It seems as though procurement has been anticipating the arrival of 2020 since the minute the ‘Y2K’ buzz wore off. Predictions and research, webinars and report titles… ‘Procurement 2020’ has such a nice neat ring to it. Now that it is just weeks away, it seems appropriate to get down to business and think about what (if anything) is really going to be different. Will 2020 be just another calendar year or will it actually usher in meaningful change for the profession?
While the new year doesn’t offer inherent disruption, some of the trends that have been brewing within procurement for the last couple of years are finally approaching the point where we will need to act upon them. Automation has been a central topic of conversation, but few companies have entered the pilot stage, let alone implemented anything enterprise-wide. I believe 2020 is the year we will get past the fuzzy glow of automation and start making it an operational reality. But… first things first…
Whether you are into AI, machine learning, predictive analytics, robotic process automation (RPA) or blockchain, no emerging technology is worth a penny without solid data to run on. As procurement goes off in search of that data, we will quickly realize that the current state of our data is poor if not catastrophic. Hopefully, most teams won’t stop with that realization, but will push on and become part of the solution. Doing so will not only bring us back to our roots as analytical process engineers, but also provides procurement with an opportunity to address some of the other nagging problems affecting enterprise data visibility.
Every system in an enterprise both creates and feeds on data. This not only produces almost too much data to use, it further contributes to paralysis by storing that data in different structures, on different clouds and presenting the loaded question of who’s dataset is the master dataset? The greatest advantage of having data is that it provides an objective look at business activity. If there is more than one version of the truth, however, procurement is no closer to synthesizing suppliers with spend and contracts than when everything was in hard copy. Any intelligent solution that is to be laid on top of data requires that information to be comprehensive and representative of reality. Procurement may well be the function that steps up and finally brings enterprise data into a cohesive and centralized location.
If procurement could wave a magic wand and bring all the data together into one database, would anyone trust it? Probably not. If decision makers are hesitant to act on data today, piling it all up together is unlikely to increase their confidence. Even something as simple as duplication can throw off an algorithm. According to Cohesity Founder and CEO Mohit Aron (writing for Forbes), “Companies without data quality initiatives could have duplication rates of 10-30%.” Add to that the incidence of expired, erroneous, and missing data, and most systems will either grind to a halt or spit out a useless answer. First procurement needs to resolve the data quality issue, and then we need to engage in an outreach campaign geared at restoring trust in its reliability.
It is impossible to improve the state of enterprise data without interacting with the processes that create it and the systems that feed it. In fact, process improvement could be considered the primary objective of digital transformation, with poor data quality serving as a symptom rather than the main problem. Just as with problematic data, introducing automation into a situation where processes are ‘broken’ is a waste of time and resources. Before being able to implement exciting new technologies, procurement will have to assess and audit internal processes, using our influence and collaboration skills to lead human progress before we can implement technological advancement.
We’ve all been ‘razzle dazzled’ by tech automation over the past few years, but in order for its promised value to become reality, we have to bring it down to earth. The more complex or altering a technology promises to be, the more critical it is that the solution stands on a solid foundation of quality data and reconciled process flows. Far from being a year full of futuristic abstractions, the timing will be right in 2020 for procurement to get real and then get down to business.