A recent survey by the Institute for Supply Management asked respondents a simple question: “Have you heard of RPA?” More than 60% of the 432 respondents said no.
Robotic process automation (RPA) is a technology that helps automate repetitive tasks on a computer. Think data entry or moving files from one place to another — processes that don’t change and have a clear path that can be programmed for a computer to follow.
But why should people in supply chain care about it? It’s about resources, argued James Fleming, the program manager of certification at the Institute for Supply Management at the organization’s annual conference in Houston Monday. Currently, across industries, about 1.8% of a company’s employees are dedicated to supply management and that percentage is still dropping, Fleming noted.
“If we thought we were going to get more people — we won’t,” he said. “If we would like to work more hours, they won’t let us. And I think a lot of people are really starting to grab onto this concept of ‘let’s find ways to really take the transactional work out of it, automate it, and take that resource base we have and really start to put it into a strategic focus.'”
While many respondents had not heard of the term RPA, a majority said they were looking to or were already in the process of deploying some sort of automation through AI/RPA.
The biggest challenges for companies that have deployed automation technology have been the number of IT resources required, as well as a lack of technical expertise and flexibility in the bots they have used. But the advantages are improved workflow, more productivity and time for other work.
A lot of early adopters are currently using the technology for things like automated data entry or classification.
The lowest hanging fruit is where we have data that we’re entering or we’re pushing and pulling data from one system to another. Those are the best initial use cases for a lot of this technology
The longer-term goals for companies implementing these technologies will likely shift from these low-hanging fruit, RPA projects, to more cognitive, AI-type projects. Cognitive implementations don’t follow a set of instructions and instead require an AI-system to make decisions based on historical data and what it sees in a given input — this can be a bigger lift for a company to put into practice
Despite the heavier lift, having more time for high-level thinking and tasks is often the goal. Fleming suggested that if a company doesn’t believe they have data that would allow them to take advantage of these technologies then they might want to think twice.
“If you don’t think you have data go and talk to your finance folks,” he said.
Harness the power of artificial intelligence and reap a competitive advantage.
Artificial intelligence (AI) is becoming not just a curious concept, but a business asset worthy of every entrepreneur’s attention. A. is making headway in topics from behavior-based email sequences and opt-in popups to savvy messaging bots and even internal employee satisfaction analysis (IBM says they can determine with 95 percent accuracy when a person is planning to quit),
You can use AI to increase customer retention, NPS, sales close rate and pre-qualify leads. It’s hard to know where AI will be in a decade or two. But, it’s already playing a big role in many business’ daily operations. It can play a big, beneficial role in your business as well, now and well into the future. Here are four ways.
- Emotional analysis
Annette Zimmermann said in 2018, “By 2022, your personal device will know more about your emotional state than your own family.”
Emotion AI, also known as affective computing, is an iteration of AI capable of detecting human emotions and responding to those emotions accordingly. And while it’s not perfect yet, the technology is staggering. One study from the University of Ohio claims that AI is now better at detecting emotions than humans are — a remarkable feat considering our millions of years of evolution for that sorta thing.
I believe these emotionally intelligent bots transform your business operations, and this is why I have created an AI startup that is rooted in this technology.
Imagine being able to collect the emotions of a viewer watching a video online, or using email sales sequences, messaging bots, and even customer support telephone options that adapt automatically based on the users emotions. How would that change your business?
A study that analyzed 1400 case studies of top advertising campaigns over the last 30 years found that ads which triggered human emotions were about 100 percent more like to report “very large profit gains.”
What if you could trigger the right emotions at the right time?
- Customer support
Efficiency is perhaps nowhere more important than in customer support — the place where people want answers and they want them right away. And while pleasing those needy customers might seem like a business revenue afterthought, it isn’t.
According to a report by Temkin, a moderate improvement in customer experience can massively improve revenue. In the study’s own words, “Our analysis shows that NPS is strongly correlated to customers’ willingness to spend more with tech vendors, try their new products and services, forgive them after a bad experience, and act as a reference for them with prospective clients.”
