Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”….
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Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”. Money20/20 USA has unveiled seven startups poised to transform the financial sector. The selected startups are Brightwave, Casap, Eisen, Footprint, NALA, Ntropy, and Zumma. They were revealed during the Startup Media Session on October 29th in Las Vegas. The Startup Media Session was designed as part of the event’s goal to support startups at the intersection of finance and business.
“Money20/20 USA is focused on what drives the conversations most relevant to the FinTech industry. From economic and regulatory uncertainty to the future of payments and the impact AI will have on money moving forward. We are proud to highlight the work these startups are doing to move this industry forward.”
Scarlett Sieber, Chief Strategy and Growth Officer at Money20/20
Brightwave
Brightwave is the leading AI platform for financial services. It delivers accurate and insightful financial research enabling finance professionals to make better decisions faster. Its purpose-built AI systems synthesize insights across thousands of pages of primary sources. It can automate the most tedious parts of investing workflows and help users spot opportunities others have missed.
“Being named one of the Top 7 Startups at Money20/20 is a strong acknowledgment of the strides we’ve made in transforming how investment research is done. We’re also excited to announce our $15 million Series A funding at the world’s premier show for financial innovation. At Brightwave, we’re tackling one of the hardest problems in finance. We’re making sense of vast amounts of data to uncover deeper insights and relationships that others miss,” said Mike Conover, Founder and CEO at Brightwave.
Casap
Casap is an AI-powered disputes automation and fraud prevention platform. With built-in regulatory expertise and network integrations, Casap’s intelligent automation identifies fraudulent claims early. It delivers fast, frictionless dispute and chargeback resolution at a fraction of today’s cost.
“Money20/20 was the first conference I attended after starting Casap last year and it played a pivotal role in validating our vision. The connections, conversations, and insights I gained were invaluable. Exactly a year later, we’re back and launching out of stealth with live customers. We’re addressing some of the most pressing challenges in scaling payments. We’re starting with automating chargebacks and combating first-party fraud. We’re deeply grateful to Money20/20 for this opportunity to reach so many in the industry and help drive meaningful change in how payments are operated at scale,” said Saisi Peter, Co-founder of Casap.
Eisen
Eisen is the first escheatment automation solution that proactively manages the offboarding of dormant accounts, stale checks, wind-downs, and more. Financial institutions rely on Eisen to simplify the complex landscape of regulatory outreach, disbursement, and escheatment requirements. It ensures compliance while reducing operational risk.
“Money20/20 has been a cornerstone for Eisen since 2021, where the very idea for our company first sparked in the halls of the Venetian. It all started with conversations about the hardest challenges in FinTech. Each year, it’s helped us refine our vision and better serve our customers. For us, Money20/20 isn’t just about growth — it’s where Eisen began,” said Allen Osgood, CEO of Eisen.
Footprint
Footprint is a Series A identity company that has raised $20M from funds such as QED and Index Ventures. The company provides a single SDK that automates onboarding – KYC/KYB, fraud, security, and authentication – into an easy-to-integrate solution. Footprint works with leading companies across the Banking, Auto, and Real Estate sectors. Its technology portabalises identity, creating a centralised database of de-duplicated authentic identities.
“Money20/20 is at the vanguard of innovation. We’ve tried to be different at Footprint. Whether that be through our recent fraud indemnification program or our approach to labeling good actors. Some may think these are crazy ideas. But it is great to see Money20/20 continue to be where crazy can get a spotlight. That is how I would like to think true innovation happens,” said Eli Wachs, Co-founder and CEO of Footprint.
NALA
NALA is a global cross-border payments fintech company based in the US doing cross-border payments to emerging markets like Africa and Asia. It has two products, a consumer FinTech product enabling migrants to send money home and an infrastructure business called Rafiki, building payment rails for Africa. NALA recently became profitable and raised a $40m series A after achieving 10x revenue growth in 12 months.
“At NALA, we are on a mission to build payments for the next billion. Emerging markets are often overlooked but shouldn’t be underestimated as these regions have seen the fastest economic growth in the world. We have big ambitions for what we would like to achieve and have exciting plans in the pipeline in the coming years,“ said Benjamin Fernandes, Founder and CEO of NALA.
Ntropy
Ntropy is on a mission to organise the world’s financial data. 80% of the world’s financial data is unstructured and locked in transactions, documents, PDFs, and images. This means it is under-leveraged and cannot be used by models at scale. Ntropy was founded to solve this problem for any type of financial data, in any language, any geography, powering humans and more recently agents and agentic workflows in finance.
“Ntropy is processing hundreds of millions of transactions and documents weekly with over 98% accuracy, in under 100ms, 1000x faster, and cheaper than any other provider on the market. You can access Ntropy via our API-s directly, and more recently via NVIDIA NIM-s. This collaboration enables flexibility in deployment and allows our customers to scale immediately. This year’s Money20/20 has been about demonstrating the real value of GenAI and we have been very fortunate to have this exposure together with our partners at NVIDIA, Oracle, and AWS, who are accelerating Ntropy’s mission,” said Naré Vardanyan, Co-founder and CEO of Ntropy.
Zumma
Zumma is a financial copilot that automates and simplifies financial processes for Latin American businesses by leveraging existing tools they already use such as WhatsApp to save them time and money. The company is starting with automating expense management and expense invoicing processes, saving their customers more than $4,000 per employee per year in tax deductions.
“Being part of Money20/20’s Startup Media Session helps us spread the word about our product to the fintech community. The Money20/20 team has been key in our growth by connecting us to key players in the industry,” said Daniela Lascurain, COO and Co-founder of Zumma.
Launched by industry insiders in 2012, Money20/20 is the heartbeat of the global fintech ecosystem. Moreover, some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com, Money20/20 is the place where money does business.
Global cloud services point-of-sale provider, GK Software, was founded over 30 years ago in Germany. For most of its existence,…
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Global cloud services point-of-sale provider, GK Software, was founded over 30 years ago in Germany. For most of its existence, its focus was on expanding across Europe. However, in 2015, GK broke into the US when its partnership with SAP helped it drive into that vital market. The business has been thriving stateside ever since. Its core business is a point-of-sale software platform – CLOUD4RETAIL – which features the OmniPOS solution. Today, GK is ranked highly in global POS installations and has been among the top three for the last five years.
GK is an organisation committed to continuous improvement and customer engagement. It is evolving, getting into newer technologies like AI in a big way. It’s leveraging its expertise to improve insights into what its retail customers and their shoppers need. This includes everything from price optimisation to loyalty to self-service technologies.
Its ability to provide these services, through its expertise, is what attracted Virginia ABC to GK Software. Virginia ABC was a previous user of SAP’s point-of-sale (POS) solution, but as the authority evolved, it required an updated POS.
GK Software meets Virginia ABC
Enter: GK Software. “As a result of our relationship with SAP and with Paul Williams at Virginia ABC, we were shortlisted in their new point-of-sale solution selection,” explains Max Francescangeli, Regional Sales Director at GK Software.
“With Virginia ABC, we went through quite an extensive selection process. It’s a government agency, so the rules are very strict,” says Francescangeli. “But we were able to prove that we could use our expertise to address and solve all of their problems in spite of the unique environment they operate in. They needed a flexible solution that would interact well with their legacy platforms during implementation. We were certainly able to provide that. So, we were eventually awarded the business and the project has been extremely successful.”
The approach GK takes with its customers during these projects highlights just how much out-of-the-box capability its solution has. GK’s team spent a lot of time with Virginia ABC. The organisation examined its business requirements and using a consultative approach to show how its software could be configured. This was so it could meet the end-state business requirements and take advantage of best-of-breed capabilities that exist within GK’s platform.
“Rather than going there and trying to do a lot of customisation, we wanted to help them take advantage of the software as it exists,” Francescangeli adds. There were also other areas where GK was able to provide a lot of value and expertise to Virginia ABC. These include payment processing and its partner ecosystem. Virginia ABC was previously using a payment provider with limited capabilities, but GK was able to step in and expand the technology set. “We gave them more hardware choices, expanding what they could do with their in-store devices.”
Virginia ABC also needed more advanced reporting and analytics within its environment. So, GK introduced a solution called Advanced Central Electronic Journal and Reporting. Francescangeli continues: “It saved them a tremendous amount of effort, and gave them a lot of flexibility. We implemented that very quickly and they gained business value from it immediately.”
An evolving partnership
GK Software and Virginia ABC worked on initial deployment for the first 12 months of the project, and GK has continued to supply its services ever since. Each year after the first, Virginia ABC has expressed interest in something else GK offers. As a result, the relationship has remained close and Virginia ABC continues to expand the partnership.
“Paul and his team have been champions of ours and we’re champions of theirs as well,” Francescangeli states. “Due to the relationship we have with Virginia ABC, we have been able to secure business from other retailers in the same space because they have confidence that we know how to handle the market.”
“GK checks a lot of boxes retailers are looking for,” Bill Miller, North American VP of Sales at GK adds. “We’re in this inflection point where we offer modern technology that also has a lot of functionality out of the box, and that’s what people want. That’s what Virginia ABC wanted, and that’s what we supplied.”
CPOstrategy explores five ways CPOs can attract (and retain) top tier talent and why there is no one simple solution.
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Only a small fraction—less than one-fifth—of procurement directors and executives are confident in the ability of their current talent pool to meet the future demands of their organisations’ procurement functions. While these leaders were relatively confident in their current talent pools, the survey revealed a significant drop in confidence levels when considering their ability to address future demands.
The industry-wide talent shortage affecting procurement teams is driven by the compound forces of an increasing procurement workload, and the increasingly strategic nature of the field. Procurement is not just purchasing anymore; procurement professionals are expected to have greater business acumen, technical knowledge, and be “orchestrators of value” within the business. It is vital that the procurement leaders of today attract, retain, and develop the procurement professionals of tomorrow if they want to leverage the strategic potential of procurement beyond simple cost-containment.
1. Competitive salaries
Offer competitive salaries and benefits packages to attract top talent. This is while demonstrating the value placed on procurement expertise within the organisation. There’s plenty of content out there focused on company values and work-life balance to attract talent without paying for it. But just as cost is still at the heart of procurement you still need to pay people what they’re worth.
2. Professional development opportunities
Provide opportunities for continuous learning, skill development, and career advancement through training programs, certifications, and mentorship initiatives. Old attitudes concerning employee loyalty are disappearing faster than the housing market. Jobs that don’t provide room to grow will be vacant before long.
3. Embrace flexibility
Remote and hybrid jobs attract seven times more applicants than in-person roles. Despite what some opinion columnists at Business Insider and Bloomberg say, no one wants to live and die in a cubicle. Casual Fridays are hell on earth, and managers who resist flexible working arrangements need to face up to the fact that they are not only fighting a losing battle, but also hindering their company’s hiring potential in the process.
4. Foster a collaborative environment
Create a collaborative and inclusive workplace culture that encourages teamwork, innovation, and open communication. It is about fostering an environment where top talent can thrive and contribute their best. Businesses that practice DEI give themselves access to new and diverse perspectives. This is especially essential in an era of increased supplier diversity and nearshoring.
5. Use tech and make a big deal out of it
Getting the chance to apply cutting edge digital solutions to real-world problems is what people get excited about. By highlighting your organisation’s commitment to leveraging cutting-edge technologies and innovative procurement practices, your procurement roles will seem appealing to those eager to embrace new tools and methodologies. Successfully (and visibly) leveraging technology will also help combat the fact that, when it comes to recruiting younger staff, procurement’s reputation as a back-office function can hold it back. Leveraging AI, big data, and automation successfully can be highly impactful in boosting the function’s profile.
Technology and training are working together to lighten the administrative load faced by procurement teams.
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Over the last 18 months, attitudes towards ongoing economic (and political, oh, and climate) uncertainty seem to have finally pushed past a tipping point. Discussions of a return to some pre-2020 normal baseline appear to have been replaced by a more honest interrogation not of how we get back to where we were, but how we learn to deal with how things are.
Geopolitical, economic, and climate instability aren’t going anywhere, and the organisations that learn to adapt to this new state of affairs will be the ones to generate real value from their functions. “Procurement and finance teams are increasingly tasked with enhancing their organisation’s spend management,” writes Ruth Orenstein, Senior Director of Product Management at Tipalti. “This is crucial to ensure financial stability and resilience against fluctuating macroeconomic conditions.”
The growing trend, Orenstein notes, is a shift towards a “streamlined, decentralised P2P process, emphasising the importance of employee experience and the adoption of procurement-related processes.”
Rather than centralising procurement decision-making within a single department, decentralised procurement takes a freer hand, allowing individuals to make purchases for their own departments, instead of pushing all purchasing through a centralised team. Procurement, even for a mid-sized organisation, can encompass a huge variety of purchases., which can range from which ergonomic mouse pad to buy for a remote contractor to sourcing thousands of tonnes of raw material weighed against cost, time to delivery, and ESG goals.
When different teams specialise in different product categories, or when handling smaller and less impactful purchases, decentralising the procurement process can increase the speed and agility of an organisation’s spending.
Decentralised procurement: risk vs reward
There are obviously risks to adopting a more decentralised procurement strategy. Handing over purchasing autonomy to department buyers or individual employees carries an increased risk of overspend, fraud, and more dark purchasing throughout an organisation. There is also a risk that teams will spend an outsized amount of time monitoring spend, chasing down policy violations, and generally not saving any time.
However, the advantages can be significant, and procurement teams that successfully create strong procurement guidelines and parameters (digital marketplaces that allow department buyers to make acquisitions from a pre-approved list of goods can be a functional halfway point between centralised and decentralised procurement), as well as effectively educate non-procurement personnel in good buying strategies can successfully lighten their load, create greater agility, and overall improve the overall process throughout the organisation.
If every company in 2015 was a tech company that required employees to have a basic knowledge of the IT stack, by 2025, every company might just be a procurement company.
With cyber attacks on the rise, Chief Procurement Officers need to take a more active role in protecting their organisations.
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The number of attacks against supply chains is rising at an alarming rate, and increasingly it is the case that a business’ most common vulnerability is their supplier ecosystem. “If your company were to get breached, there is a 70% probability it will be through one of your vendors,” noted Norman Levine, a senior manager at Omnicom in a 2021 webcast. By 2025, Gartner predicts that 45% of organisations around the world will have been the subject of a cyber attack on their software supply chains.
Increasingly, then, CPOs have a meaningful role to play in standing between potentially risky suppliers and their organisations.
Robust cybersecurity
However, the increasingly complex and digitalised nature of the procurement sector isn’t making this job any easier. Baber Farooq, a senior VP at SAP Procurement Solutions wrote in a recent op-ed that “As companies and consumers increasingly rely on global, interconnected supply chains, procurement operations are now a favourite target for cybercriminals.”
According to a 2023 survey of CPOs by Deloitte, fewer than 3% of procurement leaders felt they had “high visibility” beyond the first tier of their supplier network.
“If enterprises don’t know who they are doing business with—directly and indirectly—it is almost impossible to manage risk proactively,” Farooq writes.
Setting the standard
Only by setting standards for their suppliers that garner real visibility deep into their supplier ecosystems, and then supporting that visibility with periodic monitoring is essential.
“For procurement leaders to avoid risks, they need to start from square one. That means performing due diligence during the supplier selection process and implementing continuous monitoring across their extended supply chains throughout their relationship,” argues Farooq.
“Risk Ledger reports that over 20% of organisations do not conduct cybersecurity due diligence before entering a contract. On top of that, 23% of suppliers do not have formal agreements in place with their third parties regarding security clauses. These situations compound the risks of cyberattacks and make an organisation increasingly vulnerable to a breach.”
Renowned procurement tech conference DPW has announced its first United States event will take place in New York City in June 2024.
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DPW has revealed it will host its first United States event in New York City following the event’s success in Amsterdam.
Having made its name in the Netherlands, DPW will now host its inaugural North American event at the NeueHouse Penthouse in New York on 12th June, 2024.
DPW in New York
The event will aim to spread awareness of DPW’s presence in a new market together with launching partners as it begins to expand out of operating solely in Amsterdam.
Back in November, founders Matthias Gutzmann and Herman Knevel travelled to Silicon Valley, California, to discuss an expansion into the United States.
Founder Matthias Gutzmann
Gutzmann said since 2018 he has harboured ambitions of bringing a procurement conference to New York. “Sitting in my Brooklyn apartment, I envisioned something revolutionary, something capable of harnessing the immense potential of digital procurement in unprecedented ways,” he confirmed. “Fast forward to today, DPW has evolved into the leading tech ecosystem for procurement and supply chain, with our annual event in Amsterdam drawing thousands of attendees and driving impactful change on a global scale.
“For years, I’ve been urged to bring DPW to the United States, and I am proud to say that day has finally arrived. Launching our event in the city where it all began is not only a milestone for DPW but a deeply personal achievement. The DPW NYC Summit is much more than just an event – it’s a testament to perseverance, innovation, and the power of a vision realised. Let’s shape the future together!”
Growing at speed
Knevel believes adding New York to its already popular Amsterdam event will bring another dimension to the organisation’s offering. “We want to engage with the community in the ecosystem on the East Coast and the Americas,” explains Knevel. “It’s also not the same format as Amsterdam as we bring people and the ecosystem together for a day with some great solutions and customers. It’s about understanding the ecosystem there a bit better and we plan to grow over the years to come.”
Since the launch of DPW in 2019, the conference has grown from strength to strength. In its October 2023 edition, DPW welcomed 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home.
Procurement leaders have an outsized role to play in reducing Scope 3 emissions on the road to net zero.
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Chief Procurement Officers (CPOs) have been noticeably elevated within the business structure over the past few years — rising from pen-pushing back office functionaries to “orchestrators of value”.
CPOs are expected to deliver on more than just cost; supply chain resilience, agility, process innovation and, of course, ESG targets all increasingly fall within the realm of procurement, as company leadership increasingly looks to the function as a source of innovation, efficiency, and risk-avoidance. And, there’s no mistaking the risk that lies in failing to adequately address ESG targets. As Matthias Gutzmann, founder of DPW, wrote in a recent article for Fast Company, it’s “no secret that consumers are becoming increasingly conscious of not only what they’re buying, but who they’re buying it from, and how ethical those companies are.”
Unrelated to sustainability targets, but widespread boycotts levelled against Starbucks for their association with the Israeli government’s ongoing genocide of Palestinians, union busting practices across the US, and also anti-union practices as a direct result of pro-palestinian sentiment expressed by the SWU, have been a not so insignificant part of the coffee giant’s losing billions of dollars as its share price lurched downwards throughout December. Starbucks isn’t even on the BDS (Boycott, Divest, Sanctions) list, and still shed 7.4% of its share price in December.
It’s a high profile example, and not a typical example of a failure to comply with ESG goals (although “don’t be associated with a right wing government’s efforts to ethnically cleanse over 30,000 people” feels like it should probably make it onto most organisations’ to-do list) but the consequences are a clear reminder of the changing landscape that awaits organisations that fail (or just don’t want) to act ethically.
Gutzmann also notes that, in addition to hurting revenues, “These preferences also trickle down into employee attraction and retention, as Gen Z workers stepping into the workforce actively seek out organisations that share their values.” The result is the public actively favouring what he calls “purpose-driven” organisations.
However, there’s a significant challenge inherent in behaving with more ethical integrity and purpose as an organisation: while promoting ethical practices and environmentally friendly operations within your organisation is challenging enough, it pales in comparison to the task of ensuring such standards are adhered to throughout the entire sour-to-pay process.
For many companies, fixing their supply chain—whether that means tracking and curtailing Scope 3 emissions or distancing themselves from suppliers associated with deforestation or human atrocities like modern slavery—falls firmly at the feet of the CPO. Gutzmann notes that “While the transition to becoming a purpose-driven company requires buy-in from everyone within an organisation, perhaps no executive has had to take on more new responsibilities than the [CPO].”
If 90% of an organisation’s greenhouse gas emissions, for example, originate in its supply chain—along with other sources of environmental impact like resource and water consumption, human impact, land use, and more—then understanding and taking steps to curtail the negative impact of that supply chain is an essential part of a CPO’s role.
