Facing the transformational wave of procurement technology

Former CPO and procurement consultancy veteran Peter Smith has pinpointed the dilemma faced by procurement…...

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Former CPO and procurement consultancy veteran Peter Smith has pinpointed the dilemma faced by procurement professionals as new supply chain technologies go live. The question on everyone’s mind has been, will increased automation render human labour obsolete or drive innovative changes in procurement roles?

The coming wave of technological innovation centred on machine learning and artificial intelligence (AI) is going to change the entire nature of corporate procurement, Smith predicts, and professionals will see this in their day-to-day lives.

The use of tech can gradually increase with profound effects that are sometimes barely noticeable. Citing the example of contactless payment, Smith observes that this has resulted in dramatic changes, particularly in the management of pubs. Especially in cities such as London, contactless payment has had an immense impact, and in the post-work hour between 5–6pm, the dash to the City pub has been transformed.

Smith estimates that now, well over half the customers pay by using contactless cards, slashing the time-consuming processing of credit or debit cards by bar staff. Previously, these processes were often more time-demanding than paying with physical cash, despite being the height of technological innovation in their day.

The near-immediacy of contactless payment processing has slashed the workload by an appreciable double-digit percentage at the busiest periods. As Smith explains: “That is bad news for employment of course, although maybe staff will be re-allocated to higher value tasks – that’s our hope as procurement tasks also increasingly get automated.”

Once the technology starts arriving and delivering obvious user advantages, it can be astonishing just how rapidly it gets taken up on a massive scale, with contactless payment tech being a case in point.

With new technology promising to transform the manual aspects of tail spend management, supply relationship management and company cost reduction, new-gen procurement professionals will need to develop new skills in data management, algorithmic optimisation to ensure glitch-free automated supply chain management and partnering with non-procurement colleagues to establish effective data management.

Nick Ford

Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.

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