It seems that procurement teams are eagerly anticipating the arrival of 2020. Forecasts, research, webinars, and reports on “Procurement in 2020” all indicate that positive developments are on the horizon. Now, with just a few days left before the New Year, it seems like an ideal time to step back from daily operations and reflect on what (if anything) could be done differently. Will 2020 simply be another calendar year, or will it usher in meaningful changes for careers in procurement?
As the New Year approaches, some of the trends that have emerged in procurement over the past few years are reaching a point where action is required. While automation has been a major topic of discussion, only a few organizations have progressed to pilot projects. Many believe that 2020 will be the year when the discussions around automation move beyond theory and begin to materialize. However, there are some key considerations that must come first:
No matter whether you are stepping into AI, machine learning, predictive analytics, robotic process automation (RPA), or blockchain, emerging technologies are worthless without quality data to drive them. As procurement teams begin to source and collect this data, they quickly realize the current state of organizational data is often poor. Hopefully, most teams will not be discouraged by this reality but instead will push forward and become part of the solution. This approach not only reconnects us with our roots as process engineers but also provides procurement teams the opportunity to address other operational challenges that impact organizational data visibility.
Data Fragmentation
Every system in an organization generates and transfers data. While this creates large volumes of information, storing data in different formats across multiple clouds can lead to system disruptions and raise the question: whose dataset is the authoritative one? The most significant advantage of having data is the ability to gain visibility into business activities. However, when multiple versions of “truth” exist, procurement cannot synthesize supplier insights based on spend and contracts as efficiently as when data is centralized and consistent. Smart solutions built on top of data rely on comprehensive and accurate datasets. Procurement has the potential to take a leading role in consolidating organizational data into a centralized, robust repository.
Data Integrity
Even if procurement could magically consolidate all data into a single database, would everyone trust it? If decision-makers are hesitant to act on data today, aggregation alone is unlikely to increase confidence. Even simple tasks like replication require algorithms to ensure accuracy. Mohamed Aron, Founder and CEO of Cohesity, notes:
“Organizations lacking quality source data may have 10–30% redundant data, along with outdated, erroneous, or incomplete records. Most systems will be unable to function effectively or provide meaningful answers.”
The first priority for procurement is to resolve data quality issues, followed by participating in campaigns that restore confidence and trust in organizational data.
Process Fluidity
Improving the state of organizational data is impossible without interacting with existing processes and input systems. In fact, process improvement is often the primary objective of digital transformation. Deploying automation when processes are fundamentally flawed wastes time and resources. Before implementing exciting new technologies, procurement must assess and validate internal processes, leveraging influence and collaboration skills to drive human-centered improvements. Only then can technological advancements be effectively applied.
Over the past few years, we have experienced the excitement around technological automation. To turn that excitement into tangible value, organizations must deploy these systems in practice. The more complex and transformative the technological possibilities, the more important it is to build solutions on a solid foundation of high-quality data and optimized processes.
With a new year ahead, full of ideas yet to be realized, 2020 presents an ideal opportunity for procurement teams to bring these concepts to life and apply them effectively to business operations.
