The future of procurement in the coronavirus era is uncertain. The recent coronavirus pandemic and subsequent work from home (WFH) routine have motivated many experts around the globe to come up with original content in their domain of expertise.
I recently found an excellent content piece on Chartered Institute of Procurement and Supply Chain (CIPS) Procurement Master Talk Series hosted by Mr. Lalit Dhamija, a global procurement and supply chain trainer and practitioner.
In this week’s episode of CIPS Procurement Masters Talk Series, Mr. Lalit hosted Mr. Dixit Jasani, Senior Vice President, Sales and Global Marketing, Zycus. It was refreshing to listen about the procurement transformation roadmap set out by Zycus for procurement fraternity of Middle East and across the globe and how Zycus is trying to do things differently by making significant investments in Research and Development (R&D) to bring the latest, best-in-class procurement technology to its customer base in the Middle East and around the world.
The procurement technology landscape has seen drastic changes over the past decade. The transition that started with early ERP days reached to a stage where multiple vendors were offering various diverse solutions. Currently the market is dominated by vendors, offering cloud-based fully integrated Source to Pay (S2P) suite which is way more secure than the on-premise solutions.
Talking about this transition, Mr. Dixit mentioned, ” The reason for this growth is the availability of comprehensive, highly configurable S2P platforms. Due to this, the time taken for businesses to realize the benefits of automation has drastically reduced. Hence, we don’t have to wait for a high level of customization, and everything is very work flow-driven.
The new generation of cloud-based procurement technology has made almost 100% paper-less procurement and supply chain processes a reality. Most importantly, it has given organizations the ability to remotely enable buyers and suppliers to transact efficiently on a 24/7 basis“.
There is always a mention of AI and how it is going to shape up the procurement technology landscape. As a result, it happens whenever there is a discussion about procurement in the coming decade.
However, when it comes to delivering technology, reality doesn’t meet expectations. Dispelling the notion that AI in procurement is a discussion for the future, Mr. Dixit highlighted, ” When everyone believed that AI in procurement is just a thought, we have made it a reality.
Leveraging its historical association with AI and powered by 500+ strong R&D workforce, Zycus has successfully deployed AI-powered BOTs under the umbrella brand Merlin AI Suite to tackle two of the most complex areas related to procurement, Invoice Management, and Contract Management“.
Talking about how he envisions changes in the procurement function in the post-COVID-19 world and does AI has the capability to bring about significant changes in the way procurement processes are performed, Mr. Dixit mentioned,
“As soon as the coronavirus pandemic started, legal and procurement teams from our clients asked for intelligent ways to identify Force Majeure clauses from thousands of contracts in their repository. Therefore, within two weeks, we were able to offer AI-powered Force Majeure BOT.
The BOT rapidly scans through contracts and flag the organization from associated risks. The significant achievement here is that the same task used to take 2-4 weeks with substantial human intervention for large procurement organizations. One can now complete this task within a few hours with the help of BOTs“.
The coronavirus pandemic will indeed force the organizations to move toward strategic procurement. Hence, there will be an increased focus on cost reduction and efficient spend management driven by strategic sourcing.
The industry is going to see an increase in demand for a cloud-based contract lifecycle management (CLM) that can automatically identify force Majeure clauses in thousands of contracts in a stipulated time frame to safeguard the organization from associated risks.
Organizations are focusing more on a solution that enhances their ability to identify risks associated with suppliers in advance. Besides, it should be on a real-time basis geographically to take mitigating measures and avoid unfavorable business impacts. But most importantly, the future of procurement will be driven by cloud-based solutions. These solutions enable businesses to run their operation remotely in a smooth manner.
With all these discussions around the future of procurement technology, one should remember that technology only delivers results if its end users adopt it seamlessly. Any amount of money spent on automation will not be successful if the end-user has a hard time embracing technology.
Procurement leaders should focus on technology that is easy to use. Another important consideration is the implementation time for the new technology. To quickly see the business benefits, organizations need faster implementation, and that implies an alternative approach towards implementation.
“The best thing is we tell our customers don’t wait for the full implementation. If you have a simple solution like sourcing application which can get implemented in four weeks, you can start immediately running with the tool and generate savings.
With our customer Heineken, before the global rollout of the procurement solution in 62 countries in 6 months, they had already saved 10X of their investment in our solution,” said Mr. Dixit.
Procurement functions and CPOs should have a long term objective in mind while partnering with a procurement technology provider. Even if they are adopting one solution at a time, they should have a road map for a full S2P suite.
We can invite suggestions from stakeholders from finance, category management, and other functions. The choice of procurement technology directly impacts these functions. The future of procurement will be completely different when we look at the number of tools available currently.
One should focus on enabling users across the function to start adopting the tool. That is when the procurement function will able to harness the complete synergies of an integrated tool.
Mr. Dixit from Zycus had a simple suggestion “While meeting your business objective, choose a vendor that brings real automation and not just computerization of your existing processes. When you shortlist the top 3-4 vendors after the RFP process, don’t just choose the vendor based on the responses filled. You ask them to demonstrate, after the demonstration you ask them to run a rapid classroom session.
You ask your business users to play different roles and have hands-on experience of the technology solution. Invite more and more people to test the system. Testing the scenarios will help in greater adoption of the technology“.
The above excerpts are from CIPS Procurement Masters Talk Series podcast. To listen to the entire conversation, click here.