Gutzmann argues that CPOs will need to become “ethical sourcing enforcers”, adding that the benefits will often outweigh the cost. Not only will CPOs driving genuine ESG reform in their operations avoid potential risks from an alienated customer base but, he adds, “when asked if they would be willing to pay more for a product they could be sure was ethically sourced, more than 83% of consumers said yes. And we’ve seen that companies who prioritise ethical sourcing (ranging from outdoor clothing brand Patagonia to the ice cream giant Ben & Jerry’s) are rewarded with massive praise from consumers while also boasting impressive bottom lines.”
N-SIDE VPs Amaury Jeandrain and Charlotte Tannier discuss their organisation’s partnership with Sanofi and look ahead to a brighter future.
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Transparency. Good partnerships need it to survive.
For N-SIDE and Sanofi, it has been a key ingredient to what has made the partnership successful for the past eight years.
Since late 2015, N-SIDE has established and built on a strategic partnership with France-based pharmaceutical company Sanofi, aimed at optimising the firm’s clinical trial supply chain. The partnership helped digitalise Sanofi’s clinical supply chain while driving greater performance and waste reduction.
Harnessing efficiency
N-SIDE is a global leader in increasing the efficiency of life sciences and energy industries by providing software and services that optimise the use of natural resources, facilitating the transition to a more sustainable world. Founded in 2000, N-SIDE has built deep industry knowledge and technical expertise to help global pharmaceutical and energy companies anticipate, adapt, and optimise their decisions. In the life sciences industry, N-SIDE reduces waste in clinical trials, leading to more efficient, faster, and more sustainable clinical trials.
Amaury Jeandrain, Vice President Strategy of Life Sciences at N-SIDE, has witnessed first-hand the development of the partnership since he joined the company in January 2016. “Very quickly, the value of risk management and waste reduction was perceived internally and this partnership ended up growing to become one of our largest. Today, Sanofi is the company at the forefront of a lot of the innovation co-created with N-SIDE.”
Amaury Jeandrain, Vice President Strategy of Life Sciences at N-SIDE
Pharmaceutical companies of varying sizes use N-SIDE solutions to avoid supply chain bottlenecks in their clinical trials, decrease risks and waste, control costs, reduce time-to-market and speed up the launch of new trials. N-SIDE’s focus is on four key pillars to bring high levels of efficiency into Sanofi’s clinical supply chain: best-in-class supply chain, people, analytics and innovation.
Charlotte Tannier, Vice President of Life Sciences Services at N-SIDE, adds that the key differentiator is the transparency between her organisation and Sanofi. “We trust each other and know that we can be fully open with them,” she explains. “We like to build new things together and co-develop innovative solutions.”
Charlotte Tannier, Vice President of Life Sciences Services at N-SIDE
Teaming with Sanofi
Having defined a clear route to success through the Sanofi partnership, Amaury is keen to point out that the relationship has acted as something of a catalyst for future business collaborations with other companies. “There are a lot of good practices that were initiated with Sanofi that now became a standard in our industry,” he discusses.
Looking ahead, the future of the partnership looks bright and is showing no signs of slowing down. Charlotte explains that the next step is all about “integration.” “For the moment, we have multiple teams and departments that are using the N-SIDE solutions, and many other software are used as well within the organisation. The focus in the short term will be to enable a unified IT landscape and environment,” she reveals. “The objective will be to be fully integrated and to increase the impact of the data they own. Because we believe, with Sanofi, that the way forward is through data. We are also planning to help Sanofi leverage more of the data that we’re generating together to increase its impact.”
As technology continues to evolve and organisations become even more digitally mature, partnerships built on transparency and trust will be in demand. N-SIDE and Sanofi already have that head start.
In this innovative partnership, the whole is greater than the sum of its parts as the two companies focus on taming tail-spend with an on-demand platform with embedded change management.
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Businesses have been leaving money on the table for years. For most organisations, (indirect) tail spend flies under the radar because of the large number of lower-value transactions, a fragmented supply base, and a poor user experience. This results in process inefficiencies and lost savings opportunities that can be eight to 13 percent higher than with more competitive sourcing.
Simfoni and Kearney set out to solve this problem, joining forces on solutioning tail spend management. The partnership pairs Kearney’s rich heritage and expertise in procurement transformation and change management with Simfoni’s composable analytics and spend automation technology. The result is a comprehensive global delivery model that significantly improves tail spend management, which until now has been a major problem for large and smaller organisations alike.
“We started our journey over three years ago,” says Stefan Dent, co-founder of Simfoni. “It takes some time to form a bond. You get to know one another working together on client engagements and then you realise that the relationship is really working, so you double down on the commitment.”
Simfoni helps businesses “see spend differently” leveraging data analytics to gain a deep understanding of user needs across everyday ‘tail spend’. Founded in 2015, Simfoni is a leading provider of tail spend, spend analytics, and e-sourcing solutions for large and midsize businesses around the globe. Simfoni’s platform uses machine learning and AI to accelerate and automate tail spend management, saving time and money. Its solution quickly ingests and organises complex data to uncover opportunities to optimise tail to higher value spend. Simfoni emphasises rapid value delivery through on-demand spend automation solutions that are operational in weeks rather than months.
Remko de Bruijn, senior partner at Kearney
The Kearney–Simfoni partnership delivers a unique and powerful proposition, combining Simfoni’s digital tail spend solution with Kearney’s know-how and ability to launch a transformation and unlock the promised value, says Remko de Bruijn, a senior partner at Kearney. “There are many digital procurement solutions around, but frankly, many of them aren’t delivering the promised value, typically because of challenges with user adoption and change,” he says. “Kearney continuously assesses solutions in the market, with one of our other partners, ProcureTech, and together, we concluded that Simfoni is leading in tail spend. This is how we found each other.”
Kearney is a leading global strategy consulting firm founded in 1926, with more than 5,700 people working in more than 40 countries. The company works with more than three-quarters of the Fortune Global 500 as well as with the most influential governmental and nonprofit organisations. Kearney is a partner-owned firm with a distinctive, collegial culture that transcends organizational and geographic boundaries—and it shows. Regardless of location or rank, the firm’s consultants are down-to-earth and approachable, with a shared passion for doing innovative client work that realises tangible benefits for their clients, in both the short and long term.
“We see Simfoni as a powerful solution to realise savings in indirect tail spend. It’s about not only data and spend automation, but also the customer experience,” De Bruijn says. “This is crucial when dealing with everyday spend as most users are non-procurement professionals.”
Kearney aids businesses in implementing Simfoni’s solution quickly, mitigating risks associated with unmanaged spend and vendors. “The attractive thing about Simfoni is that the solution manages tail spend—optimising both spend and vendors—with the savings funding the digitisation. It’s a tail spend solution that delivers a comprehensive service,” De Bruijn says. “Simfoni will even pay the tail suppliers with Simfoni becoming the ‘One Vendor’ for the tail, which creates additional benefits in accounts payables and working capital.”
Simfoni and Kearney both operate globally, which is important since their customers often operate in multiple regions around the world. “It’s a very interesting and powerful proposition,” De Bruijn says.
Stefan Dent, co-founder of Simfoni
Simfoni designed its tail spend platform from the ground up. The company founders came from the procurement domain, having worked in a variety of procurement leadership roles and at other procurement technology providers. “Let’s face it, existing solutions never solved tail spend, which accounts for around 80 percent of your vendors and transactions and around 20 percent of spend value,” Dent says. “Until now, the only options were BPOs, where you effectively outsource your tail to be managed by humans in a lower-cost country, or you use self-service bidding platforms. These solutions deliver some value, but it’s like putting a plaster on a wound. You never properly cure the problem.”
Simfoni’s platform is unique in that it is first and foremost a software-as-a-service (SaaS) solution with integrated buying services and digital procurement content components that connect with a client’s existing systems, or Simfoni can operate autonomously. Dent says that’s not even the best part. “The user experience is the most important element because, as Remko pointed out, most tail spend users are not procurement professionals,” he says. “Our users are in R&D, IT, plant operations, or marketing. They want an intuitive, easy-to-use solution to source and buy goods and services to support the everyday needs of their business. This is where traditional eProcurement systems fail.”
Dent says Kearney is an ideal partner being a trusted advisor to many of the world’s largest organisations. Kearney’s expert knowledge of procurement and transformation are a vital part of the offering. “Kearney’s input and expertise is crucial as Kearney helps our clients scope their tail spend program and update their procurement operating model while Simfoni frees up resources, allowing the client to focus on higher-value activities,” he explains. “At the end of the day, technology alone doesn’t solve tail spend. It’s about change. Kearney helps our clients make that digital shift. That’s why our partnership is so powerful because together we provide a comprehensive change and a digital solution as a package. The opportunity for our clients to finally control and optimise tail-spend is huge.”
Linda Chuan, Chief Procurement Officer at Box, discusses the value of delivering effective and long-lasting change management in procurement.
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Being at the forefront of change requires a specific type of person – it’s not for everyone.
But for those that are equipped to deal with the volatile and at times, disruptive, nature of change, that’s where the rewards can be uncovered.
Knowing this all too well is Linda Chuan. She is a seasoned sourcing and procurement operational excellence executive with a public accounting background and a strong ability to execute from vision and strategy. Her innovative experiences with organisations large and small have culminated in a unique, but practical end-to-end view and understanding of business processes. Chuan’s approach to problem-solving is holistic, mixed with a blend of discipline, creativity, agility and resilience. She has demonstrated successes in her execution and delivery with real results time and again, while also leading successful transformational digitisation strategies.
Procurement’s transformation
The industry she serves has undergone quite an evolution in recent times. Having transformed from a back-office function into a dynamic, exciting, enterprise division at the forefront of change. Procurement and its professionals have been on quite the journey in recent times. As such, Chuan explains that the space is, in fact, so unrecognisable that even its definition has changed. “Procurement started out as purchasing for primarily manufacturing companies decades ago,” she discusses. “Then it evolved from purchasing to procurement where the practice and the profession required more skills around understanding contract verbiage and how the commercial terms would impact the business. There was a little bit more skillset required, legal terms, understanding contracts, all the way to what we know today as strategic sourcing.”
Fast forward to 2020’s Covid pandemic and procurement was forced to shift again amid significant disturbance to supply chains. As a result, procurement was swiftly elevated to the c-suite and became front of mind for most CEOs globally as businesses looked to tighten their belts while urgently finding alternative methods of supply.
“Following Covid, I think we, as procurement professionals, are now mandated to be even more than strategic sourcing and add value to the company,” affirms Chuan. “We’re asked to look ahead and think about the macroeconomics as well as the microeconomics and how it could impact the company and get that translation to direct company impact earlier. This is all while being able to help either prevent large risks or promote opportunities within the company so they can then maximise what’s happening out there in the marketplace versus where everyone was reacting to what has already happened and trying to be prepared for what was coming.”
Tech disruption
Disruption has meant procurement was propelled to become even more strategic and forward-facing following a recent surge of black swan events as technology takes a firmer grip on the space. “The whole profession has evolved, especially over the last 10 or 15 years, where we’re becoming increasingly more strategic and important to a company.”
The company Chuan serves is a cloud content management company that empowers enterprises to revolutionise how they work by securely connecting their people, information and applications. Founded in 2005, Box powers more than 115,000 businesses globally, including AstraZeneca, JLL, Morgan Stanley, and Nationwide. Headquartered in Redwood City, CA, Box has offices across the United States, Europe and Asia. Chuan joined Box over four and half years ago and was recruited to help with establishing the firm’s procurement function and building it from the ground up.
“Any engagement or relationship with a third-party provider, whether it’s buying widgets, purchasing services or even SaaS across the entire company is under my scope,” she explains. “Box has grown globally to reach new regions such as Japan and Poland to UK and Australia. We’ve continued to grow even throughout the pandemic. It’s my third role to establish and build out a sourcing and procurement organisation from the ground up. I find that to be so rewarding and every company’s a little different. What might’ve worked in my previous roles may not work at Box. I love having to tailor and think about which processes and what systems could work that would fit each company’s specific and unique culture, executive level preferences as well as the employees. It’s very exciting.”
Blank canvas
For Chuan, her passion is to make things as easy as possible for the end user. She likes to think about a procurement organisation as a service firm. “We’re like a small entrepreneur company within an enterprise,” she tells us. “Our customers are our internal employees. As the company and the employee base grows, the customer base increases too. To me, it’s really imperative that we think about the user experience because every company has policies to check off, but who really ensures that we are compliant to those policies? A lot of other larger companies find it’s easier to make the policy a mandate where employees must follow, but I find that with high-tech companies, it’s more of a case of “influencing” rather than “mandating” in that kind of environment.
“In order to establish more of a centralised process where all of the employees would have to come through this one system and one intake, it has to be so user-friendly or else people are not going to want to come to you. If you make it easy for them and design the process in such a way that the policy is already incorporated, then employees will want to utilise the process. It should feel like they’re just going through the process, but they’re walking through the actual compliance policy and ensuring that we’re doing all the right things to protect the company, but they shouldn’t have to feel the burden of it.”
The Box Advantage
According to Chuan, unless she can show her people a new process or system that’s guaranteed to be more efficient, she understands there will be a degree of reluctance to accept change initially. “I’m already thinking about the whole change management programme at the beginning of when I need to select a solution, especially if there was an RFP involved, rather than waiting until we’ve selected a solution and are in the implementation phase. To me, that’s too late,” she explains. “Change management happens when a project has been approved for you to go find a solution or when the project has been initiated by your senior executives through an investment committee meeting or via a software review committee. That’s where change management actually starts.”
Chuan is passionate about harnessing a positive company culture. She stresses within Box operating with a mentality of collaboration, transparency and inclusiveness holds the key to success. Chuan explains that one of her best strategies is to imagine herself as an owner of a company as it leads to better decision-making. “It’s about always trying to think about doing the right things by the right people,” she discusses.
Secret sauce
“The culture is so special and it’s truly about walking the talk versus just talking the talk. It’s about making that culture real and living every single day like our two founders, Aaron Levie and Dylan Smith. The culture itself makes it easy to collaborate and build that relationship and that trust with my fellow employees, knowing that the procurement sourcing organisation is there to help protect them and make the company better. Doing it together is so much easier than trying to push through by yourself, and I call it with every deal that ‘it takes a small village’. We have a really, really good relationship with our legal department and with our vendor trust department. I am enjoying a level of engagement and utilisation of my function more than any other company I’ve been blessed to be a part of. The culture at Box is our secret sauce.”
Given the speed at which the procurement function is shifting, being proactive to the latest trends in transformation could be the key between success and failure. Indeed, one of the most highly anticipated innovations of the past few years ChatGPT has captured the imagination of procurement professionals globally. The race to explore the technology and examine how the natural language processing tool could be introduced into processes is already underway. However, its arrival brings with it fresh fears that AI is here to replace humans.
Future-facing
According to Chuan, that couldn’t be further from the truth. “I don’t see it as taking jobs away, I see it as improving our job and work life,” she explains. “Most people don’t want to do those mundane, low-level data entry, tactical tasks anyway. But if you don’t have people or the right system checking that the data going in is of good quality, then you can’t count on the reporting and the analytics on the backend. But the problem is that people don’t want to do it. Wouldn’t it be perfect to have a replacement with AI, robotics and machine learning that could do all of the things that people don’t really want to do anyway?”
Looking ahead
Having said that, Chuan is clear that there must always be some form of human influence and oversight over AI. One of procurement’s biggest challenges in 2024 and beyond is making new tech work for each respective organisation. Chuan believes procurement, and indeed the world, isn’t to be ruled by technology, but instead used as a tool. “There has to be some kind of monitoring and human judgment to QC/QA the results,” she says.
“I don’t think we’re at the point where machines can replace judgemental thinking. I think we need to have an eye on ensuring we’re doing the right thing ethically by people and making sure that we’re using technology responsibly. Let’s say we do all of that, the increase in the level of job productivity that AI could bring to many people should outweigh people’s fears. I don’t think we should be fearing it. I think we should be looking at it from an analytical and strategic view and get excited about the prospect of having all the time to be more innovative and forward-thinking. To me, that’s where the fun and rewarding work is.”
Hear more about Linda Chuan’s passion for delivering change management in procurement in our CPOstrategy Podcast.
This issue’s Big Question explores whether procurement would be better prepared should a similar situation occur.
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COVID-19 affected everyone in different ways.
It caused death, illness, chaos and disruption the world over. It shut down airports, overwhelmed the NHS and left our streets empty. With March 2024 marking four years since the UK announced its first national lockdown, how ready would procurement and our supply chains be in the event of a similar scale this time around?
To go forward, unfortunately, we must look at the chain of events last time around.
Having been declared a global pandemic on 12th March 2020 and with cases of coronavirus accelerating to uncontrollable levels, many businesses’ supply chains collapsed. When the pandemic hit, businesses were left footing the bill for billions of pounds worth of unsold goods, causing inventory-to-sales ratios to rise high.
As a result of lockdowns, organisations were left with no choice but to cut their activity or shut down entirely for a brief period as guidance continued to change at little to no notice. As such, production was halted in factories across the world causing mass layoffs and redundancies across the majority of industries, particularly in manufacturing and logistics, resulting in a reduction in shipping which affected delivery times globally.
Consumer demands also shifted significantly. The demand for personal protective equipment (PPE) as well as the likes of toilet paper and pasta rose dramatically. There was an increase in office furniture amid a surge in demand in remote working. This, alongside the likes of government help such as furlough, helped enable a surge in demand for e-commerce as consumers bought online in record numbers. The shift in demand for goods led to a reduction in experiences such as attending events, eating at restaurants or going out to pubs.
In order to meet this increase in demand, factories pumped out goods quicker than ports could handle them. US ports were full of exports from Asia with too small of a workforce to unload them and too few truck drivers to transport the goods. While ports were full, compounding the issue was a labour shortage, especially truck drivers. And talent remains a concern to this day to procurement and supply chain.
But COVID-19 is only one of procurement’s fires. There’s been the Suez Canal disaster, wars in Ukraine and Israel and inflation concerns to contend with too.
So if the worst were to happen and another ‘black swan’ event was to take place, what lessons has procurement learned?
As a result of the generative AI boom, Jack Macfarlane, Founder and CEO, DeepStream, believes that the industry is in a much stronger position to overcome a future pandemic. “It proved that procurement needed to brush up on its ability to adjust to black swan events swiftly by investing in the right technology and training for the industry to respond to sudden challenges and changes,” explains Macfarlane. “With the growing use of generative AI, the industry is now in a much stronger position to contend with a future pandemic. Generative AI can scrape vast datasets regarding global trends, using the data to predict shortages, price fluctuations and supplier risks before they happen.
“Regardless of the industry you’re in, procurement leaders should always focus on ensuring the right policies are in place to prevent declining quality control in a future black swan event.”
Omer Abdullah, Co-Founder and Chief Commercial Officer at The Smart Cube, agrees that procurement finds itself in a more secure place than that of four years ago. “Procurement is undoubtedly readier than it was prior to the COVID-19 pandemic. CPOs and their teams have learned where potential value drivers are, and they also understand supplier relationships and supply chain intricacies more intimately,” he reveals. “Procurement has also moved further along the digital spectrum. Organisations have tools at their disposal to operate effectively, and on a dispersed basis, should a similar event take place. Additionally, there are now far more risk management solutions in place versus before the pandemic – allowing practitioners to identify problems, and potentially risky situations, before they arise. Add to this more diversified supply chains and established alternative sources for essential categories, and the function is far more prepared than pre-2020.”
However, Abdullah went on to explain that while “no one would be absolutely ready for another unexpected pandemic”, he insists the industry did learn lessons from COVID-19. “It must be noted that there’s still a recency effect at play – procurement professionals tangibly remember the pandemic’s impact,” he explains. “As time progresses, though, this may change but for now, the industry knows how to operate if a comparable scenario were to unfold soon.”
Bindiya Vakil, CEO and founder of Resilinc, believes the pandemic has showcased how better prepared companies are for the next global disruption. “Fortunately, the COVID-19 pandemic taught businesses some valuable lessons. Not nearly as many companies are flying blind in the face of disruption,” explains Vakil. “Many organisations learned that having visibility into their entire supplier network is the foundation for mitigating disruptions. Mapping their supply chain down to the part-site level and then using AI-powered technology to monitor it 24/7 for potential threats gives procurement leaders an early-warning system with actionable insights to make mitigation plans within hours.”
