Chief Procurement Officers (CPO) face a challenge to help their teams take advantage of new technologies in data analytics, artificial intelligence, machine learning, and automation, a technology expert warns. Writing in ITProPortal, the technology expert, Louis Fernandes, claims these technologies are poised to improve spend analytics, cost reduction, supply relationship management, and procurement transformation. The need to grasp, understand, and use them is now urgent.
Procurement professionals with the necessary tech experience need not fear for their jobs, Fernandes says, as the technology will promote a new partnership between human minds and machines, not a Terminator-like conquering of human abilities. Human minds may not be able to compete with the computational resources of the technologies, but they can do something the technologies can’t: reason. By combining reasoning and human interpretation based on real-world information with the data coming in from AI, the human-machine partnership is already delivering better decision-making and ‘super-intuitions’ that mind and machine alone could never achieve.
The digitisation of procurement functions, Fernandes says, has distinct phases. First, procurement data is consolidated into the cloud, where the power of machine learning can work on it to deliver high-impact results. The resulting data becomes the foundation for automation.
Currently, a new phase of cloud-based big data, predictive analytics, machine learning, and AI is crystallising, granting professionals access to timely, accurate, and full data to inform better decision-making and improve business agility. But, Fernandez identifies an inherently human problem, which could undermine the promise of the technology: our gut feelings can over-ride data-based insights and move us towards intuitive, instinctive decisions rather than data-driven ones. CPOs must help their teams avoid this by becoming behaviourally aware, and more sceptical of, instinctive decision-making tendencies, and to go with data, not guts. Fernandez concludes, “Over the next decade, AI won’t replace people, but people who use AI will replace those who don’t.”
Steve has over 28 years of success as CPO, MD and Procurement BPO leader in a range of industries. Steve is COO at Odesma, responsible for Odesma’s delivery capability & infrastructure.