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Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
Then you better start swimmin’ or you’ll sink like a stone
For the times they are a-changin’
– Bob Dylan
Dylan penned this song in the ‘60’s in a different time and era of change. In today’s business context of digital transformation in procurement, its relevance is no less – nor is the hype about digitization far removed from reality.
In the past few decades, we’ve seen digital innovation in procurement: eProcurement, eSourcing and eInvoicing, and end-to-end platforms. All of these were hyped to be a complete revolution in the way we work. While these technologies have become valuable tools in the evolution of digital procurement, none has ever reached the value levels of end-to-end automation and digitization that were promised at that time.
‘Well, no one can answer that definitively, but I see three dynamics that together tell me ‘times are a-changin.’ One, a heightened demand from businesses for more strategic value and agility from procurement. Two, the explosion of data and information – and three, new technologies that are proving their mettle to meet these challenges.
There is no denying the truth that procurement today offers a critical and unique value proposition. With its powerful reach into, and impact on all internal business functions and external supply markets, most organizations are focusing on completely aligning and integrating procurement into their business. This concept of Total Business Alignment calls for intentionally spending time to build a deep understanding of broader business objectives, and to adapt and grow procurement capabilities to meet these objectives.
The explosion of data has had a profound impact on our personal lives and experiences – be it in our late-night Google deep dives, social media apps, or communication through texts and messages. Why on earth do I pay overage fees for my daughters’ smartphone use on gigabytes of data, when 25 years ago, when I started my career as an aeronautics engineer, I launched satellites that operated in orbit for decades with a mere fraction of that capacity?
Quite simply, we live in an era of technology prosperity. Technological capacity, especially as it applies to data and information creation, is not constrained - and we revel in it. According to IDC, 90 percent of worldwide data was created in the last two years, and unstructured data (texts, email, videos, photos, texts, posts, vlogs, etc.) is expected to account for 80 percent of all data in the next five years.
Make no mistake, this isn’t just from my daughters’ Snapchat accounts, but from the growing volume of data across the procurement ecosystem as well. Consider how procurement data alone has grown:
P2P and source-to-contract platforms are capturing and creating more digital data on purchases and projects, including operational data such as throughput and cycle time
PO and invoice line item and product / service details are expanding to include supplier catalogs enriched with detailed content, image files and videos
Contracts are increasingly created in digital form, with key metadata and contract terms codified and tracked
Category strategies and plans are covering more categories and comprise end-to-end views of category information and multi-year project portfolios
The volume of external supplier and category / market data has grown exponentially, with syndicated sources, news feeds, social media and web data
So why do we care? Simple. Such data is the lifeblood of our future digital, agile and business-responsive world. It’s a world that demands we 1) access this data, 2) capture, cleanse, classify and enrich it, and 3) connect the right data elements to the right stakeholders in our procurement ecosystem. In the future operating model, this is imperative to support key insights and decision-making and effectively deliver what business needs.
Today’s burgeoning data growth has far outpaced manual efforts to manage it. Spreadsheets and simple data visualization tools have long outlived their usefulness to do so. No organization has great data, and few organizations have access to - let alone create - all of the data that will be required to come together for a digital future. How can we build an effective roadmap for a sustained journey of digital progress? How can we leverage emerging technologies to help us get there? These are the questions to address.
You can see now where this is going. The irresistible force of growing business demands is confronting an immovable object- the accelerating mass of procurement data. Fortunately, I believe we’re now in the era where technologies have a real shot at addressing these challenges. The quality and capability of platforms to automate core source-to-contract and procure-to-pay processes is increasing. Innovative point solutions are addressing key gaps in analytics, tail spend and market intelligence. Capabilities are emerging to connect disparate data sources in the procurement ecosystem. All of these are strongly supported by RPA, machine learning (ML), natural language processing (NLP) and other AI and cognitive tools.
So yes, I am convinced that the hype around the digitization of procurement really is warranted this time. Procurement has to deliver strategic value and agility – and it can do so with the sheer proliferation of actionable data, and the availability of emerging disruptive technologies. The question in this new era of change is, where do we begin?
This is a series of blogs to answer this question. Look out for the next blog, where I will talk about how to start building your organization’s digital roadmap.
To paraphrase Dylan, it’s time to start swimmin’!
Head, Innovation Lab
Chris leads WNS’s Procurement Innovation Lab team to innovate and co-create leading procurement solutions and digital technologies that transform our clients procurement ecosystems. Chris has over 30 years of technical and business experience, and over 20 years collaborating with clients to improve their procurement programs and change how they leverage procurement through category management, source-to-contract and procurement transformation programs. Before joining WNS-Denali, Chris held management roles at FreeMarkets, Ariba, and Exostar. He is a real-life rocket scientist and holds an MS degree in Aeronautics and Astronautics from MIT as well as an MBA from Carnegie Mellon University.