While Vel Dhinagaravel, CEO and President Beroe Inc, reveals that COVID-19 “took the mask off” procurement and exposed the true character of teams. “Some were much more partnership-oriented and some a lot less. Some of these memories endure and will either help or handicap their responses to future disruptive events,” Dhinagaravel reveals. “During 2020-2022 as different countries and regions were in varied states of lockdown there were tremendous constraints on supply chains. As a result, procurement got an opportunity to be part of discussions around product mix optimisation and product pricing which previously had been largely off limits to them.”
He adds that while the future is uncertain, he believes the function is in a healthier position to thrive should the worst happen again. “Post-pandemic, these relationships have endured, and we have also seen these teams consciously building agility and resilience into their operating models and supply chain,” he discusses. “They’ve been using data and analytics as key levers to get visibility of their supply chain and suppliers – identifying points of failure, assessing scenarios, and proactively running simulations to develop diversification strategies. While these actions don’t give procurement a crystal ball to predict the next disruptive event, it puts them in a much better position to be able to handle another pandemic or major supply chain shock.”
And Betsy Pancik, Senior Vice President at Proxima, says that the pandemic was procurement’s “time to shine” with business leaders recognising the importance of a robust procurement function to keep business running smoothly. “COVID-19 caused major supply shortages, which drove price surges and quality issues – many procurement teams had to quickly mobilise capability and capacity to support immediate business needs,” she explains.
“Some companies learned this the hard way by not having the right processes and teams in place, which led to insufficient inventory, spend increases, and strained supplier relationships. Many companies realised the need for alternative suppliers to prevent these issues in the future and started proactively seeking additional sources of supply. Others realised the need for emergency buying procedures, systems, and processes that enable quick action, automated buying, supply chain visibility, and investment in talent – all of which will help businesses respond in a more organised and robust way if a similar situation were to happen again.”
In truth, procurement teams learned a lot from the events of March 2020. Procurement and supply chains can’t be complacent. The function can’t afford to let the mistakes of the past define its future. Supply chains must have alternative methods of supply and Chief Procurement Officers must be agile and ready to respond. Procurement can’t drop the ball and must stay ready.
Edmund Zagorin, Founder of Arkestro, discusses his company’s rise as a predictive procurement orchestration platform.
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“What if there was a better way to compare quotes from suppliers?”
This question led Edmund Zagorin down a road of discovery which culminated in turning an idea into a start-up.
While working as a procurement consultant, Zagorin observed how much time his sourcing teams spent building Excel pivot tables. The problem? Category experts needed to identify potential errors in supplier submissions at the item level before an award scenario could be properly evaluated. Together with childhood friend Ben Leiken, who had risen to become an engineering and product leader at SurveyMonkey, the idea was to find a way to automatically pre-populate text in a sourcing project with little to no manual data entry required from procurement users of suppliers. Leiken had seen firsthand the impact that so-called “smart defaults” could have on survey completion. And Zagorin knew that in procurement, more completions would mean more supplier offers, which could yield better commercial outcomes for the procurement team. Arkestro, then Bid Ops, was born.
Studies show that when procurement is able to predict a plausible range of commercial outcomes ahead of a supplier offer, there is enormous leverage created when the buying entity names the price. Summarising the past decade of research, Lewicki et al.’s 2007 “Essentials of Negotiation” states that “…whoever, the buyer or the seller, made the first offer… determined the final selling price, with higher final prices when a seller made the first offer than when a buyer made the first offer.”
For this reason, Arkestro customers began delivering material higher cost savings outcomes than traditional RFPs and RFQs, a fact that caught the attention of Ariba co-founder Rob DeSantis. Together, Zagorin and DeSantis brought together an experienced management team, led by IBM and Ariba alum Neil Lustig as CEO. Lustig’s experience as CEO of Vendavo, a predictive pricing company used by sell-side teams to achieve better negotiated outcomes, made him ideal to scale Arkestro into a global juggernaut.
Edmund Zagorin, Founder, Arkestro
Today, Arkestro is the leading predictive procurement orchestration platform that enhances the impact of procurement’s influence, especially for large manufacturing enterprises across any procurement activity and spend category that involves collecting a quote from a supplier. Arkestro turns the traditional procurement process on its head: instead of the supplier creating a quote or proposal and then a procurement analyst using competitive offers and benchmark data to decision the desirability of that offer or action an approval, Arkestro customers use a predictive model to benchmark a potential quote before contacting suppliers, putting procurement in a position of leverage to either ask for their desired outcome using an AI-generated Suggested Offer or generate an Instant Counter-Offer to any quote.
Arkestro then helps customers persistently monitor the changes in quoted price for this item across all procurement activities, tracking trends and changes and helping teams proactively uncover the optimal procurement configuration for each item and basket with respect to timing, geography, quantity, lead time and other attributes.
By embedding game theory, behavioural science and machine learning models directly into the procurement process, Arkestro enables customers to dramatically accelerate cost reduction projects, often with existing preferred suppliers and attain their best available cost outcome for every unique item more frequently and at greater scale across their spend. This predictive procurement approach is especially helpful for technical procurement categories such as highly engineered components, materials and capital equipment, as well as categories like metals, chemicals, food ingredients, MRO, packaging, logistics and even IT.
Enterprises who are on a journey to create sustainable and antifragile data quality for their procurement function are turning to Arkestro as the predictive approach eliminates the two manual steps that tend to introduce errors into item-level identifiers: the step where the supplier creates a quote, and the step where procurement analysts have to validate, correct, give feedback and approve it. By using a predictive model to generate and validate supplier offers, Arkestro offers a continuous improvement path for enterprises whose digital procurement journey includes cleansing item-level data to create a true item-based “data foundation.”
Transformation journey
And since its founding in 2017, Arkestro has been on quite the transformation journey. The company has expanded rapidly and scaled its product – as well as for spend categories and industries served – globally. In a little over half a decade, Zagorin, Leiken and their team have created a true enterprise grade AI infrastructure platform that can be embedded into the likes of spend management giants SAP Ariba or Coupa or used as a standalone database and application.
Despite significant success in a relatively short space of time, Zagorin is keen to stress that his initial vision was to solve a problem that he was also experiencing in the market. “Our growth has corresponded to a great degree with a widening of the aperture of where we feel predictive technologies can make an impact for procurement teams,” he discusses. “I think one of the other things just from a paradigm standpoint is that procurement processes involve a lot of manually created data. There’s a lot of data entry on the supplier side, procurement side and on the stakeholder side throughout the process. Every keystroke in every process introduces the possibility of human error.”
Predictive procurement is a new approach that suggests the data before a human user enters it. What Arkestro has introduced is the idea of predictive and working with customers to apply that at different stages of the procurement process through AI. “One of the things that’s also been interesting, and you’ve seen this in other areas of AI, is that you can cross a threshold where at some point in the model it gets good enough that it really provides exponentially more value as it’s being used,” he says. “As opposed to software, which traditional software degrades over time, it gets stale and the interface feels clunky. As new interfaces come out, AI has almost the opposite dynamic where it actually gets better. It’s smarter by itself just by people using it. That’s also been pretty exciting to see.”
Procurement’s evolution
Indeed, the procurement space is in a state of flux. Amid significant transformation driving the function forward, it has never been such an exciting time to be involved in the industry. The rise of AI and machine learning is having a seismic impact with there also being hopes that new technology could reduce the need to bridge talent gaps.
“If you asked five years ago what’s holding procurement back from digitally transforming the operation and living out your full potential, I think a lot of procurement professionals would’ve said how hard it was to hire,” Zagorin explains. “People were saying: ‘Oh we have data quality issues where it’s really hard to actually know what we’ve spent, what our spend per supplier looks like for our core geographies, let alone what we paid for each individual item. We went out and bought a bunch of digital platforms and we’re struggling to gain adoption which is related to the data quality issues.’ This is what I heard from executives when I was working in procurement. Because traditionally, if you have a process and it’s not being consistently used, then it’s not going to accurately represent the most important attributes or business logic of the data that’s moving through it.”
Despite the positive introduction of tech innovation, procurement has also had its challenges. Supply disruption as a byproduct of COVID-19, wars in Ukraine and in Israel as well as inflation concerns, it is fair to say the function has never been more talked about in the C-suite.
“Boom, there’s the next wave of Covid, or suddenly there’s a war somewhere in the world,” he shares. “It has felt like there’s always something and it really creates context switching for procurement teams which is stressful, plus being bad for productivity. This is especially the case for digital transformation projects in procurement, and it’s also demotivating because it makes people feel like they’re not making progress. This then means that the length of the project elongates and you have this kind of stuck-in-the-mud feeling that it’s hard to get quick wins and generate momentum. That’s what customers are thinking about as they are looking in the market to find a true partner not just for their digital journey, but for their AI journey.”
Given the speed of procurement’s evolution, there are voices that believe the function requires a rebrand. Gone are the days of procurement being regarded as a back-office function hidden away out of sight, today it stands as an exciting, dynamic force at the forefront of innovation. “I live in California where job titles are a little bit looser generally,” explains Zagorin.
“If we look at procurement needing a rebrand, the big challenge that I see with procurement is that the structure of a lot of these categories doesn’t necessarily correspond with either the activities associated with them or with the relationships with the suppliers within those categories. What we have in procurement with ‘category management’ is we’re frequently asking procurement professionals to be a jack of all trades and master of none within their categories. Perpetual ‘crisis-mode’ is not a recipe for letting up-and-coming procurement professionals develop the category knowledge and domain expertise that are traditionally necessary.”
Procurement’s bright future
Looking ahead, Zagorin believes there has never been a better time to be working in procurement. “The profession has a lot to offer, and it really is this huge engine of value creation at most big companies,” he explains. “Arkestro serves enterprise manufacturing companies typically with multiple plant locations which buy at both the corporate and the plant level creating a lot of item-level data quality issues. What we’re seeing is the ability for companies to get live on Arkestro in a matter of days and often deliver a payback period for their entire solution costs in a matter of weeks.
“If you look at deployments of enterprise technology five years ago, that’s a stark difference in terms of what procurement’s promising versus what it’s delivering and the time-to-value. We have a new generation of startups, from intake to tail spend to what Arkestro does, more on the strategic side and or on technical procurement categories and direct materials, often starting with a bill of materials and handling all the back-and-forth with the suppliers up to allocation, awarding and the purchase order. You have this cohort of startups that’s just getting bigger and more people are using us to run large physical manufacturing operations. There’s not a lot of direct competition in the space of these growth-stage startups.
“I think what’s going to happen is more and more companies are going to say if it makes business sense and we think there’s tangible value in doing it, then let’s find a way to test and learn. Let’s find a way to try it out to implement it in one geography or for one business unit or category and just see how it works. Five years ago, it was always easy to say we’re too busy or we have other stuff going on. What’s changing today is if you’re not testing and learning constantly from new technology, you’re going to miss out because the stuff that’s happening right now is world-changing.
“Generative AI and novel technical approaches to on-demand superintelligence are going to be as impactful to many enterprises as the development of the internet, not to mention human society at large. The people who are playing around with it and staying curious and running experiments are going to create a lot more value. They’re going to have a lot more fun, and they’re going to build great teams and organisations that lay the groundwork for the next generation of procurement professionals.”
Changing requirements, shifting demographics, and new technologies are conspiring to create a procurement talent shortage.
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Two of the biggest challenges facing procurement leaders are recruitment and retention. Staffing issues were identified as one of the biggest risks facing procurement in the next two years by Amazon Business’ 2024 State of Procurement Report, as the procurement function “broadens in scope while facing staffing shortages”.
It seems as though the more critical procurement becomes to the modern enterprise, the more the cracks in the talent pool begin to show. With increased technological adoption and a growing emphasis on strategic operations (compared to a traditional transaction-focused approach) in the procurement function, solving the talent shortage is more critical than ever.
As we’re still in early 2024, we’ve put together the top five factors driving the talent shortage, as well as how procurement leaders can address them in order to capitalise on the opportunities in the industry and meet the strategic objectives of the business as a whole.
1. Digital transformation
Ironically, the very trend that’s driving the rise in procurement’s fortunes is also one of the biggest factors fueling its talent shortage. As digital transformation reshapes the procurement function from top to bottom, it also means that the skills necessary to succeed in procurement roles are changing. Even a few decades ago, a procurement job was a mixture of relationship management and sending invoices. Now, there’s AI to grapple with, big data analytics, and an expectation that the department will be a key strategic driver of efficiency, sustainability, and supply chain resilience. The skill sets that make a successful procurement team today aren’t the same as they were even a few years ago.
How to fix It: Education and development should be at the forefront of anyone’s mind looking to build a successful procurement function. Upskilling and growing the team’s knowledge base is almost always more cost effective than hiring externally, but you should also know when to look beyond the department to fill a talent shortage, even if that just means sniffing around the IT department for anyone not nailed down.
2. Competition (internal and external)
If (almost) every procurement team is short on staff (well, 86% of them, according to Amazon Business), then it’s no surprise that competition for top talent is fierce. Salaries are rising, and the fact the talent shortage is affecting departments other than procurement means that procurement is in competition, not only with other procurement teams, but with other departments in its company for talent and the money to pay that talent.
How to fix It: Smaller firms without the resources to compete might consider outsourcing their procurement functions, engaging third parties like a business might engage a legal team or a management consultancy.
3. Messaging and awareness
Or lack thereof… Seriously, procurement may be the exciting new frontier of digital transformation and strategic optimisation, but traditionally the department has largely existed as an afterthought—a place where purchase orders go to be rubber stamped. The nature of the role may be changing, but perceptions are harder to shift. If the preconceived notion is that procurement is a stodgy, backwards profession, then it’s unlikely to attract the best and brightest graduates, let alone funnel MBAs into a procurement-specific pipeline early on in their education.
How to fix it: Take a leaf out of the broader supply chain discipline’s book and go on a two-pronged charm and educational offensive. By working with educational institutions and recruiting heavily from adjacent industries with transferable skills (increasingly easy to do given the increasingly digital-first nature of the discipline), new talent can be enticed into the procurement space and developed from there by existing veterans.
4. Demographic shifts
Tied into Number 5, the natural changing of the guard is a large part of what’s ushering in a more discerning labour force. It’s also seeing Boomers and Gen X either exit the workforce into retirement or be promoted up into senior management, where the skills that made them an asset to the company on a day-to-day basis are less important to their roles.
Also, as Millennials age up towards middle management there aren’t as many members of Gen Z entering the workforce to replace them. It’s the same further up the chain as the populous Baby Boomers are replaced with the relatively sparse Gen X.
How to fix it: One way to encourage a smoother transition from one generation to the next—especially in an industry where relationship management plays such a huge role—is to encourage mentorship and development aimed at transferring skills and key knowledge from senior staff to lower (even entry level) positions.
5. The Great Resignation
Sparked by the COVID-19 pandemic, as well as a general rise in pro-labour sentiment across the economy at large, the last few years have seen a spectacular rise in employees quitting the roles that couldn’t be bothered (or afford) to pay them enough or treat them fairly. The consequences for mismanaging teams are much higher in a world where the stigma over changing roles regularly for better pay, hours, and working conditions has more or less evaporated.
How to fix it: It should be obvious, but people keep quitting their jobs, so the message must not be getting through. The age of pizza parties and casual Fridays are over. Employees expect more from their employers, whether in terms of wages, benefits like healthcare, work-life balance, and other meaningful contributions to quality of life. In addition to benefits on paper, fostering positive cultures, creating opportunities for development and salary advancement are all a big part of not only attracting new talent but keeping it as well.
Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital…
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Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital Service, in the Office of the OCIO, her team’s mission is to drive a tech transformation at the USDA. The goal is to better serve the American people across all of its 50 states.
Welcome to the latest issue of Interface magazine!
Welcome to a new year of possibility where technology meets business at the interface of change…
“We knew that in order for us to deliver what we needed for our stakeholders, we needed to be flexible – and that has trickled down from our senior leaders.” Arianne Gallagher-Welcher, Executive Director for the USDA Digital Service reveals the strategic plan’s first goal. Above all, the aim is to deliver customer-centric IT so farmers, producers, and families can find dealing with USDA as easy as using an ATM.
BCX: Delivering insights & intelligence across the Data & AI value chain
We also sat down with Stefan Steffen,Executive Leader for Data Insights & Intelligence at BCX. He revealed how BCX is leveraging AI to strategically transform businesses and drive their growth. “Our commitment to leveraging data and AI to drive innovation harnesses the power of technology to unlock new opportunities, drive efficiency, and enhance competitiveness for our clients.”
Momentum Multiply: A culture-driven digital transformation for wellness
Multiply Inspire & Engage is a new offering from leading South African insurance provider Momentum Health Solutions. Furthermore, it is the first digital wellness rewards program in South Africa to balance mental health and physical health in pursuing holistic wellness. CIO, Ndibulele Mqoboli, discusses re-platforming, cloud migrations, and building a culture of ownership, responsibility, and continuous improvement.
Clark County: Creating collaboration for the benefit of residents
Navigating the world of local government can be a minefield of red tape, both for citizens and those working within it. Al Pitts, Deputy CIO of Clark County, talks to us about the organisation’s IT transformation. He explains why collaboration is key to support residents. “We have found our new Clark County – ‘Together for Better’ – is a great way to collaborate on new solutions.”
Also in this issue, we hear from Alibaba’s European GM Jijay Shen on why digitalisation can be a driving force for SMEs. We learn how businesses can get cybersecurity right with KnowBe4 and analyse the rise of ‘The Mobility Society’.
Could generative AI be the answer to procurement’s problems: fewer workers, more work, and a rising bar for digital literacy.
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It’s news to no one that the nature of the procurement industry has changed.
Spurred by the COVID-19 pandemic, an industry-wide surge in digital transformation, and the rising immediacy of the climate crisis, procurement has never been more important, or more complicated. However, as the industry’s demands grow and evolve, many procurement teams find themselves in need of skilled individuals that simply aren’t there.
A recent study conducted by Gartner found that just one in six procurement teams believe they have “adequate talent” to meet their future needs. That means just 15% of CPOs were confident in their future talent pools and ability to recruit skilled individuals, even if they believed their current staffing was sufficient to meet demand today.
Concerns over “having sufficient talent to meet transformative goals based around technology, as well as the ability to serve as a strategic advisor to the business,” were the primary cause of skill shortage stress, according to Fareen Mehrzai, a Senior Director Analyst in Gartner’s Supply Chain Practice. Essentially, the changing nature of procurement means not only that today’s procurement teams are unprepared for the discipline’s continued transformation from back office buyer to “orchestrators of value” in the executive team, but face an increasingly sparse hiring market as the requirements for a new procurement recruit become increasingly complex to satisfy.
Generative AI: Making digital accessible
Generative AI exploded into the public consciousness in 2023 with the launch of image generation tools like Midjourney and DALL.E, as well as chat-bots like Chat-GPT, powered by large language models. Investment has been immediate and almost unthinkably massive. In late 2023, it was estimated that generative AI startups were attracting 40% of all new investment in SIlicon Valley, and Bloomberg Intelligence estimates that the market for generative AI, valued at $40 billion in 2022, will be worth as much as $1.3 trillion in the next decade.
Now, whether or not generative AI has the society-spanning, epoch-disrupting economic and social impact people are predicting (personally, I remain unconvinced, and anyone who disagrees can either fight me in the metaverse or try to run me over with a self-driving car) actually manifests, there’s no denying generative AI’s potential as a useful tool if adopted correctly.
Especially in an underskilled, rapidly digitalising procurement sector.
How can generative AI help procurement?
While Generative AI will never write a (good) movie script or create a piece of art that anyone with any taste would find genuinely moving, there are some things it does very well. Namely, it is very good at not only taking in and processing huge (and I mean huuuuge) amounts of chaotic, poorly structured information and answering questions about it, but most importantly, it can understand prompts and give results in simple, conversational language. There are still limitations and kinks to work out, however.
Generative AI still deals with hallucinations. However, the ability to input huge amounts of data and analyse that data in a conversational format could alleviate a lot of the technological literacy related teething problems that appear to be at the heart of the procurement skills shortage.