I’ve used companies like Forethought, for instance, who are leading the charge into customer support AI products with their flagship answer recommendation tool, Agatha Answers. Designed as a plug-in enterprise solution that can be installed in two days and improve customer support time-to-resolution by up to 30 percent, Agatha gained widespread attention as it propelled Forethought to victory at the 2018 TechCrunch Disrupt Battlefield.
“Agatha Answers recommends answers to customer support tickets, decreases time to resolution, and increases agent productivity,” said Forethought Founder, Deon Nicholas during the TC competition. “Forethought uses AI to augment knowledge professionals.”
With 33 percent of Americans citing poor customer service experiences, reported by Business Insider, as the only motivation required to jump ship, clearly, AI has a significant role to play in the future of the customer service industry.
- Sales and lead generation
AI is making big splashes in business-to-business (B2B) sales and lead generation. Harvard Business Review reports, for instance, that businesses which use AI can reduce call time by up to 70 percent and increase number of leads by 50 percent. Additionally, one source believes that 85 percent of sales-related tasks could be outsourced to the robots by 2020 (without a loss — and likely an improvement — in close rate).
Take LeadFuze, for example. This tool is an AI-based product focused on sales improvement, and finding the right customer segment and lead. It is the first and only lead generation software tool of its kind that combines data aggregation from multiple trusted sources while offering unlimited access and complete list building automation.
I use this product and it means that we spend less time on prospect research and contact gathering and more time on actual sales conversations. Insights-focused businesses, like LeadFuze, are projected to pull in more than $1.2 billion annually by 2020. And that’s for good reason — businesses like mine benefit from that kind of automated lead-generating intelligence.
- Talent intelligence
Recruiting the right talent for your company can be a frustrating experience. Massive online search engines for jobs like Indeed or Monster can help source candidates, but many times, parsing the thousands of potential applicants is an exceptionally time-consuming task. Fortunately, AI products can offer some assistance.
According to a survey of 1,000 C-Level executives of large companies performed by Eightfold, 78 percent of surveyed businesses cite talent programs as “very important,” but only 44 percent say that the one they use is effective. Evidently, there is significant room for improvement with talent curation, something that Eightfold’s AI-based solution is intent on providing.
Called their “Talent Intelligence” platform, Eightfold’s AI product delivers a talent pipeline that reduces the time from engaged candidate to interview, curates relevant candidate lists, eliminates bias with blind screening, and drives attention with internal mobility among other features. All relevant data perspectives can be ported into a single interface, making the entire talent process much more manageable.
After all, the faster and easier you find the right people for your business, the bigger, more successful business you’ll be able to build.
THE future of the consumer sector lies in Asia, a recent financial industry report has noted.
And, while hard-travelling, free-spending Chinese consumers are expected to drive a hefty chunk of growth, the South-east Asian market is not to be sneezed at either.
Thailand’s home improvement market and Indonesia’s department stores are some consumer segments in Asean that HSBC is keeping its eye on.
The bank has put out a report on 21 consumer stocks on which it hews to “buy” calls, based on how it expects emerging markets in Asia to make up close to 35 per cent of the global economy in 2030 – up from 26 per cent now
“Research has shown that it is small and medium-sized cities in Asean that will drive future economic growth,” said consumer analyst Nigel Kiernan. “In Indonesia, for instance, some relatively smaller cities are becoming growth hot spots.
“Gresik in the East Java province of Indonesia is a case in point: The city has only about 1.2 million inhabitants but nearly 60 per cent of them are in the consuming class. Discretionary spending is 12 per cent higher there than the Indonesian urban average.”
Mr Kiernan added that “such developments are key to profit growth for companies, such as Matahari Department Stores”, where almost three-quarters of gross sales in 2018 took place outside Jakarta – mostly in medium-sized cities.
He also highlighted Thai retailer Home Product Center as a company to watch, as incomes rise and the retail sector becomes more formally organised.
“We believe both of these long-term growth engines offer attractive tailwinds to HomePro’s medium-term growth story,” said Mr Kiernan, who noted that Thailand’s economy “is directly influenced by intra-Asian trade and outbound Chinese tourism”.
