Analysis of Procurement systems and processes (linked to Machine Learning domain)

Procurement generally in context of processes and systems

Geospatial Visualisation
Visualising geospatial data helps us understand how different information relates to a specific geographical location. Providing a visual representation of this information in relation to location.
 
 

Supply chain

Sourcing

Visualisation of Risk by location

Cloud and SaaS(Software as a Service)

Provision of software applications from the cloud. Effectively providing access from anywhere and on demand computational resources.

All areas of Procurement are impacted

Cyber technology. Information security

Making sensitive systems and data secure from external (and also internal) “illegal” access. 

Security of data

Privacy

Risk management

Gamification

Essentially making the user experience of the digital environment behave more like a game

How people buy

How people interact with digital systems

Reengineering technology

In this context we are talking about software tools that help with fundamental organisation and process changes. Modelling behaviours of a system.

Procurement processes in all aspects

Computers

When looking at technology this domain cannot be ignored . Look at all the advances there have been in user interfacing (using many of the technologies mentioned in this table) Plus, processing speeds, in memory data, mobility and accessibility.

Procurement generally in terms of tools available and speed with which work can be completed

Accessibility

There have been many advances in assistive technologies. Take a look at https://www.apple.com/uk/accessibility/ and https://www.microsoft.com/en-us/accessibility for device related work.

Making Procurement roles available to everyone

Digital signatures

As the name suggests, the ability to securely sign something off in a digital way

Contracts

Supply Chain

Goods receiving

Invoices and payments

Order authorisations

Authentication technologies

This covers a whole range of innovations around how to authenticate a person or object. Including Block Chain (see above), image recognition, biometrics and NFC to name a few.

Payment

Supply Chain

Authorisations

System access

3Conclusion

If you think I have missed something – then let me know

Whether you are a leader in technology adoption or a follower, this table provides a reference of technology domains that you should be aware of and monitoring in terms of maturity and use. There may be no application today. This does not mean that there will not be one tomorrow!

As you explore, always keep in mind:

“Any proposed change needs to be manageable within the resources available and graspable by the people within your organisation and its wider ecosystem. However, it also must be important enough that it has a substantive positive effect on the wider organisation and/or environment.” Chris Haddock, May 2019

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