An EY report notes that, in the Supply Chain and Procurement space, generative AI has massive potential to: “Classify and categorise information based on visual, numerical or textual data; quickly analyse and modify strategies, plans and resource allocations based on real-time data; automatically generate content in various forms that enables faster response times; summarise large volumes of data, extracting key insights and trends; and assist in retrieving relevant information quickly and providing instant responses by voice or text.”
The future of Gen AI
Generative AI can be a source of simplicity for procurement teams at a time when new technologies often add complexity and necessitate upskilling or new hires. EY notes that a biotech company using a generative AI’s chat function has had positive results when using it as a way to inform its demand forecasting. “For example, the company can run what-if scenarios on getting specific chemicals for its products and what might happen if certain global shocks occur that disrupt daily operations. Today’s GenAI tools can even suggest several courses of action if things go awry,” write authors Glenn Steinberg and Matthew Burton.
Adopted correctly, generative AI could not only empower procurement teams to handle the pain points of today, but also tackling the looming threat of the skills shortage in an industry facing a relentless demand for skills that may not be in adequate supply for years to come.
Public sector purchasing stands to gain the most from data-driven procurement, and so far has done the least.
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Data-driven analytics have the potential to empower CPOs with greater understanding of their ecosystems, value chains, and internal operations. Big data can shine a light on places where there’s room to create efficiencies, contain costs, and mitigate risk.
In the June 2023 issue of Government Procurement, Steve Isaac notes that analytics can create significant benefits in areas like negotiation, vendor segmentation and yearly planning. He goes on to note, however, that “advanced analytics and data science haven’t exactly broken into the public procurement zeitgeist. It isn’t the subject of keynotes at the annual conferences and meetings … It isn’t a qualification line on most procurement job listings. For most agencies—even large ones—introducing advanced data science is not a priority.”
It’s not altogether shocking that, while the private sector is investing heavily in the potential benefits of data analytics and other digital procurement tools—with the global procurement software industry predicted to exhibit a CAGR of over 10% between now and 2032—public sector procurement lags behind. Isaac notes that it’s a “chicken and egg” issue with the case for a robust data science function hinging on the benefits of that investment being understood, which requires them to be felt, which can’t happen until investment, but… and so on.
However, there’s a case to be made that this delay in data science investment by public sector procurement agencies is one of the critical stumbling blocks also preventing public sector procurement from adopting artificial intelligence, machine learning, and other cutting-edge technology with the potential to solve a lot of the recurring public sector pain points.
Raimundo Martinez, Global Digital Solutions Manager of Procurement and Supply Chain at bp, noted in a recent interview with the MIT Technology Review that “everybody talks about AI, ML, and all these tools, but to be honest with you, I think your journey really starts a little bit earlier. I think when we go out and think about this advanced technology, which obviously, have their place, I think in the beginning, what you really need to focus on is your foundational [layer], and that is your data.” Martinez stresses the importance of building a strong data foundation that allows CPOs to take advantage of emerging technologies in their supply chains.
It’s not as though public procurement departments are short on data either. Isaac argues that, “if data is a precious resource, governments are gold mines.” Governments collect huge amounts of information all the time. The widespread adoption of digital ERP systems, eProcurement, supply chain management software and vendor performance sites is now doing a great job of mining that data.
As noted in a report by researchers from the Government Transparency Institute, a European think tank, “The digitalisation of national public procurement systems across the world has opened enormous opportunities to measure and analyse procurement data. The use of data analytics on public procurement data allows governments to strategically monitor procurement markets and trends, to improve the procurement and contracting process through data-driven policy making, and to assess the potential trade-offs of distinct procurement strategies or reforms.”
From compliance to being an efficiency driver, there are more benefits to sustainable procurement practices than environmental ones.
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The main obstacle cited by procurement leaders (as well as those outside the procurement and supply chain functions) to adopting sustainable procurement practices is cost.
According to Edie’s “The Business Guide to Sustainable and Circular Procurement” report released in November 2023, “Costs and Finances” was considered one of the biggest barriers to “Improving Sustainable Procurement For Your Operation”. In a survey of procurement leaders, 76% considered cost to be one of the biggest issues, compared to the distant second and third options: “Lack of Data” (54%) and “Lack of Understanding on Sustainability (38%).
However, in addition to the fact that the benefits of collective climate action dramatically outweigh its short term costs (existential threats are like that), there are sound arguments to be made for sustainable procurement practices from a business point of view as well.
The sustainability benefits incurred by reducing environmental impact in the supply chain can, according to the Edie report, be a catalyst that helps respond to a plethora of issues and considerations.”
Closing the loop to create a more circular supply chain can be driven from within the procurement function, and can do a lot to protect the S2P process from pricing volatility and supply chain disruption—something increasingly on the mind of industry leaders, as indicated by Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report, which highlighted “a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate-related disruptions in maritime trade causing both higher delivery costs and delayed delivery times.”
There is also the fact that meaningful adoption of sustainable practice in the S2P value chain can have a meaningful financial benefit to brands as a whole. Sustainability is an issue on which consumers vote with their wallets. According to the World Economic Forum, “sustainable procurement practices can help deliver a 15-30% increase in measurable brand equity and value”. Consumers, suppliers, and partners all value sustainable practice as a meaningful demonstration of company quality, and—especially in terms of public opinion—consumers are becoming savvier when it comes to differentiating meaningful change from empty rhetoric.
There’s more economic benefit than brand value adjustment that comes along with reexamining procurement practices from a sustainability perspective. The same report by the WEF noted that “embedding sustainability into procurement practices can actually help reduce departmental costs for procurement by 9-16%.” Evaluating processes for the sake of exploring green options often exposes existing inefficiencies, siloes and poor planning that can then be rectified rather than being left unexamined.
While business leaders continue to shy away from perceived profit loss as a result of pursuing more sustainable practice in their procurement functions, when handled correctly, it can be a source of more than just emissions wins.
As procurement becomes more important, digitally-driven, and strategic, so has the role of the Chief Procurement Officer.
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15 years ago, the Chief Technology Officer role rarely appeared on a roll call of the C-suite outside Silicon Valley. If you weren’t a tech company, you had a “head of IT” or even just an “IT guy”. Now, “every company is a technology company”, and every boardroom has a CTO. (And a Chief Information Officer, and a Chief Security Officer, and probable a Chief Digital Transformation Officer, and so on).
As technology has changed the way that we do business at a near-molecular level, so too has it changed the roles of the leaders overseeing it. No longer can you have someone in your C-suite who is technologically illiterate, just like you can no longer be a tech genius without at least a little flair for business. As the role has become more integral, it has become more strategic, and the demands placed upon executives and employees have changed.
That’s all ancient history, but history repeats itself. The same thing is happening to procurement right now.
In the last several years, the procurement function has started to show genuine signs of transformation from what David Ingram, CPO for Unilever, calls a “insular, contract-and-process-heavy organisation to a wider, more insightful function that is connected to what is happening in the broader market.”
Hervé Le Faou, CPO at Heineken, goes further, stating that “Fundamentally, the CPO is evolving into a ‘chief value officer,’ a partner and co-leader to the CEO who is able to generate value through business partnering, digital and technology, and sustainability, which are new sources of profitable growth in a shift toward a future-proof business model.”
A white paper from AI procurement company Zycus points out that the role of CPO has grown to include new duties, and preexisting duties have become more important in an increasingly fast-moving, easily-disrupted business landscape. “Today, CPOs are responsible for compliance. They play an active role in merger & acquisitions and participate in strategic initiatives. This is in addition to handling supply risk management, environmental responsibility, as well as the traditional job of ensuring cost-efficiency,” the report’s authors note. “Hence, it comes as no surprise that some companies have started inducting CPOs into the board of directors. In many others, the employee- hierarchies are undergoing a change, with procurement function reporting directly into the C-level executives or the board. The CPOs of today enjoy greater autonomy and improved control over budgets than before.”
As a result, the role of CPO has transformed from a tactical, functional one to something broader, more strategic, and typically more autonomous.
Risk management has risen (almost) to the top of CPOs’ priority list for 2024. Here’s how they’re tackling it.
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If ever the world truly reached a state of “new normal”, that state is one of constant disruption.
Even by the time the COVID-19 pandemic threw the world’s supply chains into a state of utter turmoil in March of 2020, procurement teams were already dealing with a heightened state of disruption. The US-China trade war that defined most of 2019 had barely simmered down before most of Australia was on fire and a US drone strike killed Qasem Soleimani which made an escalating war with Iran look like a very real possibility. Lockdowns, protests, earthquakes, war in Ukraine, spiking oil prices, genocide in Palestine, and both the accidental and purposeful disruption of shipping through the Gulf are just a smattering of the disruptions to which procurement professionals are becoming accustomed.
“After the last few tumultuous years, procurement teams are still facing steep challenges in getting ahead of supplier and supply chain risks,” writes Greg Holt, Product Marketing Director at Interos. “Unfortunately, there are no signs that the heightened frequency of disruptions we’ve seen over the last few years will abate in 2024.”
It’s clear that the procurement teams that learn to manage risk on a daily basis will be the ones that fare best in a world increasingly defined by geopolitical instability and a collapsing climate.
Procurement risk management strategies
Risk management is not a one-time process, nor a single overhaul of policy; managing risk requires constant oversight and frequent reevaluation to ensure you avoid disruption today and are ready for problems that will arise tomorrow.
Streamline your data, break your silos
Procurement departments are often repositories of some of the best risk management data in the whole organisation, gathering large amounts of information on suppliers and other external factors. Procurement departments that take a more purposeful approach to their risk data can quickly establish themselves as repositories of “data, assessments, monitoring and alerts,” becoming “trusted partners who can maintain the risk intelligence needed to support the business with insights, trends and a common view of the risks posed across the extended supplier ecosystem.”
Automate away human error
While there is no shortage of questions when it comes to applying automation to complex tasks (not to mention new pain points and sources of risk), correctly implementing automation can create immediate benefits when used to take repetitive, resource intensive tasks out of human hands. Repetitive, menial tasks are common in procurement systems, and are the most prone to human error. Automation tools can reduce errors and free up time for procurement workers.
Use digital transformation to diversify your supplier ecosystem
There’s a limit to the amount of decision making and supplier diversification achieved by human means. There’s simply too much decision making to be juggled. However, with the help of AI, procurement departments can diversify and adjust their supplier ecosystem much more effectively and to a greater degree. For example, the South Korean government has adopted AI-powered decision making to nearshore a significant portion of its procurement spend. Now, 75.6% of the government’s total procurement spend is now awarded to SMEs through the evolution of its AI platform.
Interest and investment in generative AI has been massive, but does the technology actually have the capacity to meaningfully change the procurement industry?
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Since the arrival of large language model-powered chatbots, like OpenAI’s ChatGPT, the corporate landscape has been frantically striving to invest in and adopt generative AI.
Executives floated (I mean salivated over) the possibility that generative AI could replace a staggering number of roles throughout virtually every sector from law to content creation and entertainment. Well, just look how well that turned out. The legal backlash has, in many cases, been severe and, just over six months into the generative AI hype cycle, cracks are beginning to show.
But what about the applications? Surely all these issues and all this money is going into generative AI technology for a reason, right? Surely we all learned our lesson from the Metaverse, the crypto bubble, NFTs, and streaming and… I guess we didn’t, did we?
Well, actually, there are a few, but they won’t look like the Wild West of content generation we’ve seen so far.
In the retail sector, for example, 98% of companies plan on investing in generative AI in the next 18 months, according to a new survey conducted by NVIDIA (a company with an admittedly vested interest in selling shiny new GPUs). Early examples of adoption in the sector have included personalised shopping advisors and adaptive advertising, with retailers initially testing off-the-shelf models like GPT-4 from OpenAI.
However, many retailers are recognising that the strength (and weakness) of generative AI is that you only get out what you put in. That’s why the technology is, ultimately, useless as a way to replace creative roles like writers and artists. However, as a brand communicator meticulously trained on a specific set of data with carefully updated parameters, it could be invaluable. NVIDIA’s report notes that “many are now realising the value in developing custom models trained on their proprietary data to achieve brand-appropriate tone and personalised results in a scalable, cost-effective way.”
Generative AI trained on a company’s internal and customer-facing databases, web presence, and curated information resources could conversationally recommend, educate, and explain critical information to employees, customers, and business partners effectively and consistently. In an industry where communication relies on clarity and an understanding of large quantities of information, like procurement, the applications suddenly start to look a lot more appealing.
Chatbots and negotiation bots trained to converse with suppliers, programmed with company approved negotiation tactics and the latest pricing information, could automate a great deal of complexity out of the Source to Pay process.
I think the looming issue is the impact of generative AI adoption on a company’s Scope 3 emissions, as 2024 will unquestionably be defined by greater scrutiny on these sources of pollution. However, it seems that however many issues the more widely known aspects of generative AI have, the technology itself could still have a role within the procurement function of the near future.
Does it justify all the investment, hype, and endless industry media thinkpieces? I guess only time will tell.
An overabundance of digital solutions and a dearth of trust in procurement data presents a unique challenge for CPOs.
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The digitalisation of the procurement sector is well underway, with the global procurement software market set to grow by $11 billion over the next decade, with demand for cloud-based procurement solutions and automated and efficient procurement processes driving this revenue growth.
Procurement efficiency drive
However, a proliferation of digital tools across the procurement landscape points to the growing danger of inefficiency and lack of clarity when it comes to CPOs’ digital transformation strategies. A report by procurement software vendor Productiv found that “procurement and IT are being inundated with software access, vendor intake and renewal requests,” leading to a 32% uptick in the number of SaaS apps procurement departments are running, and a steadily growing workload for purchasing departments as they manage, on average, 700 vendors across various indirect procurement categories.
“This patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos,” notes Aashish Chandarana, Chief Information Officer, Productiv. “Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.” The result is less time and less data to support generating meaningful insights to drive the necessary efficiencies that procurement needs to start producing for the business.
Frequently, it also seems, procurement spends so much time managing sprawling, disconnected tech stacks, that it doesn’t have the time to ensure its data is trustworthy either. A SpendHQ report found last year that “79% of non-procurement executives express limited confidence, or none at all, in utilising procurement’s data for making strategic decisions.” CPOs might recognise the critical nature of accurate data in driving decisions, but so far it seems as though the industry is struggling to ensure the accuracy and reliability of procurement data throughout the wider organisation.
Big Data potential
The potential of big data, effectively harnessed, is tremendous in the procurement process—potentially creating true visibility in otherwise murky or completely opaque value chains, highlighting opportunities for cost containment and efficiency, and helping flag risk factors that could preempt disruption.
Organisations looking to maximise the potential applications of data within their organisations need to be simultaneously mindful of the need for a decluttered tech stack and verifiable, trustworthy data if they are to avoid the pitfalls currently affecting the sector.
Costas Xyloyiannis, CEO of HICX, discusses why it’s time for leaders to take a fresh view of the data problem, and plan to reduce emissions.
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The start of the year is a good time for business leaders to consider their progress against net zero commitments. It also nudges us nearer to carbon-cutting milestones, the nearest of which is in 2030. By this time, businesses across the globe need to have halved their carbon emissions. So, if they haven’t already, now is the time to step up delivery.
But first, there’s a barrier to overcome. Behind every credible net zero win, is credible carbon data. The problem is it’s in very low supply. Good data relies on good emissions information from suppliers, and securing it is notoriously difficult.
As 2024 gets off to a start, it’s time for leaders to take a fresh view of the data problem, and plan to notably reduce emissions. To enable net zero success, we can assess supplier relations in three areas: the power play, digital processes, and a principle that works tremendously well in marketing.
Suppliers are in the power seat
Gone are the days when suppliers view their role as subservient. If the Covid-19 pandemic showed business leaders anything it’s just how much they depend on suppliers – and not just a strategically relevant few. In 2020, we saw non-strategic suppliers, such as PPE and IT providers, become crucial to operations overnight. Since then, businesses have continued to need a broader range of their supplier networks. When further supply chain disruptions brought continued uncertainty, that dependence deepened. Today, as businesses require increasing amounts of carbon information, the fact that we need suppliers is cemented.
Despite this, how big businesses work with their suppliers is often outdated and counter-productive to their goal of gathering good information.
Digital processes are in the Stone Age
Bringing supplier relations into the 2020s will take some serious shifts. First, it’s time to assess the digital processes for managing suppliers, which frankly are not up to the task. A hybrid setup of old and new technology, often poorly integrated, stops procurement teams and their suppliers from communicating well. It causes other friction too, like logging in and out of multiple tools just to perform simple tasks, a headache for both parties.
Additionally, the various tools are data traps. Every time a supplier uses a tool, it collects and stores their data. Siloed in this way, supplier data can quickly become duplicated and outdated, because it’s difficult to maintain. Unreliable master data is no good at fuelling automated workflows, and so procurement teams get stuck with manual processes.
These clunky manual processes together with the frustrating communication methods are not a recipe for successful relations. Given that businesses lean so heavily upon suppliers to receive data for carbon reporting, it’s fair to say that the approach to supplier relationships must change.
Friction is building
When starting a business relationship, most suppliers don’t sign up for this level of friction. What they expect is to put in their first purchase order, deliver their first product, send their first invoice, and repeat. In a perfect world, they will simply transact and renew.
In practice, however, the relationship is not so simple. Businesses need more from suppliers than just transacting – for one, they need a significant amount of information for compliance and innovation reasons and of course on carbon activity. So, businesses send their suppliers an abundance of information requests.
Suppliers, then, who simply want to transact, must field these requests. Further bugbears such as manual processes, disparate ProcureTech setups and poor communication practices, make it difficult to respond. A recent Supplier Experience survey found that over a third of suppliers are expected to login to 10 or more systems, nearly half struggle to resolve queries with their biggest customers, and 61% find it challenging to do their best work. Yet, while suppliers don’t find the situation productive, it continues. Why? Because businesses need their carbon information.
Suppliers want a partnership
An important consideration is that suppliers have agency. When they have limited stock or an idea, they can choose who gets it. When it comes to making the effort to dig up vital carbon information they have a choice. This isn’t to say that suppliers purposefully hold information back. This would be unlikely because they too want the relationship to work. But when they are swamped trying to fulfil their original mandates whilst figuring out complex tech and deciphering information requests, the little time and energy they do have to provide information might well go to a customer-of-choice.
It’s no different in the consumer world, where shoppers decide which brands to buy from. Businesses can’t force consumers to buy from them, so marketing teams get involved and work their magic. They encourage people to spend their hard-earned, limited money on products which they may or may not need, by showing them value, often in the form of an emotional appeal.
Similarly, businesses can’t force suppliers to spend their limited time giving carbon information. But they can sweeten the experience. There’s an opportunity, therefore, for Procurement teams who manage suppliers to change things up. Rather than bombarding suppliers with information requests that they will struggle to fulfil, they can borrow the principle of ‘encouragement’ from Marketing. Procurement can show value to suppliers, according to what’s important to them, with the view to receive value in return.
So, as we start a new year, business leaders can take a fresh perspective on how suppliers are engaged. By understanding the dependence on suppliers, this relationship can be improved. Ultimately, by viewing suppliers as partners, simplifying digital processes and “marketing” to them, business leaders can lay the groundwork for net zero.
Luke Abbott, Co-Founder and CEO at Equipoise, discusses the art of accelerating sustainable procurement with artificial intelligence.
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In today’s rapidly evolving business landscape, sustainability is not just a buzzword; it’s a necessity. As organisations strive to reduce their environmental footprint and drive social improvements in their supply chains, sustainable procurement emerges as a pivotal strategy. With the advent of artificial intelligence (AI), the potential to revolutionise sustainable procurement practices has never been more promising.
Understanding sustainable procurement
Sustainable procurement is the integration of environmental, social, and economic considerations into procurement decisions, to reduce adverse impacts upon society, the economy, and the environment1. As businesses grapple with the repercussions of climate change, dwindling resources, and increasing stakeholder demands, sustainable procurement offers a pathway to not only mitigate risks but also seize new opportunities.