South-east Asia could also get a lift from companies that hail from outside the region.
HSBC analysts were bullish on Taiwan-based clothing manufacturer Eclat, which serves athleisure brands such as Under Armour and Lululemon.
“Eclat should benefit from orders shifting to South-east Asia,” they wrote, pointing to fresh management plans to expand fabric and garment capacity.
The capacity growth, they said, is probably “underpinned by the trend of orders shifting from China to South-east Asia and wallet share gains from existing customers”.
Growth goes both ways: “As US-China trade tensions heated up in H2 2018, brand customers started to look for production bases outside of China. Vietnam became one of the best destinations, given the country’s complete infrastructure and textile supply chain,” they said.
“Eclat has closed all of its China production plants in 2016 and most of its capacities are located in Vietnam and Taiwan. Regardless of the US-China trade tension, we also note that wages in China have been a substantial pressure for textile companies.”
Most mid-sized and big businesses already have a dedicated department responsible for providing a company with everything from paper to spare parts for production line repairs. Why would we offer to involve other employees in the procurement process?
Let us explain how you may benefit from this approach, what the risks are and how they can be mitigated.
Why involve you non-procurement employees?
When you allow non-procurement employees to take a direct part in the ordering process, here’re the gains you get:
- Enhanced efficiency of the procurement department
The procurement department frequently gets ‘attacked’ with the questions of other departments on the order status, delivery dates as well as requests to change an order, etc. Involvement of non-procurement employees can help the procurement department to avoid spending their time on such low-value repeating tasks. And even in case an order requires approval from the procurement staff, doing so you decrease the time spent on order processing. It spares procurement employees from multiple clarifications of order contents and duplication of effort as they don’t have to re-enter the info received from other departments via email or internal system to fill in the order documentation.
- Smarter purchases
When orders are made by people who need these products and services directly to use in their work, there’re more chances for smarter choices. End users are more likely to know what product model or brand will serve longer and better, won’t require costly rework, etc.
- Reduced misinterpretations and errors
Misinterpretation and errors may appear when the order info is to come through several departments before finally reaching its destination – a vendor. Moreover, the procurement staff can often have difficulty understanding the characteristics of specific goods and materials. Allowing non-procurement employees to make up orders on their own, you greatly increase the chances that their accuracy won’t be damaged and the requesters will get exactly what they expected.
- Informed vendors
Collaborative procurement allows for direct communication between non-procurement employees and suppliers, so it becomes much easier for the latter to get constant feedback from end users and understand what can be improved and how.
Fears about purchasing directly
However appealing, the idea about involving other departments in purchasing activities may provoke rather disturbing thoughts, such as:
- It can result in maverick buying
The more people are engaged in the procurement process, the easier it is to lose control over it and face violation of company guidelines and policies, budget exceeds, etc.
- It can distract other departments from their job
Employees from other departments may get distracted from their core responsibilities spending their time and effort on the extra procurement activities.
Fortunately, these are not the reason enough to abandon the idea about the benefits that the involvement of non-procurement staff can bring. There are ways to safely mitigate the associated problems with the right software choices.
How you can win with a procurement portal
One of the options worth considering is a procurement portal. A portal provides a possibility to enjoy the benefits while mitigating the relevant pain points you may face. It combines the functionality of a vendor portal and internal procurement software to allow smooth and controlled ‘extended’ procurement.
To prevent maverick buying, an eProcurement portal uses various mechanisms that ensure the centralized, manageable, and efficient purchasing process. It allows the procurement department to configure the workflows to the specific guidelines and rules of the business, thereby preventing the non-procurement staff from their violation while making orders directly, for example:
- The portal lets employees access only selected/recommended suppliers approved by the purchasing team.
- The portal allows employees to purchase only according to the agreed terms.
- The portal introduces access control with different rights for different employees, departments, and locations.
- The portal sets up an approval process for either all purchases or specific situations (e.g., budget exceeds) and departments.
- The portal lets vendors see only approved orders.
- The portal allows setting up spending limits and sending notifications about all budget exceeds to the procurement and financial departments, etc.
