IA and the Future of Procurement & Strategic SourcingAdd bookmark
Canda Rozier is a former Chief Procurement Officer, Global Sourcing Executive, and a Certified Intelligent Automation Professional (CIAP). This is the first in a series of articles about Intelligent Automation and its impact on Future Procurement and Strategic Sourcing practices.
We are constantly presented with new buzzwords, concepts-de-jour, technology trends, and management “must do’s”. Many are merely 5-minute wonders, the proverbial flash in the pan. The internet and social media platforms are a breeding ground and, too often, also a dustbin for those that have fallen out of vogue.
Intelligent Automation (or “IA”) is one of the concepts that seems to be everywhere – it’s one of the hottest topics on LinkedIn, technical publications, websites, industry segment forums, and at conferences. But make no mistake: IA is here, it’s real, and it’s not a passing fad. Gartner published their first ever Magic Quadrant for RPA Software last year, and the IA market is estimated to be $2.4 billion by 2024.
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An Everest Group Survey conducted in 2018 showed that 95% of companies listed Intelligent Automation as one of the top 3 investments in the next 2-3 years (i.e., now!).
Intelligent Automation is, and will continue to be, an ubiquitous part of the foundation and fabric of business systems and processes. Companies must embrace it as an integral part of their business model and strategy if they are to be successful in this era of digital disruption. The old adage of “adapt or die” is apropos.
So what does this mean for Procurement and Strategic Sourcing?
Procurement is uniquely situated to lead the adoption of Intelligent Automation, which is a critical component of successful procurement organizations in the future. IA is part of the technology landscape; it transforms and augments business processes, and, ultimately, can reinvigorate the Source To Pay (S2P) spectrum for a company.
Companies that ignore IA, that think they can’t benefit, or are too busy to adopt it, will fall behind and lose valuable market positioning, competitive advantage, and agility.
Procurement Leaders need to be at the forefront of embracing IA, and lead the drive for its adoption. Properly scoped and implemented, IA can yield significant benefits for S2P and add demonstrable shareholder value.
Some of the key benefits of IA implementations are:
IA can free resources to focus on higher value-add deliverables. Although it may result in personnel reductions, the bigger and more critical benefit is refocusing and redirecting resources to produce greater business value.
2. Risk & Governance
IA and the process redesign that underpins it should be a catalyst for providing transparency, improving governance, and reducing risk all along the S2P lifecycle – for example, sourcing events, purchasing transactions, supply chain integrity, vendor risk assessment, and supplier on- and off-boarding.
3. Systems & Data
IA can create a foundation of data to support analytics, not just for sourcing, spend, and suppliers – but also for broader business processes, customer satisfaction, and market competitiveness. Intelligent Automation can enable future technology and systems growth, and be the cohesion point for business process automation and leveraging disparate applications.
To be clear, IA is a journey, not a destination. It encompasses business process automation, Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML), and Natural Language Processing (NLP), as well as a full variety of combined flavors. All these are building blocks for procurement and supply chain organizations of the future. IA is an enabler and facilitator for improved efficiencies, profitability, and effectiveness.
Over the coming weeks and months, we will look at the role and impacts of Intelligent Automation on Procurement, Strategic Sourcing, and the end-to-end Source-to-Pay process. We will explore:
- What IA is, and what it isn’t
- Keys to successful IA projects
- Pitfalls to avoid
- Benefits, outcomes, and risks
- How to deal with detractors
- Much more!
Intelligent Automation isn’t an option, it’s part of the holistic environment for Source-to-Pay. It can be a huge contributor to the success of a company, and to procurement’s role in that success. IA plays a key role in the Future of Procurement. So, embrace it, maximize it, and champion it!