The AI advantage in sustainable procurement
AI, with its ability to process vast amounts of data, automate tasks, and identify intricate patterns, is poised to be a game-changer for sustainable procurement. By leveraging AI, organisations can:
Enhance sustainability data collection
Scope 3 is the hottest topic in sustainable procurement and many organisations are grappling with the question of how to measure the greenhouse gas emissions of their suppliers. Understanding this, especially beyond the first tier, requires extensive data collection. If you were to focus on your top 100 suppliers and ask your tier n-1 suppliers to do the same, when you get to tier 3 (which is probably nowhere near the end of the supply chain) you need to engage a staggering one million companies. At this point, manual data collection and analysis is out of the question for time-strapped organisations. AI tools, such as Avarni2, streamline this process, ensuring comprehensive and accurate data acquisition.
Predictive analytics for sustainability risk management
Managing sustainability risks in today’s intricate global supply chains presents challenges such as monitoring vast supplier networks, handling overwhelming sustainability data and rapidly adapting to sanctions, media reports and regulations, all while maintaining a pristine reputation. AI offers a solution by providing real-time monitoring of supply chains, predictive analysis of potential disruptions, seamless data integration for a comprehensive view, automated reporting for enhanced transparency, and scenario analysis for strategic planning. AI tools, like Versed AI3, continuously monitor vast amounts of supply chain data, ensuring real-time tracking of sustainability factors. This real-time monitoring allows companies to identify potential risks before they escalate, enabling procurement teams to proactively address disruptions and uphold sustainability standards.
Automation
According to Deloitte’s 2023 Global Chief Procurement Officer Survey4, over 70% of CPOs have seen an increase in procurement-related risks, and only a quarter feel equipped to predict supply disruptions timely. Furthermore, internal challenges like talent loss and organisational complexities add to the burden. By automating routine tasks, AI not only alleviates these pressures but also empowers procurement professionals to focus on high-value initiatives, such as supplier education on sustainability priorities. Generative AI tools like ChatGPT can expedite market research, strategy formulation, and contracting processes, allowing teams to be more agile and responsive in this volatile environment.
AI in action
Unilever’s Sustainable Living Plan5 has been at the forefront of leveraging AI to drive innovation in sustainable procurement. In 2023, Unilever highlighted how they have been using AI and digital technologies, from the launch of their first digital tool to the recent formulation of the world’s first green carbon detergent6.
“We’re using AI to help identify alternative ingredients that can strengthen the resilience of our supply chain, making our formulations more sustainable and cost-efficient, and simplifying them by reducing the number of ingredients without impacting a product’s quality or effectiveness.” – Alberto Prado, Unilever R&D’s Head of Digital & Partnerships.
Through a data-driven approach, Unilever has been making smarter, faster, and sharper decisions to optimise its portfolio of brands and products. Their commitment to sustainability is further emphasised by their ambitious goals, which include climate action to achieve net zero, reducing plastic usage, regenerating agriculture, and raising living standards within their value chain7.
Limitations and due diligence
While AI offers transformative potential, it’s crucial to recognise its limitations. The accuracy of AI predictions and recommendations hinges on the quality of data fed into the system. In the realm of sustainable procurement, this means ensuring that the data sources are reliable and comprehensive. Regular audits, cross-referencing with trusted databases, and continuous training of AI models are essential to maintain the integrity of AI-driven insights.
The 2023 Gartner Hype Cycle for artificial intelligence8 underscores the significance of addressing the limitations and risks of fallible AI systems. It emphasises the need for AI strategies to consider which innovations offer the most credible cases for investment, ensuring that AI’s transformative benefits are realised while mitigating potential pitfalls.
The future of AI in sustainable procurement
As we gaze into the future, the synergy between AI and sustainable procurement is poised to grow stronger. With advancements in machine learning algorithms, natural language processing, and predictive analytics, AI’s potential to drive sustainability will only amplify. The Gartner report highlights the rise of generative AI, which is reshaping business processes and redefining the value of human resources. Such innovations, including generative AI and decision intelligence, are expected to offer significant competitive advantages and address challenges associated with integrating AI models into business processes.
However, a conservative outlook suggests that while AI will be a significant enabler, the onus remains on organisations to embed sustainability into their ethos and operations.
In conclusion, as the business landscape becomes increasingly complex, the fusion of AI and sustainable procurement offers a beacon of hope. By harnessing the power of AI, organisations can not only navigate the challenges of today but also pave the way for a sustainable and prosperous future.
In our new feature, Shaz Khan takes us through a day in his life leading operations as CEO at Vroozi.
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The procurement industry is on the cusp of a golden age. The quality and breadth of software that we will have at our disposal will be able to solve pain points in ways we have never seen before. As CEO of Vroozi, every day is spent with the mission of trying to spearhead these innovations in sourcing and procurement tech forward. However, in order to keep a proper work-life balance and not burn the candle at both ends, I have to ensure that my days are organised in such a way that I can maximise productivity while leaving enough room to let my mind and body recharge.
My mornings typically look the same. I wake up every day at 6am and I spend the hour either checking emails or getting on phone calls with partners and clients who are located in different time zones. My wife and I love a great cup of coffee and she brews a mean French press every morning which I happily imbibe as we prep to take our youngest child to school.
After morning drop off, I always do some type of workout from 8am to 9am, a quick morning hike, weight training, or some type of cross-fit routine. Physical activity is important to me and I like to get my blood pumping first thing in the morning. I am based in Los Angeles and I love to take advantage of the favourable climate and conduct my daily morning leadership meetings when possible. We have built a great team and culture at Vroozi and I always want to start the day with complete alignment on our company objectives.
For the rest of the morning, I am involved in a mix of meetings with management, status calls with different departments, and direct sales calls. I try to schedule most of my meetings during these hours so that by 1pm, I can focus on my own work without distraction. I fit lunch somewhere within these time slots depending on when I find an opening, but it ranges from day to day. From 1pm to 4pm, I get to do the work I need to do to review items of importance — from various documents, contracts, or simply just game planning and overall strategy.
As a CEO, there are three major areas I am laser focused on. The first area involves evangelising the overall vision of the company, both internally and to the outside market. It is important to set a solid vision and mission statement for your team but also provide clear guidance to the market on your differentiators, value proposition, and capabilities in the simplest of terms. My second responsibility is Chief Recruitment Officer. I want to ensure that I am actively recruiting and building the best team. Of course, a big part of that involves hiring talent from outside the company, but I strongly believe in promoting from within — ensuring there is a proper promotional path for high performers within the company.
The third responsibility has two components: Innovation and Sales. I subscribe to the notion that tech CEOs should spend 50% of their energy innovating on the product and the other 50% driving sales and distribution for the product lines. CEOs need to educate themselves on the products and services that they’re selling and how to sell it. You cannot offload that responsibility to other people. You should immerse yourself in all aspects of the product and influence the roadmap of that product. That’s why it’s critical to be able to support sales efforts directly or indirectly.
After 4pm, I check in with the management team to see if there are any urgent action items or issues that need to be unblocked. I like to spend a portion of my day with core management to ensure we understand organisation goals and that we’re doing what is needed to achieve them. If we see some slips in the process, we’ll address the things we need to do to fill in those cracks. We are a tech company and much of our focus revolves around the pace and quality of innovation with our software platform. Are we responding to customer needs quickly? How quickly are we approving new features on a product roadmap that we feel is meaningful to the company mission? How quickly are we demonstrating value not only to our existing customers but to prospects in our sales cycle? Are we retaining customers and growing with them?
Shaz Khan, CEO, Vroozi
When selling software, customer retention and expansion is critical. We strive to maintain the same level of enthusiasm, service level, innovation and attention for both our long-standing customers and new customers in a consistent manner. The same way you expect a retail chain at a mall to look and feel relatively the same whether you are in Texas or California, we want our services to be consistent and world-class regardless of region and market.
As top management, you should not be the final verdict in every required key decision. You should be able to empower leadership with a framework for decision making and risk management and trust that business is moving in a continuous state of motion. You have brought leaders in for that very purpose—to lead departments, mitigate risk, and execute strategy. However, problem solving is absolutely a necessary part and art for any C-Suite executive. My approach is very action-based. If there is a problem in a department that I see is not getting addressed to the company’s satisfaction, I will actively pull up a chair and sit down with that department to ensure we don’t leave until we outline an approach to solve the issue at hand.
Leaders need to entrust the team that they have gathered around them to solve day to day problems and challenges. But CEOs also need to be active so that problems in the business can be addressed and remediated quickly.
I also draw a line in the sand where I will never go searching for problems to solve. There’s a trust that you build with your executive team to get that work done. Regardless if I’m handling the problem or one of my direct managers is handling it, I believe that if any item will take you less than 10 minutes to complete, get it done immediately. This is how you are able to streamline business operations without letting issues pile up month after month unaddressed.
Once I deal with any important matters at hand with upper management, I’ll take a break and wind down with dinner with the family or coaching my daughter’s league basketball teams. My last shift of the day is around 9pm where I will check in with our international team and partners and customers. I take any calls required from those overseas teams when it comes to product development or sales opportunities.
After 10pm, I make sure to shut down and prepare for the next day. It’s important to set boundaries when you’re off the clock. I don’t subscribe to the philosophy that you have to work all hours of the day to prove your worth. Being CEO will already require plenty of sacrifice and commitment within the title. You have to always be on and there is no real concept of a weekend or a holiday. But that does not mean that we must burn out. I always try to find time to disconnect and decompress, whether with music, art, or physical activities.
The procure-to-pay industry will see some dramatic and fantastic changes in the next couple of years and Vroozi is positioned to not only adapt to these changes but to lead these changes with our AI-based technologies. There will be an increasing proliferation of technologies within the procuretech ecosystem that will augment company resource pools with smart AI-enabled assistants. These advanced tools will streamline purchasing and payment transactions, and foster improved collaboration between buyers and suppliers, ultimately enhancing supply chain operations.
In the next three years, procure-to-pay will emerge as a vital organisational function, not only driving improved operating margins and enhancing productivity through intelligent document processing but also acting as a key catalyst for innovative supply chain developments between suppliers and buyers. This will involve capabilities that will span predictive analytics on pricing trends, supply chain scenario planning, and digital payment alternatives with AI assistants who will recommend the best course of action to take—both within the software technology map, but also with additional solutions beyond it to further strengthen your business case or outcome.
With these changes on the horizon, I anticipate shifts in my day-to-day. Before COVID, I was on the road for half the year, as I firmly believe you have to be physically present whenever possible rather than relying on management via Zoom or other video conference tools. As we continue to expand in 2024, I expect to dedicate more time to travel, engaging directly with customers, partners, and participating in key events.
As I prepare to hit the road this year, my typical day will often look different. However, regardless of my location, my routine will maintain a structured focus on developing the best possible product and getting that product in the hands of as many customers as possible.
CPOstrategy explores this issue’s Big Question and uncovers if now is the greatest time to be in procurement.
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Procurement has a unique opportunity.
Amid unprecedented digital transformation and innovation, it finds itself in a state of flux and momentum. For professionals who like change, procurement is the place for them. The years of procurement standing still are long gone, its position in the c-suite is only becoming increasingly secure and prominent.
As Covid outlined, businesses need flexible and agile supply chains that are equipped to deal with local or global disruption based on macroeconomic factors. This could be an aforementioned pandemic, wars like the ones we’ve seen in Ukraine and Israel in recent years or other external issues such as the Suez Canal disruption or inflation concerns. Procurement’s time is now.
At DPW Amsterdam 2023, the notion that procurement exists in today’s world as an exciting function that spearheads the c-suite. In comedian and host of DPW, Andrew Moskos’, opening welcome, he noted procurement’s transformation and shouted. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk and 80% of the spend of a company goes through us.” His message was met with loud applause from a capacity crowd at former stock exchange building Beurs van Berlage.
Michael van Keulen, CPO, Coupa
According to Michael van Keulen, Chief Procurement Officer at Coupa, it’s the feeling of ‘no two days are the same’ which keeps him energised and feeling refreshed about meeting new challenges in the space. “I wear so many different hats every single day,” he explains. “I always say sometimes I’m an accountant, others I’m an environmentalist. Sometimes I’m the treasurer or a finance person, but I’m also sometimes a psychiatrist. Sometimes I’m a doctor, a nurse, a lawyer, a judge, an environmentalist and yes even a wizard.
“I never know what my day looks like. I can plan it, but something may happen where everything goes out the window. Procurement will always be going through some type of disruption. It’s about how you drive the competitive edge and how you drive value despite that. Procurement is the best gig in the world. It’s great that more people have started to see that now too.”
Right now, generative AI is the latest craze causing quite the buzz in procurement. Indeed, its noise is loud with its true influence yet to be determined. But it’s worth remembering generative AI didn’t start with ChatGPT in 2022. Chatbots actually go back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. But, given the introduction of a far more advanced model – ChatGPT – gen AI isn’t just making waves in procurement but across industries globally too.
Daniel Barnes, Community Manager, Gatekeeper
For Daniel Barnes, Community Manager at Gatekeeper, the stakes are high. As a self-confessed change agent, he believes procurement stands at a make-or-break moment. “You’ve got people who are stuck in the past that are archaic with what they’re doing. Then there’s those who are really pushing the profession forward,” he explains. “I see it as a moment in time where procurement kind of goes one in two ways. It’s extinct in terms of how it used to be. There’s solutions which have automated workflows and are doing the work that traditional procurement people used to do. We can pull people along, but there has to be a willingness to change or it’s not going to happen. That’s why I think it’s great to see people that are showing that willingness. They may not have the answers, but they want to learn.”
Alan Holland, CEO, Keelvar
According to Alan Holland, CEO of Keelvar, he is bullish and optimistic about procurement’s future, stressing that decision-making for the function is easier than ever before. Holland affirms tomorrow is “very bright” as procurement enters an era with intelligent software agents that can automate workflows and make the human workday more efficient. “There’s a whole new range of possibilities where creative and thoughtful planning will provide a competitive advantage for organisations. Procurement can be far more influential in how successful their companies can be. It’s a game-changer.”
Scott Mars, Global V
Scott Mars, Global Vice President of Sales at Pactum, affirms procurement’s in its golden age given the number of vendors operating within the procuretech ecosystem has hit soaring heights. He tells us, “I was speaking with a CPO recently and he said 10 years ago you could name the procure to pay and ERP vendors on one hand, now there’s hundreds of them and all these periphery vendors for AI and spend. The most visionary procurement leaders aren’t just looking at these all-encompassing solutions, they’re bolting on niche solutions into their ecosystems to make their teams more efficient. I think we’ll start to see a consolidation in the coming years of all these little companies into a few larger players to do really an end-to-end type solution. I expect someone to come up with a solution to close the loop in procurement.”
Stefan Dent, Co-Founder, Simfoni
While procurement, like many industries, is still plagued by talent shortages, there is hope that AI could hold the answer. But while its influence is crucial in one hand, is there a risk that the industry could go too far the other way and become over reliant on technology? Stefan Dent, Co-Founder at Simfoni, believes soon Chief Procurement Officers will soon be thinking differently about their workforce. “This is arguably the best time for people to join procurement, as you’ve got this great opportunity to embrace digital and make it happen. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset, as opposed to fighting being replaced. I think for graduates coming into procurement, they’ve got the opportunity to play with digital which is a wonderful thing.”
Matthias Gutzmann, Founder, DPW Amsterdam
Today, procurement, and its professionals, find itself amid meteoric change. Indeed, its future could be anything. Matthias Gutzmann, Founder of DPW Amsterdam, believes it is time for procurement to create a buzz about the profession. “It’s the best time to be in procurement,” he explains. “It’s the most exciting era to be in procurement and supply chain. We need to get loud about it and celebrate that fact.”
Timothy Woodcock, Director of Procurement at CordenPharma, discusses the new wave of change following acquisition and amid transformation
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We have a bumper issue of fascinating exclusives this month!
Corden Pharma: Powering Change
Timothy Woodcock, Director of Procurement at CordenPharma, discusses the new wave of change following acquisition and amid transformation
Change is here, get busy. Indeed, some organisations are further along a transformation journey than others. For CordenPharma, a Contract Development and Manufacturing Organisation (CDMO) partner, they are right on track.
CordenPharma supports biotech and pharma innovators of complex modalities in the advancement of their drug development lifecycle. Harnessing the collective expertise of the teams across its globally integrated facility network, CordenPharma provides bespoke outsourcing services spanning the complete supply chain, from early clinical-phase development to commercialisation. Recognised as a key partner to the pharma industry, CordenPharma provides state-of-the-art know-how, an integrated product offering end-to-end capabilities from early-stage development to commercial large-scale manufacturing.
A closer look
Timothy Woodcock has been the Director of Procurement at CordenPharma since October 2022 and is based in Basel, Switzerland. He explains that since joining over a year ago, while it was a “good start”, he admits to discovering some surprises after closer inspection. “There was a lot of information to get to grips with at the start and it was spread wide and thin,” he tells us. “But the team is certainly key and they have helped me pull it together through solid collaboration and engagement. Of course, there were a few surprises in the process realm, but that’s what makes this challenge so interesting to me.”
carbmee: Carbon management for complex supply chains
Prof. Dr. Christian Heinrich, Co-Founder at carbmee, discusses his organisation’s journey to being the trusted solution provider for carbon management.
carbmee means carbon excellence for complex supply chains. It is the carbon management solution for automotive, manufacturing, chemical, pharmaceuticals, medtech, hi-tech, logistics, and FMCG industries. Whether to assess emissions holistically throughout the entire company, product or suppliers, carbmee EIS™ platform can create the transparency required for uncovering optimal emissions reduction potential and at the same time, stay compliant with upcoming regulations like CBAM.
carbmee’s journey
Christian Heinrich has been the Co-Founder at the organisation since January 2021. While some executives end up in procurement and supply chain by mistake, for Heinrich he affirms it was “always” the industry for him. As far as he’s concerned, collaboration is a big piece of the puzzle and Heinrich points to his diverse experience in a range of different industries and sectors which have helped him along the way to forming carbmee.
“This was actually one of the reasons my co-founder Robin Spickers asked me to leverage my supply chain knowledge,” he says. “Robin had expertise in sustainability areas like Product LifeCycle Assessments and I had that in procurement and supply chain. We connected together and created carbmee to have scope 1, 2 and 3 solutions for carbon accounting and carbon reduction, which also combines the lifecycle analysis.”
Zorana Subasic, Director SEERU & PSCoE Cluster Procurement at Hemofarm A.D. reveals how a glocal approach is transforming procurement at the pharmaceutical…
Zorana Subasic is all about people. She heads up procurement for Hemofarm, the largest Serbian exporter of medicinal products, with a share of more than 70% of the total pharmaceutical. It sells pharmaceutical products on four continents in 34 states and, since 2006, has been part of the multi-national pharmaceutical giant STADA Group.
Meeting the challenges
Zorana explains that her priority is focusing on people, both within her team and in the wider company, a priority that has been even more important during the last few challenging years and has impacted her leadership style. ”These are areas that were new for me – managing people in ‘business as usual’ times is completely different to what we’ve been through in the last two or three years. It has affected people, and how it was for me to manage people in difficult times – understanding the challenges around us and making sure that people also understand the challenges.”
Onur Dogay, CPO at Elon Group, reflects on a year of procurement evolution and making the function an indispensable partner to the organisation…
A lot can happen in a year. Just ask Onur Dogay. In late summer 2022 he arrived in Sweden from his native Turkey to take the helm of a complex and evolving procurement environment at Elon Group AB, the Nordic region’s leading voluntary trade chain for home and electronic products. That he joined just a month after a significant merger that cemented the company’s market-leading position was no coincidence. Rather, Dogay was brought on board with a specific mission: use his industry experience and passion for transforming procurement to sustain the company’s market status while spearheading growth in new areas of retail and electronics.
And he hasn’t slowed down since. In little over 12 months, Dogay has overseen a procurement evolution that includes setting a new data strategy that’s aligned with the broader company vision, shifting procurement’s role to be less transactional and more of a strategic business partner, improving communication and partnerships both internally and externally with suppliers, and overseeing the greater use of data and technology to enhance forecasting and planning capabilities.
A seasoned procurement professional
A glance at Dogay’s CV to date leaves little surprise at his success. He is a seasoned procurement professional, with more than 20 years’ experience in procurement leadership positions working across internationally dispersed teams in Europe. “My background is particularly strong in retail, consumer electronics, telecom, and IT business units,” he explains, “including at Arcelik, one of the world’s largest manufacturing companies, and also for one of the biggest retailers in Europe, MediaMarkt. At the time of the merger in 2022 here at Elon Group, this experience, as well as the good relationships I had with many of the suppliers and brands we work with now, was the perfect match for the company.”