Intuitive user-centered environment
Easy-to-follow interfaces of modern procurement portals won’t require much effort, time, and long training to get into their usage.
It may be a good step to allow employees to take a direct part in a company’s purchasing activities in order to achieve more effective procurement and supply chain management.
A procurement portal serves as good assistance for such an approach allowing for guided buying to prevent violations of the company’s policies and easy-to-follow workflows that don’t require much time and effort to get used to. Moreover, it helps to keep a clear picture of the needs of each department and avoid confusion with future redistribution.
Yet, in no way we mean that eProcurement should replace the procurement department. Procurement employees organize and control the procurement process using the portal as a tool for that and get more time to focus on more important activities (for example, strategic sourcing) as well as avoid mechanical and time-consuming work of gathering multiple orders, combining them, seeing to their relevance and working as a service desk for employees afterwards.
Explore the Sourcing Intelligence to create the right sourcing decisions
Sourcing Intelligence can be stressful, time-consuming, loaded with rework, and duplication of effort. A typical sourcing process has supplier selection, logistics, customs, payments, government regulation, channel management, and risk management processes. These events consume huge amounts of time, people, effort, and coordination. If one is sourcing from foreign origins, sourcing processes can be even more complicated and constrained.
Sourcing intelligence or intelligent sourcing can break many of the above constraints and provide profound benefits to sourcing departments and procurement professionals. Two very powerful methodologies immediately come to mind, artificial intelligence and blockchain. AI mechanisms leverage robust data analytics platforms to execute various functions. Data analytics falls into several categories, descriptive, diagnostic, predictive, prescriptive, adaptive and autonomous.
AI in sourcing can provide the following benefits to sourcing intelligence processes:
- AI descriptive analytics: Sourcing professionals can access huge spend profile information provided through machine learning. This can be done at a fraction of the cost and effort with a significant reduction in errors.
- AI diagnostic analytics: Sourcing professionals can gain insight into the root causes of an increase or decrease in Total Cost of Ownership. The leverage of AI systems in this regard can yield great benefits and cost reduction.
- AI predictive analytics: AI can leverage analytics by using inferential statics and confidence levels to make decisions about the future. This can be heavily leveraged in forecasting raw materials requirements versus future customer orders.
- AI prescriptive analytics: AI can provide a set of decision options to sourcing professionals on how to approach their work. Decisions of when to negotiate, vendor selection, when to conduct bidding can be done more efficiently.
- AI adaptive analytics: Al systems can adapt to abnormal patterns in the sourcing process and provide dynamic insight on cost-effective courses of action.
- AI autonomous analytics: This type of AI and analytics are in infancy, but we may soon see critical parts of the sourcing process executed solely by machines.
Blockchain brings a great sense of visibility into the status of all areas of the sourcing process. Other ways blockchain makes sourcing intelligent:
- Greater accountability
- Greater efficiency
- Reduced risk and fraud
- Lead time reduction
- Reduced Total Cost of Ownership
Intelligent Procurement: How can AI expand Value
There is a great number of reports, articles, and studies done on Intelligent Procurement. This is indeed a rapidly evolving science. For context, it is prudent to define the Concept of Value, Value Chains, and Value Streams.
Value has 3 components:
- At set of activities are engaged in transforming inputs and raw materials from on stage to the next
- All activities are done right the first time
- Customers are willing to pay for the resulting outputs (good and services)
Value Streams are Supply Chain and are:
- Systems that source inputs that interact with data points, machines, processes, metrics, conversion mechanisms, logistics functions, and people to develop and deliver useful products and services to customers
- A mixture of value-creating activities, non-value creating but essential activities, and wasteful activities. A Typical value Stream consists of 10% Value Creating, 30% non-value creating but essential activities, and 60% wasteful activities. All three activities can be mapped and quantified for time and dollar impact.
The degree of automation in supply chains vary from company to company depending on size, complexity, complexity, and industry. We will examine how Artificial Intelligence can expand value in Business Supply Chain Operation:
- AI Models for Supplier Selection. AI and Machine Learning can leverage sophisticated data models to determine the probability of a supplier meeting the business requirements of the buying organization. These advanced, prescriptive, predictive, and autonomous AI Models can virtually eliminate the probability of selecting the wrong suppliers to deliver mission-critical inputs.
