I currently work as a Senior Director in the Global Network Value Organisation (NVO) within the SAP Ariba line of business of SAP. My role is to bring the latest thought leadership and insights to executives and to modernise approaches for working with customers to create impactful value assessments. As a procurement professional with over 20 years senior line management and consulting experience, I was asked to support the SAP Ariba Partner Think Tank Summit in New York City on 8 November 2017.
This blog is part of a series following the success of the SAP Ariba Partner Think Tank Summit.
The vibrancy of the city mirrored my own expectant mood while walking to SAP’s Hudson Yards offices on Manhattan’s west side. The day began with thought-provoking expert talks in the morning, followed by demos, and then the break-out design thinking sessions. I helped facilitate one of these sessions, which proved both inspirational and productive – real evidence of the ‘power of &’ with SAP Ariba team members, partners, and analysts all collaborating on a common goal.
By using the design thinking approach, our group reached a consensus that data quality and quantity were the biggest issues facing procurement today and in the future. Digitalisation and Big Data are ground-breaking themes, but without the means to access, cleanse, and analyse the data in real time, an organisation would not be able to realise the full benefits of these innovations.
Our solution: ‘The Digital Data Laundromat’ – digital ‘cleansing,’ classification, and matching of the data in real time. The laundromat transforms the data into meaningful insights for decision making. We discussed how data limits our abilities and ambitions as procurement professionals, such as spend data classification, real-time intelligence on market performance, operational risk management, procurement performance analyses, reporting and tracking of savings, etc. This focus on data is validated by an article entitled Vision 2020: The Future of Procurement that makes reference to the role of data and business intelligence in the future:
Procurement has spent the last decade looking backward in time – at money spent last year, supplier performance in the past week, month or quarter. The coming decade will bring information and models that look forward.
Depth and value of predictive information being exchanged among trading partners will grow in the coming decade as participation in networked business communities expands exponentially:
Full visibility into spend, risk, performance – will be a given in 2020. Ready access to accurate, timely, structured internal and external business intelligence will create unprecedented abilities to synthesize info in support of decision making.
The quality and depth of third-party information will continue to improve, and costs to acquire it will decline. The article also states that companies will turn increasingly to external market intelligence gleaned through digitally networked communities of suppliers, peers, and experts. Real-time intelligence will be delivered by the Web at the precise times when buying and other decisions are being made.
Back in the larger group, we presented our ideas in the ‘idea gallery.’ Later, I caught up with members of the group, and we all felt that the day had gone very well and that we had been able to produce a positive, creative outcome.
The procurement profession cannot ignore the impact of digitalisation, the need for forward-looking, predictive analytics, and the growth of the extended enterprise. The changes will have different levels of impact for CPOs and practitioners. Though there will always be different points of view on the future of procurement, I believe that we can be certain of the following:
- Automation of many of today’s basic procurement activities
- Procurement functions evolving and being reinvented as data becomes more intuitive and easier to use
- Need for a different CPO skill set in order to embrace data’s new opportunities and challenges
‘Design thinking’, when combined with creative and unconstrained ideas, can yield impactful solutions. In this instance, we arrived at a digital transformation solution which drew upon the expertise of a cross-section of subject matter experts. It aligned with published thought leadership. Readers can expect articles and points of view on digital procurement transformation.