Microsoft: A sustainable supply chain transformation
In the past four years, Microsoft has gained more than 80,000 productivity hours and avoided hundreds of millions in costs. Did you miss that? That’s probably because these massive improvements took place behind the scenes as the technology giant moved to turn SC management into a major force driving efficiencies, enabling growth, and bringing the company closer to its sustainability goals.
An exciting time
Expect changes and outcomes to continue as Dhaval Desai continues to apply the learnings from the Devices Supply Chain transformation – think Xbox, Surface, VR and PC accessories and cross-industry experiences and another to the fast-growing Cloud supply chain where demand for Azure is surging. As the Principal Group Software Engineering Manager, Desai is part of the Supply Chain Engineering organisation, the global team of architects, managers, and engineers in the US, Europe, and India tasked with developing a platform and capabilities to power supply chains across Microsoft. It’s an exciting time. Desai’s staff has already quadrupled since he joined Microsoft in 2021, and it’s still growing. Within the company, he’s on the cutting edge of technology innovation testing generative AI solutions. “We are actively learning how to improve it and move forward,” he tells us.
Data is the key to unlocking new opportunities and managing risk, but capitalising on the opportunities of data in procurement is not without challenges.
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Over the past few years, the procurement sector has been thrust into the limelight, as CPOs are increasingly being identified as drivers of value creation, cost containment, and risk management.
In addition to business and process innovations, a lot of the changes in the role of procurement are due to a wave of digital transformation sweeping the industry. If digital transformation is the engine driving this elevation of the procurement function, then data is the fuel powering it.
Effectively capturing, organising, and utilising data to generate meaningful insights can produce significant benefits for the procurement process. However, costly investment into data analytics, flawed adoption strategies, and oceans of bad data can turn all the potential for wins into a whole new source of risk for the business. This week, we’ve gathered our top 3 challenges CPOs face when incorporating big data into their operations.
1. Bad data
No, I don’t mean Lore from Star Trek: TNG. Bad Data is a fundamental and pervasive risk to procurement professionals looking to empower their analytics. It’s also a far more widespread problem than many executives would like to believe. Last year, a report by SpendHQ found that 75% of procurement professionals doubted the accuracy of their procurement data, leading to almost 80% of executives outside the procurement function lacking confidence when it comes to making decisions based on that data.
In order for it to make any meaningful contribution to reducing costs, mitigating risk, promoting sustainability and driving meaningful change within the business as a whole, the data used by procurement has to be accurate. Pierre Laprée, chief product officer of SpendHQ, noted in the report that “procurement teams must do more to build and maintain influence within their organisations, including removing the dependency on spreadsheets to become more efficient.”
2. Choosing the right technology
Collecting, managing, and drawing insights from your procurement data is a matter of using the right digital tools. However, choosing the right digital tools—especially with CPOs often facing pressure from stakeholders to transform their operations digitally—can be a complicated prospect with potentially severe negative consequences ranging from sub-par outcomes and wasted budgets to catastrophic data breaches.
A report by Productiv found recently that, while “procurement and IT are being inundated with software access, vendor intake and renewal requests,” the number of applications and subscription services being managed by the average business has risen by more than 30% in the past two years. Combined with growing workloads, skill shortages, and an unclear vision for handling these growing technology stacks, Productiv’s report notes that “this patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos. Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.”
3. Creating spend data visibility
Dark purchasing refers to the phenomenon of procurement expenses incurred outside a business’ defined procurement process. It’s uncontrolled spending that procurement can’t see, but that still gets added to their numbers at the end of the quarter.
Big data and procurement is often thought of in terms of its ability to help understand the world outside the business’ walls—logistics, pricing, supplier behaviour throughout the market in response to market changes—but effectively deploying data analytics to understand why dark purchasing is happening, when, and by whom is a vital step in figuring out how to reduce its impact on the company.
Unfortunately, this presents a serious challenge, as many procurement departments lack a cohesive data organisational strategy; data is often scattered throughout multiple silos in the organisation, hidden from procurement in much the same way that unapproved purchasing hides until quarterly expense reports. Overcoming this challenge and creating a holistic, accurate view of company spend—both within the procurement function and outside it—is one of the greatest opportunities and challenges presented by the infusion of big data into procurement.
B2B procurement is headed for a new, more dynamic, digitalised era defined by a more strategic approach to traditional processes and new challenges.
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The procurement industry isn’t a back-office function anymore. Much like the transition of IT departments from obscurity to the C-suite over the past 10-15 years, procurement is making its way into the limelight.
“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” said Alexandre Gagnon, vice president of Amazon Business Worldwide, at a recent Amazon Business event attended by more than 1,000 procurement leaders across the public and private sectors.
“The procurement function is now cross-disciplinary, spanning both functional and strategic purviews as buyers are planning to invest more in technology and optimisation while future-proofing their companies and organisations,” added Gagnon.
Procurement’s transition
The 2024 State of Procurement Report released by Amazon Business in conjunction with the event points to an array of indicators that the nature of procurement is fundamentally changing. From the traditional procurement workloads concerned with day-to-day purchasing, to a more recently emerged responsibility of future-proofing the business against disruption (by another pandemic, for example), procurement’s goals are “ever-growing”.
In order to keep up, the discipline is “transforming at lightning speed,” claims Gagnon in the introduction to the report.
Data gathered from over 3,000 procurement professionals supports this inclusion. Key findings include the fact that 95% of decision-makers say their organisation currently has to outsource at least a portion of their procurement to third parties, the fact that 95% of decision-makers say their procurement function has “room for optimisation”, and 53% of respondents who say their procurement budgets will be higher in 2024 than they were this year.
Tech-driven procurement
Technology investment is expected to be high on the agenda, as procurement leaders attempt to bring increased visibility and resilience to their departments. A remarkable 98% of decision makers said they were planning to invest in analytics and insights tools, automation, and AI for their procurement operations, with the (anonymous) VP of purchasing at a major global bank in the US saying that “Making investments in the right tools and technology [is critical] because you rely on data as a procurement organisation. There is … spend data, contractual data, invoices, and more. Without the right tools in place, you can only do so much [with your data].”
Reflecting on the changing role of procurement in the modern enterprise, Gagnon added that “Ultimately, procurement not only keeps operations running, but plays an integral role in achieving key organisational goals, and with smart business buying, companies have procurement solutions to serve as a growth lever for organisations.”
The assistant will use natural language processes and AI to perform “thousands of procurement tasks”.
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The latest in a small flurry of generative AI-powered virtual procurement assistants is hitting the market. Earlier this month, Relish, a B2B app developer based in Ohio, announced the release of its new procurement assistant—a virtual assistant product powered by generative artificial intelligence and designed to intuitively interact with users while performing “thousands of procurement tasks”.
“What we’re offering is a solution that truly frees users from the menial to engage in the meaningful,” said Ryan Walicki, Relish CEO, in a statement to the press. He added that the Relish Procurement Assistant would revolutionise the way businesses handle their procurement systems and processes, claiming: “By leveraging large language models, this single interface spans all procurement systems and platforms and can be custom fit to any enterprise solution ensuring workflows are never interrupted.”
The rise of generative AI
Relish isn’t the first company to utilise a combination of generative AI and large language models, like ChatGPT, to create a more naturalistic interface between users and complex systems for managing data. In November, Californian tech firm Ivalua released an Intelligent Virtual Assistant powered by generative AI as part of its platform, making similar claims that the technology would eliminate busy work, freeing up employees for more strategic activities.
Relish works in a similar way, plugging into an existing procurement management platform, and using artificial intelligence and natural language processing to “intuitively interact” with users in a conversational way, giving them detailed insight into their workflows.
According to Relish, the technology can perform numerous tasks, including supplier management, sourcing, contract management, supply chain, and purchasing.
Where Relish differs from other offerings on the market is in its alleged ability to “[adapt] to any platform and workflow preference.”
According to Jeremy Reeves, Relish Senior Vice President of Product: “The adaptability helps users get the most out of their procurement enterprise software, maximising their return on the investment… It brings a new dimension to how users will go from being taskmasters to being conductors of their enterprise systems.”
Sapio Research found that just 48% of organisations are confident they are accurately reporting Scope 3 emissions through their P2P process.
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More than half of the 850 procurement leaders in the US, UK, and Europe surveyed earlier this year could not claim to be “very confident” in their organisation’s ability to accurately report Scope 3 emissions, according to a new study conducted by Sapio Research and commissioned by Ivalua.
While 48% of leaders were confident in the accuracy of their companies’ reported emissions figures, nearly two-thirds (62%) of leaders surveyed admitted that “reporting on Scope 3 emissions feels like a ‘best-guess’ measurement.”
A significant majority of the organisations were confident that they are on track to meet net zero targets. However, the report also found that many don’t have plans in place for:
Adopting renewable energy (78%).
Reducing carbon emissions (68%).
Adopting circular economy principles (72%).
Reducing air pollution (67%).
Reducing water pollution (63%).
Procurement’s role
It has long been recognised that procurement has a vital role to play in the reduction of environmental impact in organisations’ supply chains, with as much as 90% of a company’s emissions falling within the Scope 3 band.
“Organisations are aware they must urgently address sustainability and understand the cost consequences of not doing so. But this lack of confidence paints a negative picture,” comments Jarrod McAdoo, Director of Sustainable Procurement at Ivalua.
“A lack of perceived progress could fuel accusations and fears of greenwashing, so it’s important to remember that obtaining Scope 3 data is part of the natural maturation process. Many sustainability programs are in their infancy, and organisations need to start somewhere. Estimated data can help determine climate impact and contribute to building realistic, actionable net-zero plans. Over time, organisations will need to make significant progress on obtaining primary Scope 3 data and putting plans in place, or risk financial penalties as well as ruining reputations in the long run.”
Regulatory and public scrutiny continues to mount against both public and private sector polluters. A report released in December highlighted the devastating annual emissions by militaries around the world, finding armed forces to not only be one of the world’s largest fossil fuel consumers (5.5% of all global emissions), but that the US military alone has a larger environmental impact than some developed countries. The scale of military contribution to the climate crisis, in addition to the lack of transparency when it comes to disclosing those figures, is a major issue that is also echoed in the private sector of the civilian world.
Are some companies ‘unintentionally greenwashing?’
In the private sector, both activism and legislation continues to move (too slowly, but it’s a start) against corporations responsible for the climate crisis and pollution. In the UK, the High Court in London ruled that Nigerians affected by oil spills the corporation promised to clean up can bring legal action against the British multinational. The state of California is itself suing America’s largest oil companies for their role in exacerbating and covering up the effects of climate emissions for decades.
More recently, corporations that rank among the world’s largest polluters have been accused of adopting environmentally friendly rhetoric in order to make themselves appear more committed to environmental sustainability than they, in actual fact, are. The practice, known as “greenwashing”, has been criticised by politicians, activists, and members of the scientific community.
McAdoo notes that the inability to accurately report Scope 3 emissions—taking a “best-guess” approach—could be a contributor to organisations looking to avoid unintentionally greenwashing their emissions data by misrepresenting themselves.
“Nearly two-thirds of U.S. organisations agree that an inability to measure supplier emissions accurately makes it hard to turn words into action,” McAdoo continued. “There is a clear need to adopt a smarter approach to procurement. Organisations need granular visibility into their supply chains to ensure they can measure the environmental impact of suppliers but also collaborate with suppliers to develop improvement plans. Only with this transparency can organisations showcase meaningful sustainability progress and avoid accusations of greenwashing.”
Coupa Software and Acquis Consulting Group has released an eBook offering tips on how to navigate the challenges of the procurement landscape.
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A new eBook from Coupa Software and Acquis Consulting Group providing guidance on how to navigate the challenges of the procurement landscape has been released.
The eBook offers real-life success stories from the likes of Dent Wizard, Sun River Healthcare and Eyecare Partners while uncovering essential strategies for enhancing efficiency and driving growth.
Additionally, the eBook provides expert guidance on mastering procurement and compliance in today’s economic landscape as today’s leaders are forced to re-examine their internal processes, particularly when it comes to business spend management.
As a result of rising inflation, as well as the cost of capital and labour, it has meant businesses need to identify new ways to improve margins, drive sustainable growth and scale productivity. However, many existing solutions at mid-market companies are already stretched to the limit.
This led to Dent Wizard, Sun River Healthcare and Eyecare Partners coming to the same conclusion – digital transformation can take painful and antiquated processes and make them stress-free and efficient.
The new eBook is considered a must-read for leaders seeking to overcome the complexities of today’s procurement space amid a challenging economic climate.
To find out more about how Dent Wizard, Sun River Healthcare and Eyecare Partners recommend organisations can transform their business spend management, download Coupa and Acquis’s free eBook here.
AI and Machine Learning-powered analytics could help security teams flag and prevent fraud in their procurement functions.
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Procurement fraud is costly and hard to prevent, but with the right tools, organisations could see red flags earlier and respond in time rather than too late.
According to the Association of Certified Fraud Examiners (CFE), organisations lose 5% of their annual revenue to fraud, with the median loss per case totalling $117,000, and the average being $1.7 million.
Supply chains and procurement functions are especially vulnerable to fraud—often comprising long and winding networks, intricate webs of relationships, vast inventory assets, and multiple transactions along the S2P journey. The procurement and supply chain functions of retailers and manufacturers are especially vulnerable.
Frequently, procurement fraud is the result of a malicious individual within the organisation, although vendors and partners can also be responsible. Bid rigging, intellectual property infringement, inventory theft, and product counterfeiting are all examples of occupational fraud within the procurement process.
To address these challenges, companies must implement proactive measures. The CFE report noted that nearly half of fraud cases occurred due to a lack of internal controls, or an overriding of insufficient existing controls. It also found that anti-fraud controls were effective, resulting in lower losses and quicker fraud detection.
Fraud is prone to thrive in the procurement process, and can have devastating consequences, but the fight against the threat isn’t hopeless, and new technologies are proving especially effective in stamping out the issue.
In addition to traditional anti-fraud measures like strengthening internal controls, performing due diligence, and conducting regular quality checks, organisations can fight fraud in their procurement and supply chain functions by harnessing the power of AI and Big Data.
Fighting fraud with Big Data
AI analytics of Big Data sets can do more than improve efficiencies and predict trends in the movements of goods; these types of analytics excel at pattern recognition and, once correctly trained, can identify subtle changes in activity within the procurement function and supply chain that could point to fraud.
According to Isabelle Adam, an analyst at the Government Transparency Institute in Budapest, and Mihály Fazekas, founder of the Institute and assistant professor in the School of Public Policy at Central European University, “With the increasing use of electronic and online administrative tools — such as e-procurement platforms — making administrative records readily and extensively available in structured databases, public procurement has become a data-rich area.”
This wealth of data, if improperly handled, can become a place for fraud to hide, but if big data analytics are applied, they argue, it “can serve as a tool for auditors to identify and prevent fraud and corruption.”
The top seven trends driving procurement’s transition from the back-office to the boardroom in 2024.
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The year ahead has the potential to be a watershed moment for the procurement industry, as infusions of leading edge technology and process innovation conspire to enable procurement’s shift from spend management to strategic leadership. Increasingly, leadership is recognising the potential of procurement to guard against risk, drive sustainable practice, and be a key enabler in helping the business identify and capitalise on new opportunities.
Procurement is undeniably on a journey from being a back-office cost-cutting function to a key driver of strategic wins for the business. In 2024, procurement teams should continue to capitalise and build upon existing wins as they continue their optimisation journey. For those lagging behind, the time to begin their transformation from functionary to value orchestrator is now.
2. More space strategic, value-add work
A vast majority of decision makers surveyed by Amazon Business last year revealed that they needed to outsource elements of their procurement function to a third party. It’s a known fact that the current procurement industry struggles with a lack of the necessary human resources, skills, and systems to keep pace with mission critical operational demands. With those demands only expected to get more complex in 2024, procurement teams need to find ways to spend less time on low value manual work and refocus their efforts on high-level, strategic activities. Adopting low-code platforms, AI, process automation, and other technology could be a way to execute on this necessary transformation.
3. More investment (and hype) surrounding AI, automation, and analytics
2023 was the year when generative AI exploded into the spotlight, attracting massive amounts of hype, interest, and investment. However, just a few weeks into 2024, you can see excitement starting to cool, as organisations struggle to find effective applications that justify the price of admission.
In 2024, we can expect to see massive AI utilisation in data analytics, in process automation, and other elements of the S2P process, but generative AI adoption in ways that produce meaningful benefits are likely more than 12 months away.
4. Low code, higher automation in S2P platforms
Managing the source to pay process is increasingly complex, and time consuming to orchestrate. In 2024, with pain points like this increasing complexity (due to climate instability, compliance regulations, etc.) and talent shortage, the adoption of more low-code platforms will increase the ability of procurement teams to automate significant elements of their operations.
5. Scope 3 comes under greater scrutiny
A recent report found that around two thirds of procurement professionals in the US, UK, and Europe feel that their Scope 3 emissions reporting is more “best-guess” than hard fact. With regulatory scrutiny—not to mention public opinion—growing less and less lenient with regard to greenwashing and climate inaction, procurement teams need to make 2024 the year they take meaningful action to create transparency beyond Scope 1 and 2 emissions.
This obviously represents a significant challenge. Scope 1 and Scope 2 emissions are relatively straightforward compared to the sprawling, often opaque morass of Scope 3. Inaction is not an option, however, if organisations are to meaningfully pursue their net zero by 2030 targets.
6. Mission-critical Big Data
Collecting, managing, and effectively drawing insights from big data is and will remain one of the defining challenges for the modern enterprise. A proliferation of data from IoT devices, cloud-based platforms, and a general increase in the amount of technology being integrated into the procurement process (not to mention an increase in awareness of how important it is to gather as much data as possible) is leaving some industry players overwhelmed.
Vast silos of data with no meaningful way to draw insights from the unstructured mass create more problems than they solve. 2024, then, should be the year that procurement not just recognises the importance of data, but the absolute criticality of putting systems in place to manage it effectively.
7. AI achieves greater autonomy in planning tasks
Even as the shockwaves of the COVID-19 pandemic recede from the global supply chain, macroeconomic forces still conspire to place increased pressure on supply chains and procurement teams. Forward planning is more important than ever and procurement professionals are finding themselves increasingly struggling to meet the demands of “a more complex, multi-tiered, more nuanced world.”
Using artificial intelligence to more effectively run scenario analysis could have a transformative effect on the S2P process, allowing low-touch planning driven by AI to eliminate manual work, analyse data at scale, identify and flag anomalies, and even start making suggestions to humans as to how to proceed. There is still some doubt over AI’s ability to handle tasks consistently with minimal human oversight, but the tide of public opinion is starting to change.
New data from Emergen Research suggests the procurement technology market will be worth approximately $17.9 billion in 2032.
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Increased adoption of cloud services, artificial intelligence (AI) and process automation are driving strong growth in the global procurement software market.
According to a report released this week by Canadian market research firm Emergen Research, the global procurement software market is expected to register a rapid revenue CAGR of 10.4% over the decade following the 2022 financial year—from a global valuation of $6.67 billion at the start of the forecast period to $17.90 billion in 2032.
The report’s authors found that “increasing use for cloud-based procurement solutions and rising need for automated and efficient procurement processes are key factors driving market revenue growth.”
The talent challenge
In the face of a talent shortage—exacerbated by growing demand and increasingly supply chain complexity—the report expects to see cloud-based procurement systems attain widespread adoption.
“Cloud-based procurement systems have many benefits such as easy deployment, flexibility, scalability, and lower infrastructure costs. This software allows for real-time access to procurement data, leading to better informed and timely decisions,” note report authors. “In addition, this software also makes it possible for companies to access procurement software at any time and from any location, which makes it easier to manage procurement procedures globally.”
Is automation the solution?
Artificial intelligence and machine learning will also support procurement teams in overcoming the pain points presented by the skill shortage, stricter regulations, and supply chain instability. The report suggests that the technologies—if correctly adopted—could be instrumental in “helping companies to automate increasingly complex procurement processes while enhancing decision-making.”