- AI for ensuring efficient support of Mission-critical Operations. The Procurement function is responsible for ensuring that all mission-critical inputs are procured at the right price point, delivered on time, with the agreed upon AQL (Acceptable Quality Limit). AI can help create a high degree of visibility with the required analytics and decision execution prowess to guarantee that these inputs are consistently delivered in the required parameters.
- AI for ensuring robust Benchmarking. AI can be leveraged to pull data and behavioral models from best in class procurement departments and compared to the capabilities of the buying organization. Helpful gap analysis can be performed with a tip on how to improve processes to close performance gaps.
- AI for Leveraging Big Data Sets to realize robust Procurement Function Strategy AI systems are becoming better able to interpret business landscape factors such as socio-demographic, political, economic, technological, competitive, ecological trends. These assessments can be formulated into Strategic Response Models (SRMs) that underpin corporate strategic plans with solutions to link supply chain and procurement function to these corporate strategies.AI Models can be pivotal in executing much of the mundane procurement tasks and free time for procurement to focus on more strategic tasks.
- AI for ensuring Non-Value Add Waste Reduction. AI systems being leveraged in a manner to error-proof process, reduce duplicate efforts, and eliminate unnecessary transportation, inventory, motion, waiting, and defects in supply chain activities. These systems are improving in the ability to determine optimal patterns for supply chain optimization.
Have You Researched The Latest Sourcing Tools?
For modern sourcing, leading companies have gone beyond the basic reverse auction and are making use of advanced sourcing tools to drive reduced costs, improved profits, and competitive advantage. Here are five types of advanced sourcing tools available today.
Sourcing Optimization – “The whole idea behind optimization is that rather than force suppliers to bid… on set criteria [and] set lot structures, that you begin to invite creativity into the process,” according to Jason Busch, Founder of Azul Partners and Editor of spendmatters.com. With creative bid data captured, “you can run your own constraints against them, and you can run scenarios and drive outcomes from them.”
Commodity Management – Hedging is the practice of agreeing on a commodity purchase price for a future delivery in order to achieve cost certainty in a volatile pricing environment. Busch advises that commodity management tools “can help you better forecast and model where prices might go” and simplify compliance with hedging-related accounting rules.
Savings Tracking & Forecasting – Savings tracking and forecasting tools don’t just identify what you might save – they track the money that is actually saved. Busch says that these tools also help procurement and finance teams answer questions like “How do we measure savings? How should savings affect budgets? And then how do we forecast savings and cash accordingly?”
Direct Materials Supplier Collaboration – “There are lots of platforms [which] tie together… the engineering, sourcing, and supplier collaboration side for direct materials,” states Busch. He cites collaborating on material substitutions as just one example where direct materials supplier collaboration tools are used.
Total Cost Modeling – When buying direct materials globally, there are many components of total cost from packaging costs to duties to freight fees to inventory carrying costs and more. “We’ve got to look at all these factors together and be able to create these total cost models,” says Busch. While building such models in Excel is possible, Busch notes that total cost modeling tools can facilitate “doing it within a sourcing context.”
Over the past few years, societal impact has been growing as an area of interest for businesses. Business leaders, myself included, have voiced the belief that businesses should have a purpose beyond profits, and uphold a responsibility to society and the environment. Although this school of thought is sometimes met with skepticism from those who doubt the commitment of businesses to do good, there is new research suggesting that businesses are actually taking significant action to improve their impact on society and the environment.
According to a new report from Deloitte Global, societal impact has become the most important factor organizations use to evaluate their annual performances, outranking financial performance and employee satisfaction. These findings are based on a survey of more than 2,000 C-suite executives across 19 countries. This shows a shift, even just from last year’s survey report, in which executives expressed uncertainty about how they could influence the direction of Industry 4.0 and its impact on society.
