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Our Evolution to Internet of Things and what it means for Procurement

Our Evolution to Internet of Things and what it means for Procurement
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As humans, our ability to communicate with each other with precision seems to be one of the major contributors to the success of our species on this planet. We seem to be far ahead of any other species in this aspect. Communication amongst us humans has seen several turning points at different stages of our evolution. From the ancient man drawing petroglyphs on cave walls to understanding alphabets, sounds and creating languages; to the times of colonization when boundaries of the world’s map were being drawn and different cultures came into contact and were forced to communicate without a common language.

Our ability to communicate efficiently is majorly restricted to our own species. Though, there seems to be a new player in this game, one we ourselves have created – Machines. With the internet, this new “species” of machines can now communicate.

Species: Machines

Common Name: “Things”

Language: Code

Medium of Communication: Internet

The technology with which they communicate is called the Internet of Things (IoT). Gartner has defined this as: “Internet of Things (IoT) is the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.”

Scope of IoT

The scope of IoT is diverse. Smart homes that can make home life more efficient, where your laundry bag is communicating with your washing machine and you back garden door knows when it is time for the dog to step out. Smart transportation which can already be seen with Uber’s geotagging that gives you the exact location of your incoming cab and when you can leave your home. Smart cities where traffic, utilities, roadways, metro systems are all communicating to make cities run efficiently and make lives easier. This list would go on and we are yet to draw the limitations and boundaries of the scope of IoT, though important to note here is that this scope depends greatly on infrastructure we build for it.

What about Smart Procurement?

IOT technology finds several applications in the procurement function. Weight operated warehouse devices can intimate the team when stocks are running low. When such technology begins to communicate with the business sales, it can begin to predict stock requirements for future. With some machine learning sprinkled into this picture, the technology can tell exactly by when should a new purchase request be raised to keep the business running smooth. It becomes very convenient for a procurement professional to look at large data sets and deduce patterns and insights that he or she couldn’t previously and make business operations more efficient.

Challenges with IoT

Like any new technology, IoT brings its own set of challenges to the table. Procurement teams will need to evolve and design processes to synthesize the large amounts of data coming in from IoT devices. Procurement professionals will also need to add “data analytics” to their skill set and we can expect their roles to morph into a more strategic one. This will require a smooth integration with other business units as the full potential of IoT can only be realized when it is viewed from a business perspective.


Let’s be honest, IoT has not really reached the stage where we see a full integration into business operations. This transformation is still a while in the future. What we can expect is new “things” that are available in the market to have the ability to communicate via the internet with different application and send out data regarding its performance. As the infrastructure for IoT technology to thrive grows and becomes affordable, we will begin to see the reality of the advantage of IoT in procurement. Though the only way for a procurement team to prepare for it is to be ready to deal with big data analytics.

There is a new form of communication coming our way, after years of communicating with our own species we are now moving to communicate with “things” around us. How much this new technology makes our lives easier and efficient depends on how well we understand the new language and use it to our advantage.

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