Technology has actually been important to procurement transformation for more than two decades, and that importance continues to grow. Today, much of the buzz relates to so-called “big data,” as it should, since therein lies great potential for procurement to dramatically raise the value the function provides.
If there is anyone out there who doubts the importance of technology in procurement, recent news from Cisco should have been a wakeup call. The company announced that Rebecca Jacoby, formerly chief information officer, would become senior vice president of operations. Among her responsibilities: the company’s supply chain.
Analysts said that her appointment reflected the company’s increasing emphasis on technology, including technology for managing the supply chain.
Of course, few CPOs have doubts about the importance of technology. The 2015 Procurement Leaders Trends Report reveals that nearly 53% of respondents to the survey underlying the report plan to increase their investment in technology this year.
Technology has actually been important to procurement transformation for more than two decades, and that importance continues to grow. Today, much of the buzz relates to so-called ’big data,’ as it should, since therein lies great potential for procurement to dramatically raise the value the function provides.
But other data that provides spend visibility and eases procurement operations remains important too. You can’t know enough about your supply chain, as seems evident from a recent report by Reuters. The news agency said a lack of data about suppliers in Asia could make firms complicit in slavery without their even knowing it.
Technology also enables better compliance to contracts and to rules requiring use of suppliers already on an approval list. Daniel Ball, of Wax Digital, wrote on these pages that eSourcing platforms are one way of ensuring that the terms of a contract become hardwired into purchasing and wider business processes.
Finance is taking note of the importance of technology to procurement. CFO Magazine presented a webcast featuring Duncan Jones, principal analyst at consultancy Forrester, speaking about the importance to finance and procurement of making P2P systems easier to use. He also suggested that firms that allow employees to go to suppliers’ websites should tell those suppliers to delete any elements in their websites intended to up-sell customers so they will buy more.
One element of ease of use in technology is trust that the technology won’t lead to errors. One source of errors can come from the necessity to re-enter data from one system to another, say from an ERP system to a procurement system. Ariba recently announced in that regard that it had released a tighter integration with SAP for purchase of direct materials. Now, an RFQ within SAP can go directly to Ariba Sourcing so procurement can review the request without re-entering it and decide what action to take.
As much as technology has transformed procurement up to now, it is destined to be of even greater importance in the future, largely because of its own evolution. Flextronics CPO Tom Linton has written that the new technology ecosystem will include the Cloud, mobile devices, big data, and social and cognitive networks.
CPOs should be thinking about all those possibilities. Certainly, others in the firm are.
from Procurement Leaders Blog http://ift.tt/1J1BXGP
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The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.
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