What is driving this change? There is no one answer. Almost half of executives surveyed (46 percent) reported that their efforts have been motivated by the quest to create new revenue streams, and a similar percentage said that initiatives that have a positive societal impact are necessary for sustaining or growing their businesses. An organization’s cultures and policies were also cited as motivation (43 percent).
External pressure continues to be a major driver as well. According to Deloitte Global’s series of inclusive growth surveys, some of this drive comes more from public sentiment, which is increasingly influencing business leaders’ decisions related to societal impact by encouraging them to reevaluate their strategies.
Purpose in action
When it comes to societal impact, businesses are beginning to put actions behind their words. Seventy-three percent of surveyed CXOs report having changed or developed products or services in the past year to generate positive societal impact. What’s more, 53 percent say they successfully generated new revenue streams from these socially conscious offerings.
While some leaders have started to see profits from positive societal goods and services, there is disagreement over the question of whether initiatives meant to benefit society also benefit bottom lines. Fifty-two percent see societal initiatives as generally reducing profitability; 48 percent said that such initiatives boost the bottom line. Despite these concerns, leaders report a commitment to initiatives that benefit society. There’s probably a short term vs longer term element in this regarding the sustainability of business which may have influenced the answers.
Beyond products, services, and new revenue streams, leaders are integrating societal impact into their core strategies. Executives say they have been particularly effective preparing for the impact that Industry 4.0 solutions will have on society. They’re also building external partnerships and joint ventures, and strengthening ecosystem relationships to make a greater impact.
Whether driven by finding new sources of revenue, or the need to respond to external pressures, businesses across all industries seem to be moving towards improving their societal impact. It is heartening to see that leaders are incorporating these considerations into their strategies, as well as operations. When societal impact is seen to be an integral part of a business’s makeup, the most meaningful results can be achieved.
Many procurement functions today are eyeing the latest digital technologies to help them become more agile and better able to respond to competition, change consumer habits as well as shift the focus of their team from tactical to more strategic and value-adding projects.
But, while the end goal of complete digitalisation promises much, there are a number of challenges and hurdles that need to be worked through before that agility can be realised.
In New York, the roundtable discussion, which was partnered by Determine, a cloud-based solution provider for source-to-pay and contract management applications, focused on this journey. But the procurement executives who were in attendance also suggested a number of key things that procurement chiefs had to have in their minds when they embark on this journey.
What systems do you have in place and how do people use them
One of the first jobs you should carry out when looking to implement new technologies is to find out what systems you already have in place, how people use them and specifically what they like and dislike about them. The outcome of that review and those conversations will allow you to analyse what technologies might work for your business, especially if that is aligned to the ultimate digitalisation goals of your business.
Find out who are the ‘influencers’ are
There will be people in your organisation who have more influence over others when it comes to making sure systems are being used and gaining traction across the business. Those at the discussion in New York said it was extremely important to identify those with influence and work with them. They pointed out it wasn’t always the CEO who would automatically have this influence – instead, they suggested you may be better going to your COO or CTO who would have more influence over such matters.
Closely related to finding out who your influencers are, it is vital to build up relationships with stakeholders across the business. You can implement as many new systems as you want and roll out as many new processes as you want, but if you don’t have the buy-in for those from the stakeholders who are going to use them, they will be rendered almost useless through the fact that they won’t be used.
Those in New York said building these relationships will also help you change the mindset of people who are used to simply complaining about procurement. If you listen to your stakeholders and find out their needs, you will be able to put systems in place that are beneficial to them and help them do their jobs rather than hinder them.
Procurement can build and implement the very best systems and processes. But if no one knows what they can do, they will never be completely embraced by the business or reach their full potential. Attendees in New York said it was of vital importance to “show the value you have created”, with one saying they had run a series of end-of-year town halls to showcase where procurement can offer support to other stakeholders and highlight key priorities for the year ahead.
For many, the digitalisation of procurement is all about making procurement simpler and more agile, cutting out friction and trying to eliminate the tactical work the function has long had to carry out. The only way the function will reach that goal is to know where it wants to go and how it will get there. This plan will provide a solid base on which to go forward, but success will only happen with the support of stakeholders across the business. This involves finding out who you need the support of and building from there to get the rest of the business on board.