However, high up-front costs may present an insurmountable barrier to entry for some organisations, and a deterrent for others, the report notes. These costs include software licensing fees, implementation costs, training expenses, and any required hardware upgrades. Emergen researchers also note that concerns over data privacy and cyber security could slow adoption of cloud-based solutions.
Kathleen Anne Harmeston discusses some of the key items sitting on the 2024 agenda amid seismic digital transformation.
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Procurement, in my opinion, has experienced one of the largest direct knock-on effects of unprecedented inflation and geopolitical issues over the last two years (including supply-chain issues caused by Brexit, the US-China Trade War, and European instability of the Russia-Ukraine War).
Procurement’s challenges
We are seeing this impact in the form of cost increases across nearly all industries and challenges in securing and maintaining reliable, dynamic, and cost-effective supply partners.
Boardrooms are struggling to understand why they should invest further funds to bolster the CPO remit, including investment to help them technologically revolutionise the business and the function. Possibly this is due to a lack of visibility on how procurement can be a high performing business partner, which offers a proactive, seamless, automated and value-adding service supporting profitability and ESG efforts. CPOs are now tasked to sell the benefits of investing in procurement over and above the safety blanket of ‘cost reduction’ as the signature sell.
The above obstacles will also be underpinned by the phenomenal opportunity of integrating AI into the procurement function alongside many other digitisation opportunities. Those companies who welcome technological innovation of their P2P systems and supplier management processes are likely to have better competitive advantage and risk management as a consequence.
The general consensus I have gained from speaking with my peers are:-
Profitability (of course).
Agility and digital readiness within the P2P and business management systems.
Delivering ESG for the firm and not just giving “lip service” to the exercise.
Risk management within the elaborate complex web of supply chain networks.
Driving Innovation through the supply chain.
2023 saw the same old issues in limited control over and transparency in third-party spend. This was due to supply instability, semi manual processes, rising costs and value leakage from off-contract spend. With this in mind, boardrooms are more likely than ever to push back on the CPOs call for further investment. But this creates a circular argument of investment needed in the function, combined with business’ commitment to approved supplier compliance to meet the board challenges in 2024.
Moving to 2024
Digital readiness has become imperative as team members continue to work in hybrid or remote ways, but also because inefficient manual processes and limited digital visibility and automation of spend management causes significant lost opportunity and risk. Recent studies from KPMG and SAP show that 37% of procurement processes are still semi auto and manual and 77% of Executives complain they cannot access a good spend data real time. These studies have been further supported by research from Ivalua which states:
53% of procurement and supplier management processes have yet to be digitised.
22% of procurement teams estimate that they are wasting their time each year dealing with paper-based or manual processes.
50% of procurement leaders think the rate of digitisation within procurement is too slow.
47% say existing procurement systems are not flexible enough to keep up with constant change and market uncertainty.
Inefficient procurement processes often result in disorganised data management and reporting -ultimately leading to executive frustration. These issues further invite problems such as duplication of payments or delays in payment.
What are the technological innovations for 2024?
The shape and structure of the procurement division in the future will change quite dramatically with the ever-increasing integration of AI. When the second wave of more sophisticated generative AI software arrives – which improves its reliability of output, data leakage, and data security – AI and machine learning may well plug the gap of manual human input for certain portions of the procurement division. With AI (or any kind of automatic digitization for that matter) we will soon embrace the automation and celebrate the headcount savings in procurement, and instead ask for investment in greater strategic skills and the next level of development for our procurement staff.
AI truly has the potential to transform procurement. From specifically supply chain management, to helping with demand forecasting and inventory management to logistics optimisation, new product development cycle time improvement, and supplier engagement. AI will also help with managing our spend via creating predictive reports for cost reduction opportunities.
Specifics for CPOs look for in 2024
Advanced AP Invoice Automation Platforms
Advanced accounts payable invoice automation platforms process invoices in any format with good speed and accuracy. It means going touchless eliminates the pain of managing paper invoices. By reducing the cost per invoice, shortening cycle times, and increasing spend control, these cloud-based electronic invoicing systems offer built-in matching and automatically identify errors, duplicates, and overpayments. They ensure payments are only made for ordered and received goods. Many APIA platforms can be tailored to specific organisational needs. This is with features like cognitive OCR invoice capture, smart coding, and invoice approvals to further streamline the process. These platforms can integrate with existing financial or ERP systems for seamless digital payments. While their advanced features like duplicate invoices and fraud checks, along with integrated exception handling, demonstrate the future of invoice processing in the P2P cycle.
Mobile P2P solutions
Mobile platforms are becoming more useful and available in the P2P process by shifting to cloud and software-as-a-service (SaaS) solutions. The convenience of mobile apps allows users to manage procurement activities on the go. This is also while offering real-time access to crucial data and processes. This mobility not only increases efficiency but also enables quicker decision-making. CPOs can also integrate their P2P systems with other cloud-based applications, such as ERP, CRM, and BI, to create a seamless and holistic view of your procurement performance.
Data analytics and visualisation
Data analytics tools are the applications that enable you to analyse your P2P data in an actionable way. These tools will help you improve your decision making, performance measurement, and reporting. For example, you can use dashboards, charts, and graphs to visualize your spend patterns, savings achievements, and compliance levels. You can also use predictive analytics, machine learning, and natural language processing to generate forecasts for your P2P strategies. Visualisation software has also made huge strides in being able to share new product development ideas. This is also while helping progress the supplier collaboration and management agenda.
Integration of blockchain for greater transparency and security
Blockchain technology is rapidly transforming the P2P sector with its unparalleled transparency and enhanced security features. By integrating blockchain, businesses are able to establish immutable records for every transaction. This will significantly boosting both transparency and security within their procurement processes. This technology is particularly effective in fraud prevention and compliance adherence and supply chain tracking. It ensures that each transaction is reliably recorded and easily verifiable, underscoring its growing importance in the P2P landscape.
Supplier collaboration
Supplier collaboration is the practice of building long-term and mutually beneficial relationships with your key suppliers, based on trust, transparency, and value creation. It can help you improve your supplier performance, reduce risks, and drive innovation. For example, you can use supplier portals, e-procurement platforms, and digital contracts to communicate with your suppliers more effectively. You can also use supplier scorecards, feedback mechanisms, and incentives to monitor and reward your suppliers for their performance.
Sustainability and social responsibility
Global supply chains are complex and can be multi-tiered. This presents a serious challenge for CPOs with limited visibility into the supply chains for sustainability and social responsibility. AI-powered reporting will enable teams to keep track of supplier and product information. This is via using global data sources from different countries, regions and languages. The key is to raise the issues and gain the sponsorship to address the risks proactively. Mapping systems and technology can help but only if this policy is embedded within the business. There is movement from tier one contract management of supply chains to managing the supplier networks.
User experience and engagement
User experience and engagement with your P2P system, such as ease of use, functionality, design, and feedback is important for the function. Alongside engagement, it can help you increase your user adoption, satisfaction, and loyalty. For example, you can use mobile apps, chatbots, voice assistants, and gamification to make your P2P system more accessible, intuitive, responsive, and fun.
Concluding remarks
The P2P landscape in 2024 will be shaped by technological advancements and a shift in business priorities. From the integration of AI and blockchain to the emphasis on sustainability and mobile solutions, these trends are redefining how companies approach procurement and supplier relationships. Despite executive reluctance to engage in further investment, during periods of inflation and market stagnancy, digitisation must be embraced with the option to either pivot or perish. Adoption of new systems and processes requires training and capacity planning within procurement departments. This is so that the business-as-usual services can continue without a downturn in service levels. Businesses that adapt to these changes will enhance their operational efficiency and position themselves strategically for future growth and success.
Fairmarkit has revealed a partnership with ServiceNow and unveiled an automated quoting integration in a bid to scale efficiency.
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Fairmarkit has announced a new partnership and integration with ServiceNow to boost productivity for customers.
The company, which is a leading autonomous sourcing solution set on transforming the procurement of goods and services, has unveiled an automated quoting integration with the ServiceNow platform to drive efficiency.
Scaling efficiency
It is anticipated that the move will help enterprise procurement increase spend under management, source goods and services efficiently as well as operationalise DEI and ESG initiatives through an automated quoting process.
With Fairmarkit’s automation, AI and GenAI capabilities embedded within ServiceNow’s Source-to-Pay Operations solution, end users can automatically create, send and award quotations from within the ServiceNow interface which streamlines processes and decreases turnaround time for competitive quoting.
Buyers maintain the same level of user experience and functionality they expect from Fairmarkit sourcing including reduced cycle time, greater visibility into spend, higher savings and improved compliance and diversity maintenance from within the ServiceNow interface.
Initiated via a ServiceNow sourcing request, requests for quotes (RFQs) are automatically sent to suppliers and bids are collected and presented to the user for an award decision within ServiceNow. Once an award is made, a purchase requisition is created and the customer’s desired ServiceNow workflow is continued.
Revolutionising the way forward
Kevin Frechette, CEO of Fairmarkit, commented: “Fairmarkit’s integration with ServiceNow furthers our commitment to revolutionising the way all organisations buy and sell. We are fired up to work collaboratively with joint customers to ensure the most user friendly and efficient purchasing process possible.”
Kirsten Loegering, VP, Product Management – Finance & Supply Chain Workflows at ServiceNow, added: “From enterprise end users to seasoned procurement professionals, automated quoting with Fairmarkit will simplify the intake-to-award process, while also increasing opportunities for costs savings and efficiency gains. Establishing this partnership with the market leading sourcing solution opens the door for enterprises to bring more spend under management, enables end users to competitively quote with little effort, and paves the way for more value and less manual work.”
The ability to scale available space up or down on demand could provide procurement teams with an invaluable degree of flexibility.
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From retailers to manufacturers, enterprises that handle large amounts of product and raw materials have always needed places to put it. As a result, the vast majority of industrial real estate is devoted to warehousing, with 11.1 billion of the 14.8 billion square feet of industrial real estate in the US classified as warehouse space.
Warehouse square footage is essential, not only to logistics, but to the procurement department. You can’t buy things if there’s nowhere to put them. Procurement teams working to support the needs of the business as a whole are therefore bound by the limitations of the physical space the business maintains for storage.
Changing demands
A procurement function’s ability to respond to changing demands—either from within the company or when performing direct procurement in anticipation of demand from without—is limited by the physical warehousing space maintained by the enterprise. However, more space isn’t always the solution, as real estate is costly to buy, develop, maintain, secure, and so on. Small and even medium sized enterprises may not have the capital or resources to maintain their own warehouse space, and—in an era of e-commerce-first business models—may have more distributed business models than can be supported if warehousing space is internally owned.
The answer to giving procurement teams the flexibility they need to store, move, and acquire necessary stock for the business could lie in On-Demand Warehousing.
On-demand warehousing
The model “allows eCommerce businesses to access warehousing solutions as and when needed, without making a long-term commitment, through a pay-as-you-go system,” write Dr Banu Ekren, Dr Ismail Abushaikha and Dr Hendrik Reefke in a recent report. By using a platform to purchase space within a larger warehouse on a short term basis, businesses gain the flexibility to grow (or shrink) their procurement of inventory in line with the demands of their business, without the need for long-term rental agreements or costly real estate purchases that the business “might” grow into down the line.
On-Demand Warehousing platforms can also reduce environmental impact by consolidating inventory from multiple buildings into singular facilities—reducing the need for heat, electricity, etc.
From shared responsibility to “blackmail”, an array of relationships exist under the umbrella of “partners” in the source-to-pay value chain.
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Whether in earnest or just in cynical pursuit of a hot new buzzword, it seems like no one in the procurement and supply chain sectors actually buys things anymore. Instead, goods are sourced from a strategic partner—implying a simple transaction has been replaced by a closer, more meaningful and, supposedly, beneficial relationship.
For example, in the fashion industry—traditionally one of the most transactional industries for buyer-supplier relationships—McKinsey’s 2023 CPO survey found that even between fast fashion brands and their suppliers, relationships are becoming more strategic, long-term, and mutually beneficial.
The number of transactional relationships reported by CPOs in the fashion industry reportedly fell by more than 50% between 2019 and 2023, from 22% to just 10%. That number is predicted by McKinsey’s analysts to drop to just 3% by 2028, as more than half of relationships in the industry evolve into “long-term strategic partnerships with volume commitments”.
The future of strategic partnerships?
According to McKinsey, the future of strategic partnerships between procurement teams and their supplier ecosystems looks bright in the fashion industry. This should be good news across other fields like medical supplies, consumer goods, food, and industrial manufacturing—as fashion is perhaps the industry with the most historically hostile relationship between buyer brands and the suppliers who manufacture their clothes, often for no guarantee of purchase, at rates so low they often result in untenable labour conditions. If some of the most predatory supply chains on the planet can grow into thoughtful, considerate strategic partners, then it surely bodes well for the rest of the world.
Or it would, if any of that were particularly true.
I’m not saying McKinsey or the CPOs that took their survey were lying. I’m sure they truly do believe their transactional relationships are evolving into strategic partnerships. But, as Maliha Shoab pointed out in a piece for Vogue Business this week, while “Those in charge of contracting suppliers for fashion brands say they are investing in longer-term strategic partnerships,” their suppliers “tell a different story.”
The reality is that research conducted by Fashion Revolution found that just 12% of brands publish a responsible purchasing code of conduct (virtually the same as last year and the year before that), and data gathered by Sanchita Saxena—visiting scholar at the NYU Stern Center for Business and Human Rights and senior advisor at human rights-focused consultancy Article One—points to truly collaborative and strategic partnerships between procurement teams and their suppliers being much rarer than procurement executives would seem to believe.
Reimagine supplier relationships
Some suppliers Saxena spoke to even characterised their relationships with fashion buyers as “blackmail”, revealing to Vogue Business that one supplier in particular recalled: “The company was threatening [us] saying, if we don’t agree on a reasonable discount, maybe next season [our] business volume might be affected. We were also told that if we don’t give the discount then there might be cancellations coming, and that kind of pressure… I wanted to give them a $20-25,000 discount, but eventually with the pressure I have to probably agree on almost double that amount… we didn’t want to offend them by any means.”
Other relationships were more mutually beneficial, and it does seem as though there is some action behind the partnership rhetoric in some areas of the fashion industry.
The point is, however, that procurement professionals’ imagined relationships with suppliers may be a whole lot more strategic than they actually are. There is a fundamental power imbalance between supplier and buyer in many industries, where small organisations farther up the value chain struggle to dictate terms to large corporations looking to cut costs more than build meaningful long term relationships.
The five most important challenges for procurement teams to meet in 2024 and beyond, according to Amazon Business.
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It’s no secret that procurement is undergoing the same backroom-to-boardroom transformation (dare I say “glow up”) that the IT department went through over the last decade. If every business in 2023 is a technology business, then by the end of the decade, it doesn’t feel unreasonable to claim every business will be a procurement business.
However, with prestige and importance comes pressure. The modern procurement function already faces challenges, from supply chain disruptions and rising prices to the existential need to reduce emissions, which will only grow more complex as the discipline moves close to the forefront of the modern enterprise. It’s no wonder that, while Amazon Business’ “2024 State of Procurement” report found that the majority of procurement budgets (54%) were set to rise next year, an overwhelming number of respondents confirmed that their procurement functions are in need of optimisation.
With 2024 still in its first month, we’ve broken down the five highest priorities for procurement leaders to focus on over the next 12 months, as well as heading into 2025.
1. Retaining and developing existing talent
Lastly, even more important than attracting new talent, the number one priority for procurement teams in 2024 will be retaining the talent they already have, and developing those procurement professionals to marry knowledge of the business and industry with an understanding of new trends, techniques, and technologies.
2. Attracting top talent
A report released by Gartner in December found that more than 85% of procurement directors and executives believe that their teams contain “adequate talent” to meet the future needs of their organisations’ procurement function. The demands placed on procurement professionals are changing, as the adoption of new technologies make the profession more data-driven and strategically focused on business value creation than ever. An evolving profession means attracting new talent will be a vital priority for procurement leaders in the coming years.
3. Reducing purchasing costs
Cost was king before the pandemic and, while procurement teams may have more than just their bottom line in mind, it’s still one of the most important differentiators for the function. Not only is procurement a key driver of efficiency within the modern enterprise, but costs are rising across the industry, with Amazon Business reporting that “Costs and Budgets” were the leading risk factor facing procurement over the next two years.
4. Refining procurement practices across organisations
Even as a newly celebrated discipline with a greater role to play in the modern organisation, a key indicator of a successful procurement strategy is that, most of the time, other departments don’t know it’s there. A successful procurement function empowers other parts of the business to make purchases with autonomy, supporting them in making decisions that are compliant, efficient, and cost effective. Developing the procurement practices that create good procurement habits across an organisation—not just in the procurement department—will be a key priority for procurement teams going forward in 2024.
5. Building more resilient, agile supply chains
If the 2020 COVID-19 pandemic taught us anything it’s that disruption is not a matter of “if” but “when”. Global supply chains—driven almost exclusively by cost-cutting parameters for decades—were decimated by the pandemic, and in the wake of lockdowns it has emerged as hard-won wisdom that the procurement departments of the future need to look at more than cost when building a supply chain. In the Amazon Business report, 81% of respondents revealed that they have internal or external mandates to purchase from different types of certified sellers.
Blockchain promises added transparency and security for the procurement process, but are the benefits worth the price of admission?
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Blockchain—the decentralised ledger technology that powers cryptocurrencies and NFTs—could be an immensely disruptive force in the procurement and supply chain management sectors. We’re going to take a look at how blockchain might impact procurement, and whether it represents a meaningful innovation or if the costs outweigh the benefits.
Blockchain: the hype
Using a combination of different technologies, including distributed digital ledgers, encryption, asset tokenization, and immutable record management, blockchain creates an unbroken and tamper-proof (in theory) chain of information.
For example, storing the entire service history of a vehicle, the transaction history of a house, or the provenance of a piece of art on a blockchain theoretically renders it trustworthy and incorruptible. A potential buyer could review the timestamped information included on the blockchain and be confident in its accuracy. In principle, blockchain could reduce or remove the need for intermediaries in highly regulated and complex transactions—like real estate, for example.
“Have you bought a house lately? Imagine if you could have transacted with the seller directly, even though you had never met, confident that the deal would be recorded in a way that neither of you could change or rescind later,” write Gartner analysts David Furlonger and Christophe Uzureau, suggesting that “You wouldn’t have to reconcile rafts of personal information with a real-estate agent, mortgage broker, insurance agent, property inspector and title company” if you were making a transaction using the blockchain.
Furlonger and Uzureau suggest that record keeping and verification is just the beginning and, once developed and combined with other technologies (characterised by lots of hyper and limited real world applications) like artificial intelligence (AI), the Internet of Things, and the Metaverse, the real potential of the technology will be unleashed, creating “whole new social and economic constructs in the peer-to-peer age of Web3.”
Blockchain: the reality
In actuality, Blockchain outside of applications for cryptocurrency isn’t actually… very interesting? It’s certainly not new. Blockchain technology not used to underpin a cryptocurrency is just a distributed append-only data structure. Often there are some users that are allowed to make additions to the structure. In the real estate example used Furlonger and Uzureau, that might include the homeowner, a surveyor conducting an appraisal of the property, the utility company providing electricity and water to the house, and professionals hired to perform maintenance on the property. A private blockchain could collect and verify the history of a property like rings on a tree, and provide an authoritative account that is, in theory, free from tampering. The thing is, that sort of verification is called a consensus protocol, and they’ve been around since before the 1960s—as have append-only data structures.
The reality is that the new, shiny applications for blockchain aren’t actually very useful. Supposedly, Blockchain technology offers up a way to verify information (or conduct a transaction) without relying on an intermediary, or blindly trusting a third party. “Trust-less” is the phrase that gets thrown around a lot. However, the result is often that you’re just trusting the technology underpinning the blockchain over a human or a public institution.
Building trust
As Bruce Schneier pointed out in an article for WIRED, “When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. Your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there’s a bug in the code of your smart contract, you lose all of your money. And if someone successfully hacks the blockchain security, you lose all of your money.”
