In Part 1 of a 3-part series, Marcell Vollmer, chief digital officer at SAP Ariba, shares his take on where digital procurement is headed. What is the role of e-procurement in B2B e-commerce and what is the role of the chief procurement officer? Vollmer: Procurement has earned an unfair reputation of being a complicated process, but let's break it down simply here. Procurement's role in B2B e-commerce is to streamline the purchasing process and ensure that businesses get the right goods and services that meet all of their specifications, from a corporate-approved vendor, for the right price. Call this the golden triangle of procurement.
Ardent Partners' recent research report, Sourcing and Procurement: The 2016-2017 Technology and Innovation Outlook Report, chronicles the evolution of sourcing and procurement technologies over the last two decades to where they are today and poised to go tomorrow. This report, which is chock full of great insights on many advanced, distinct sourcing and procurement technologies, has spawned a series here on CPO Rising that looks in depth at each of the innovative solutions coming onto the market today and in the near future. One of the outputs of machine learning is a greater understanding of user interfacing (UI) and how to improve user experiences (UX). But machine learning, powered by master data management, Big Data, and advanced algorithms, is on the cusp of delivering even more efficiency gains and insight to the end user. As discussed in the previous installment in this series, artificial intelligence (AI) is a natural extension of machine learning and is not-so-quietly preparing to take procurement, sourcing, and supply management to the next level of performance.
During the pandemic, organizations adopted transformational sourcing and procurement practices to drive savings, speed, and agility. They may never go back. Over the last several months, IDC has hosted several virtual roundtables with sourcing and IT executives on technology sourcing and COVID-19 recovery practices. One theme that emerged is that agile sourcing practices are driving their recovery strategies. For some, the shift to agile procurement happened out of necessity. "When COVID hit, I had to accommodate new IT procurement requests by doing master agreements in less than three hours," one senior procurement executive told us.
It seems that there is always a study or analyst op-ed that warns us of the jobs that will be overtaken by artificial intelligence (AI). Oxford University predicted that nearly half of all positions will likely be automated by 2033. And perhaps, even scarier (or encouraging, depending on how you look at it), statics agree that only a fraction of these job losses will happen over the next three years – anywhere between 4%–9%. Leading strategy consultancies confirm the prediction in several studies as well. While such predictions may seem to be riddled with doom and gloom, sometimes we need to remind ourselves of the vast potential for innovation.