At the Salon Solutions trade show in Paris on September 21, I shared with attendees Determine’s vision for the future of Procurement Information Systems. What follows is a summary of my key points.
Procurement Solutions and Organizations, after some twenty years of development, are now reaching maturity. Even though implementation levels are different from one continent to another, it is still possible to consider what the future might hold. Procurement Solutions will bring three main areas of innovation to Procurement Departments:
- Collaboration and User Experience
- The Cloud and Consumable Applications
- Big Data and Machine Learning
Collaboration and User Experience
While collaboration throughout an organization, and with suppliers, is at the heart of procurement, Procurement Solutions still fall short in ease of use for occasional users. How are you supposed to work together with business experts, prescribers and suppliers who only need to be in touch once or twice a year if a solution is not easy to use or doesn’t offer an intuitive user experience?
Companies who are aware of this are already conducting an in-depth redesign of user interfaces (UI) based on the reimagined User Experience (UX) methodology called Material Design, first developed by Google.
The Cloud and Ready-to-Consume Applications
Although traditional Procurement Solutions companies have now moved from selling licenses to a subscription-based model, very few of them have embraced the future: the Cloud.
Of course, with each of them hiding behind a swarm of loosely defined buzzwords, it is still possible to conceal the inconvenient reality of all the technological “wrong turns” taken in the past.
The first generation of Cloud-based Procurement Solutions is still not that different from traditional applications. But with Procurement Departments’ processes now reaching maturity, the second generation of Cloud applications is about to create a seismic shock in the world of Procurement Solutions.
These ready-to-consume applications will transform the design, configuration, administration and interfacing processes. Such tasks, which currently put Procurement Solutions in the preserve of business processes and IT, will practically disappear, enabling functional areas to take total control and tailor solutions to suit their own needs.
Big Data and Machine Learning: Predictive and Prescriptive Analytics
The world of data analysis and BI (Business Intelligence)—now called Big Data—is exploding, driven by business requirements, data volume and technological progress.
Today, Procurement Solutions are still providing access to the past: reports, indicators and other KPIs that allow us to focus on and examine what has already happened. Two revolutions are awaiting in the very near future: predictive analytics and prescriptive analytics.
- Predictive analytics: the ability to assess the likelihood of an event. Predictive analytics lets you trigger an alert or an action, or create expected scenarios. Maybe this immediately suggests risk management to you, but you can also think in terms of a pre-filled purchase request based on the frequency of its occurrence, enabling a biologist, an engineer or a salesperson to spend less time using the Procurement Solution.
- Prescriptive analytics: the recommendations engine. Procurement Solutions will be able to push recommendations to users, taking into account personalized business rules to create interactive situations. Imagine a direct production buyer monitoring her two accredited suppliers in serial mode; she receives a recommendation informing her that one of those two suppliers’ competitors has increased turnover by 17%, while the two suppliers themselves have only managed 1% and 3% respectively. What’s going on? What have they found? What advantages are competitors gaining by working with those procurement sources?
Before you choose your next Procurement Solution provider, consider how these scenarios will be relevant to you in the future:
- Collaboration with internal and external stakeholders by occasional users will become a reality, opening the way to new processes.
- The power of the Cloud will lead to the development of applications which are ready to be used by, and for, business processes, assisted by business consultancy firms.
- Big Data, predictive analytics and prescriptive analytics will unlock the value within your business, empowering better decisions at every level in your company. The creation of Data Steward with oversight of all enterprise data is, now more than ever, a key consideration which will have a direct affect on how your organization performs.
The technologies in question are already being used in other information systems sectors — CRM and BI. Will developers be able to translate them to the professional environment of Procurement, which is demanding ever more data, information and knowledge?
* If you’d like to learn more about how our Cloud Platform-based Procurement Solution can empower your organization, schedule a demo.