Exploring the future trends, opportunities, technology innovations, success strategies, and practical solutions in procurement within the Asia-Pacific region.
CEO Lance Younger had the opportunity to discuss his thoughts on ‘building the future of digital procurement’ at the recent Procurement Asia held in conjunction with Coupa and the Global Supply Chain Council on 8th April.
During the event, the discussion focussed on how we can ‘Fast Forward digital procurement’ by exploring the following themes:
Alliances and ecosystems (intelligent collaborative ecosystems)
Digital supply and demand
From start-up to scale-up
By-modal, plug and play, on-demand
Low/no-touch, guided, autonomous, mobile, collective intelligent
Rapid, sustainable ROI
If you didn’t get the opportunity to attend the event, we thought we’d share the Q and A’s to give you a sense of what the audience we’re looking for, the questions that were posed and how we responded.
Does product leadership work when you outsource your manufacturing completely e.g. Apple?
Yes – in the design aspects and then with regards to the expectations that the supplier is a product leader to
As the procurement function expands, do executives have the right skill sets to support it?
Core skills exist, however, there are new skills that need to be developed across new capability areas as well as new ways of working including digital
Since risk management becomes so important, do you recommend a separate team or should it be integrated inside procurement?
Discrete capabilities need to be developed and whether a team is required depends on the size of the company and also the type of risk being looked at. For example, info security risk is typically covered by the IT team; another example in Financial Services is there is often a central Vendor Management Office that manages centralised activities including risk.
Companies used to have IPOs (International Purchasing Organisations) in Asia. Is the model still suitable today?
Yes, again it depends on the size of the organisation and the organisation model within that function eg centralisation vs decentralisation, outsource vs insource.
Where do you think procurement automation will happen? Which processes or functions?
We have seen significant automation levels already in Purchase to Pay. This will continue and with the introduction of more sophisticated AI/ML solutions automation has extended into other activities eg sourcing and contracting, this will go further still.
Where are the biggest saving opportunities this year? Which categories need more attention?
This depends on the maturity of the organisation and which categories you have already looked at. In addition, whilst looking to reduce costs, many organizations are also looking at reducing risk / improving resilience, securing supply and improving sustainability.
How about ML and AI, do you think it will substantially transform procurement?
Absolutely, for most companies they are already deploying this in the digital procurement solutions that they are using. As procurement increases the data it consumes, then the benefits of ML and AI will fully kick in. In addition, the application of IoT, Blockchain, RPA etc will increase to, augmenting the transformation of procurement processes, operating models and spend categories.
Do you really think companies care about supplier ‘experience’? Why is it so important?
Companies that understand the value that can be delivered through the entire supplier network / chain do, especially where they have mature relationships with their supply base. The supplier experience is as important as the customer experience. If the supplier experience is exceptional, then as a company you will benefit from access to new ideas, stronger collaboration, reduced operating costs, faster communications, all of which will benefit your ultimate customer.
Can you transform procurement without digitalization?
Yes, however, most organisations will not fully achieve their transformation goals without some form of digitalisation. Whether that is digitalisation of process or accessing/using new data sets or using new digital tools to improve the way procurement operates eg reporting, team management, collaboration. Ultimately, as many of the categories of spend are also being digitalised eg marketing, HR… then procurement needs to have new ‘digital’ awareness and skills to manage this too.
I like the procurement bionic team… when do you expect it to happen?
It’s happening now … teams are using digital solutions to enable themselves. The simplest example of this is the application of RPA to many transactional activities, as well as some of the digital solutions that exist, plus the use of conversational interfaces too.