One glaring example was the 2019 case of cryptocurrency exchange CEO Gerald Cotten, who died while being the only person with the password necessary to access US$145 million worth of other people’s Bitcoin. Far from being trustless, it would seem the people who lost access to their money were placing their trust in a single individual who died, leaving them no physical or legal recourse to get their money back.
There’s also the very valid criticism of blockchain-based technology that it’s an environmental disaster. NFTs caught most of the heat for this over the past few years, but all blockchain-based technology needs to be stored somewhere in a constantly active server. As noted by the NASDAQ in a report from earlier this year, “The energy consumption of blockchain technology results in significant greenhouse gas emissions, which contribute to climate change.”
So, blockchain is bad?
Not necessarily. I, personally, will stake what reputation I have on the fact NFTs and cryptocurrencies are misguided and valueless gimmicks at best and insidious, cynical techno-cults (that burn fossil fuels more enthusiastically than the UV lights at the Bored Ape convention burned out crypto bros’ retinas) at worst.
However, remember the boring version of blockchain technology? The append-only data sets we talked about before may not be new or especially sexy, but they’re an element of blockchain technology that could be incredibly useful for the procurement sector.
Blockchains in procurement
The procurement sector has traditionally struggled with opacity. Sourcing goods—especially from overseas markets—through networks of distributors and middlemen can muddy the waters and conceal vital steps in the source-to-pay process. The origin of goods, labour practices, contact with modern slavery or deforestation, can all be concealed in a murky supply chain.
Tracing the progress of an item from its raw materials through to a finished product is “often a challenge for today’s supply chains due to outdated paper processes and disjointed data systems that slow down communication. The lack of data compatibility exposes supply chains to problems like visibility gaps, inaccurate supply and demand predictions, manual errors, counterfeiting, and compliance violations,” notes an AWS report. However, with blockchain, procurement and supply chain management organisations can “document production updates to a single shared ledger, which provides complete data visibility and a single source of truth. Because transactions are always time-stamped and up to date, companies can query a product’s status and location at any point in time. This helps to combat issues like counterfeit goods, compliance violations, delays, and waste.”
Global network
If the documentation of, say, a shipment of EV batteries, can trace a direct line from a lithium mine in Australia to a factory in China through a global network of suppliers, all the way to their arrival at a factory in Ohio, the procurement department sourcing those batteries can scrutinise every piece of the value chain much more effectively for quality control, potential counterfeiting, and ESG compliance.
It’s not as flashy as Dogecoin, but it’s actually useful, especially as corporations make efforts to divest major polluters or other parties with poor ESG practices from their supply chains in an effort to reduce Scope 3 emissions and stop propping up reprehensible practices like modern slavery and deforestation.
Next generation AI tools can offer unparalleled visibility into the sustainability of organisations’ supply chains.
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There are increasing pressures on procurement departments to be a driving force in their organisations’ sustainable goals.
The process of buying, shipping, and generally moving physical products about is one of the larger sources of carbon emissions for the modern enterprise.
For consumer companies, supply chain operations typically account for more than 80% of greenhouse gas emissions, creating “far greater social and environmental costs than its own operations”, according to a study by McKinsey. The environmental impact of a company’s operations, and their extent into Tier 2 and Tier 3 emissions, is also becoming a more prominent part of the conversation, making the decision of who to partner with and for what more pertinent to an enterprise’s sustainability goals than ever before—especially as T2 and T3 emissions become the target of new ESG regulation.
The path to sustainable practice is increased visibility into procurement practices, supply chain impact, and the supply chains of ecosystem partners. Increasingly, procurement teams are artificial intelligence (AI) for these insights.
Responsibly sourced startups
The demand for AI-powered sustainability in the procurement sector is already driving investment in promising new tools. The Copenhagen-based startup Responsibly was founded in 2021, and in October 2023 managed to leverage its work on AI-driven sustainable procurement tools into a $2.4 million funding round, aiming to further develop its project of “democratising access to sustainable procurement”.
The company combines an AI model with large data sets to allow users to analyse their suppliers and potentially take action to restructure their procurement practices. The data analysed relates to suppliers’ carbon emissions and links to deforestation, but also their gender pay gap, human rights records, and more. The company has already accumulated several high profile clients, including the CERN research facility.
Data-driven, sustainable decision making
The success (and sustainability) of a supply chain is, first and foremost, an issue of visibility. Decision-making to reduce carbon emissions, cut costs, and improve resilience is almost universally a matter of understanding the factors affecting what has traditionally been a very murky, complex, impenetrable system. Using AI to maintain visibility into upstream manufacturing, purchasing, and logistics channels is critical in a world where supply chains are more complex, and the critical eyes of regulators and other organisations within a company’s ecosystem are more prone to scrutiny, than ever before.
For any organisation looking to operate more sustainably—especially in a climate of net zero commitments and increased regulatory scrutiny—the next generation of AI models, powered by advanced analytics, intelligent algorithms, natural language processing, and real-time processing of huge data sets, represents a way to understand the source to pay process on a more granular level than was previously possible, and a path to making the necessary decisions for a more sustainable supply chain.
In a press release on Tuesday (January 9th), Sphera, which is a leading global provider of ESG performance and risk management software, revealed it has purchased the supply chain sustainability software firm.
Supply chain network
Founded in 2012 and headquartered in Santa Cruz, California, SupplyShift has built a supply chain network of over 100,000 suppliers, where buyers and suppliers engage and share information quickly in order to manage risk and facilitate supplier regulatory compliance.
The solution provides supply chain transparency and supplier mapping at any tier as well as data analytics, supplier scoring and traceability.
SupplyShift has customers and business partners globally, and the company’s portal is used by a variety of customers across industries, from worldwide retailers to Fortune 500 brands.
Growth journey
Paul Marushka, CEO and president, Sphera, said: “SupplyShift has seen tremendous growth with its software solution that allows for direct communication with suppliers and customers and enables the seamless collection of their Scope 3 emissions data, which helps suppliers improve their supply chain ESG performance.
“As more regulations are passed that demand transparency, the SupplyShift solution will become indispensable in meeting global regulatory requirements and stakeholder expectations. Bringing SupplyShift’s portal into the Sphera family will expand our current offerings and enable us to provide unparalleled Scope 3 and ESG tracking and reporting capabilities. We are pleased to welcome SupplyShift’s customers, colleagues and solution to Sphera and look forward to helping our combined customer base accurately track and report their Scope 3 emissions and be compliant.”
Alex Gershenson, SupplyShift’s CEO and founder, added: “SupplyShift was founded on the idea of leveraging software to drive sustainability initiatives, and for 11 years we have been empowering companies to understand their supply chain ESG risk and performance.
“We are excited to join the Sphera family and take data availability to a new level through the combination of Sphera’s industry-leading ESG data and SupplyShift’s Scope 3 data collection abilities. Through SpheraCloud, Sphera’s SaaS platform, and its LCA solutions, we can help even more customers track their Scope 3 emissions and manage their supply chain sustainability.”
Procurement teams are under mounting pressure to minimise disruption and contribute value to the business. Here’s how Generative AI could help.
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Across all industries, the unprecedented disruption caused by the COVID-19 pandemic, along with the “growing need for procurement to enable growth, mitigate inflation/risk, and drive significant levels of value” has, according to Deloitte’s 2023 Global CPO Survey, afforded businesses’ procurement function “a seat at the table.” However, with the recognition of procurement’s importance comes responsibility and, increasingly, pressure.
The procurement function of a modern enterprise is one of the final remaining frontiers where truly value additive transformations can occur. Cutting costs, identifying new efficiencies, and pursuing more sustainable practice throughout the supply chain are non-negotiable KPIs for all procurement teams.
Artificial intelligence (AI) and machine learning (ML) have long been a part of successful procurement and logistics strategies—automating manual and menial tasks, freeing up professionals to focus on more strategic objectives. The recent advent of generative AI, underpinned by natural language processing (NLP), pattern recognition, cognitive analytics, and large language models (LLMs), however, has the potential to support procurement professionals in new, more impactful ways than ever.
Here are our top X ways that generative AI can help procurement professionals deliver on the demand for smarter buying, more ethical sourcing, and the holy grail of an unshakably resilient supply chain.
1. Predicting Disruption
If the last three years have taught us anything, it’s that the supply chain is a fragile thing. Organisations struck by the pandemic that failed to adapt and recover as fast as their competitors are, at the very least, facing a harsher world today than they were in 2019, with many having been absorbed by more resilient, faster-moving competitors. Even with the pandemic behind us, its effects are still being felt, and disruptions are a fact of life.
In case of a disruption, procurement teams need to be able to identify and respond quickly—something only 25% of firms are able to do, according to Deloittle’s 2023 procurement industry survey.
AI tools bring a heightened ability to identify patterns and analyse large data sets to the procurement department, dramatically increasing procurement professionals’ ability to identify disruptions (both within the organisation and in the market as a whole) before they happen and adapt accordingly.
2. Textual Data Analysis
Artificial intelligence has been used to sift through large data sets for years, but Generative AI may allow the scope of those data sets to expand by orders of magnitude. The ability for ML-powered LLMs to analyse large amounts of unstructured textual data, such as news articles, social media posts, contracts, and customer feedback could create a wealth of new insight and recommendation generation opportunities to benefit businesses’ procurement functions.
Procurement professionals will have an additional angle from which to evaluate vendors, examine their compliance status, gather market intelligence, and assess risk. Unstructured text remains one of the great untapped data resources, and LLMs have the ability to convert that raw data into actionable insights for the procurement function.
3. Intelligent Recommendations
In addition to internal purchasing recommendations based on compliance, generative AI could also be used to create highly personalised, granular criteria for business buyers. An AI-powered buying tool could, for example, scrape hundreds of thousands of item listings, eliminating results based on millions of data points, to create proposed shopping carts for particular applications weighted by any number of criteria determined both by company policy and the buyer’s own preferences.
4. Automated Compliance
Generative AI’s ability to analyse large, unstructured data sets and draw complex, human-like conclusions from them that are then translated into insights and decision recommendations could be transformative for handling compliance in procurement.
A generative AI model could be used to monitor company-wide activity for anomalous or non-compliant purchasing behaviour—alerting the procurement department if an issue arises. In addition to creating more freedom for buyers outside the procurement function, and freeing up time within procurement that would otherwise be spent reviewing company spend for compliance, a Generative AI could be used to make intelligent spending recommendations in order to increase compliance with minimum spend contracts, for example.
At DPW Amsterdam 2023, we chat with procurement leaders to find out why the conference is regarded as one of the most influential tech events in procurement today…
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Koray Köse, Chief Industry Officer, Everstream Analytics
“When you go to events that are this disruptive that are actually giving you an environment like a concert where people have a very positive vibe, that’s when the best experiences are shared and people open up. If you listen, you now understand what the real challenges are. If you’re at a conference that is very formal, then you get a very different feeling. It is the casualness of DPW that helps the authenticity of every company and its challenges.
“It’s a unique environment where you get very authentic, bold, blunt, but truthful statements of perception of actuals, desires, future vision, and also conversations about how can we as a community do things differently? How can we as potential future partners do things differently? And how can tech concatenate value and how can we actually now do that in a partnership with companies that we don’t even consider clients at this point? They’re not clients, but they share exactly what they want and those are benefits.
“I think it’s almost like an incubator environment because a lot of ideas are formed here. Lots of connections are made and a lot of deals for vendors are done too. You look at the floor and there are about 120 vendors all here for the same reason, it’s amazing. To get that concentrated over 48 hours, a lot of people will walk away and need to process what happened and the conversations they had. Then we look forward to next year.”
Koray Köse, Chief Industry Officer, Everstream Analytics
Ashwin Kumar, Vice President, GEP
“DPW has given me some insight into what kind of options there are. Sometimes I go through the booths and I see two solutions and question how they’re different. At first, I think they’re doing the same thing. And then once they start explaining, you find out the nuance. Now I understand this may not be applicable for this client of mine that I’m working with maybe this is for a company that’s growing at 30%, not for someone who is already there and growing at 2% or 3%.
“I think that way DPW has helped me understand how do you stitch different things together and then take it to a client and say, ‘this is the ecosystem you need at this point in time. It could change in six months, or three months, we don’t know. Go with it for now and you don’t have to worry about being married to that solution for too long.’”
Ashwin Kumar, Vice President, GEP
Kathryn Thompson, Partner, Deloitte
“I think DPW shows us the art of the possible in digital procurement. It shows us if you were unconstrained and you could do anything, what would you choose and build? You don’t have that in some of the other tech conferences that are a bit tied into an infrastructure they need to build. I love this what if idea we have here. I think it’s fabulous we have this confluence of organisations that need these tools, all the different startups and solutions to bounce ideas off and work out the future. DPW has real energy and passion like no other. You must get your message across in three minutes or it’s gone, that passion is brilliant because there’s nothing similar.”
Kathryn Thompson, Partner, Deloitte
Scott Mars, Global Vice President of Sales, Pactum
“This to me, especially for Europe, is the premier procurement technology event. All the main vendors, our competition as well as our peers are here. There’s many CPOs in attendance alongside procurement and digital transformation leaders so for us as a vendor, it really is a great audience. We love having the ability to network with our peers or other vendors, potential partners and these procurement leaders and visionaries so it’s definitely a great opportunity to do that. It is certainly one of the best procurement events I’ve ever been to. They do a great job here at DPW.”
Scott Mars, Global Vice President of Sales, Pactum
Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee
“Whenever I go to conferences, I get to see the latest technology exhibited. I can have conversations with many people in a very short period of time. Number two, for me as a CPO, I come here as well to meet my peers and have good conversations. Amsterdam is always a good place to come and maybe combine business with pleasure.”
Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee
Gregor Stühler, CEO, Scoutbee
“Procurement people are incredibly busy and getting a hold of them is quite difficult. Having them all in one spot is super helpful. One key challenge for procurement software providers is that the buying centre is not the same. If you sell sales software or whatsoever, it’s usually the same buying centre. You approach the Chief Revenue Officer or something like that. In procurement, it’s not always the CPO that decides on the tech. But DPW is filtering out and attracting the talent that is making those tech decisions and it’s extremely valuable for the startups and for the tech companies as well.”
Gregor Stühler, CEO, Scoutbee
Alan Holland, CEO, Keelvar
“This event has actually been a catalyst for some of the transformation we’re seeing in procurement. Matthias and his team have grown together best-of-breed vendors and they realised early on that change is afoot and legacy systems are going to become part of the history of the space. He embraced these vendors which are coming up with exciting new developments and provided us with a venue to put our best foot forward and present ourselves to other large enterprises with an appetite for understanding what innovation was required. We’re very grateful to Matthias, we’ve worked with him from day one and we think he’s done fantastic work here.”
Alan Holland, CEO, Keelvar
Prerna Dhawan, Digital Lead, Procurement, The Smart Cube
“I think DPW raises the profile of procurement. DPW has elevated the function because procurement is no longer seen as the industry that thinks of digital at the end. It’s not a laggard anymore. I attended the first DPW event pre-Covid and thought it was brilliant then but it’s got bigger and better since. We talk about this in procurement, you get innovation from your suppliers but if you think about innovation when it comes to technology you have to be open to talk to vendors and that doesn’t happen in other conferences the way it does here. I think DPW has created that platform for learning from each other to happen.”
Prerna Dhawan, Digital Lead, Procurement, The Smart Cube
CPOstrategy explores this issue’s big question and uncovers what the impact of gen AI is in procurement.
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The true possibilities of what can be achieved via AI is still being unearthed.
Indeed, the influence of new technology will only grow from here and new digital tools are being introduced all the time.
When it comes to generative AI, there is perhaps a misunderstanding that it is a new innovation. But the history of gen AI actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. It worked by recognising keywords in a user’s statement and then answering back through simple phrases or questions, in likeness to a conversation a human would have with a therapist. While ELIZA was seen as a parody and largely non-intelligent, its introduction has paved the way for later advancements in Natural Language Processing (NLP) and the future of generative AI.
Fast forward to today and the gen AI conversation and wider tech landscape looks very different. In late 2022, OpenAI launched ChatGPT – technology which has shaken the procurement function and beyond. ChatGPT interacts in a conversational way with its dialogue format making it possible for users to answer follow-up questions, admit mistakes, challenge incorrect answers and reject unsuitable requests. As such, the chatbot has created quite a buzz which has been felt across the globe.
Generative AI’s misconception
Speaking to us exclusively at DPW Amsterdam, Gregor Stühler, CEO at Scoutbee, believes there are some misconceptions around ChatGPT and the nature of how accurate the data it provides actually is. As is the case with any new technology, these things take time. “It’s always the same. It happened with electric cars, nobody thought that would solve the battery issue,” he discusses. “I think we are right at the peak of the hype cycle when it comes to those things and people have figured out what they can use it for. With wave one of gen AI, it is fine to have hallucinations of the model and if something is spat out that is not supported by the input.
Gregor Stühler, CEO at Scoutbee
“But by the second use case, hallucinations are not okay anymore because it’s working with accurate data and should not come up with some imaginary creative answers. It should be always supported by the data that is put in. This is very important that people understand that if you train the model and if you have the right setting, those hallucinations will go away and you can actually have a setting where the output of the model is 100% accurate.”
Data security
Michael van Keulen, Chief Procurement Officer at Coupa, agrees with Stühler and despite obvious benefits such as time and cost, he stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”
Michael van Keulen, Chief Procurement Officer at Coupa
Managing data leakage
Danny Thompson, Chief Product Officer at apexanalytix, explains that one of the biggest challenges with generative AI is being aware of a leakage of sensitive information combined with a contamination of important data. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 500 companies and that is the best information we’ve been able to accumulate about the suppliers and their relationships as a supplier to large companies,” he tells us.
Danny Thompson, Chief Product Officer at apexanalytix
“We want to make sure we’re not loading sensitive information into a generative AI function that might allow just random people to access that data. Ultimately the customers in the space that we’re operating in are serious companies moving around large amounts of money and facing real risks that they have to manage. It’s really important that the data that they have is either highly accurate or at least they understand the degree to which it’s accurate. This means if you’re using the solution that you don’t understand the level of trust you can have in it, then you shouldn’t be using it yet.”
Can generative AI bridge the talent shortage?
Amid talent shortages in procurement, there are some sections of the procurement space questioning to whether AI and machine learning can plug the gap and reduce the necessity of recruitment. Naturally, this raises the debate of whether robots will replace humans. Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni, adds that while AI and machines won’t replace humans, it will mean people will need to find new forms of work and take on higher-value roles.
Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni
“The shape and structure of the modern procurement function will change quite dramatically and people will need to upskill,” he discusses. “A lot of the work will be taken over by the machine eventually either 20%, 50%, and then a hundred percent. But the human needs to have that in mind and then plan for that next three to five years. The procurement function of the future will be smaller, and they should purposely be doing that, to then look at solutions to find a way to enable it to happen naturally.
Future proof procurement
“For someone who’s joining procurement now, you’ve got this great opportunity to embrace digital. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset as opposed to fighting being replaced by a machine. I think for graduates coming into procurement, they’ve got the opportunity to play with digital and actually change the status quo.”
As we look to the future, gen AI and new forms of technology will continue to change the world and the way we work. In the short term, work is expected to continue to upgrade the user experience and workflows through gen AI in order to build greater trust for the end user. As transformation continues to happen, businesses and wider society must embrace new types of AI to thrive and stay ahead of the latest trends. The potential that gen AI tools possess is expected transform the workplace of tomorrow while delivering value-add such as time and cost savings on a day-to-day basis.
Given the speed of evolution and development, it is yet unimaginable exactly what form the digital landscape will take in years to come. However, that horizon brings with it fresh opportunity and excitement revolving around a whole new world of technology at our fingertips. The future is digital.
RPA promises increased efficiency, lower costs, and an end to staffing issues, but can procurement teams implement successfully?
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Though it’s less frequently associated with automation than its more robot-friendly cousin logistics, procurement is a discipline that’s undergoing a radical transformation.
“Your new procurement employee will work 24/7, never call in sick, rarely make mistakes,won’t complain, and never ask for a raise. Of course, this is not your typical worker, but a procurement software robot—or bot.”
Although it reads like the opening paragraph of an abandoned Nanowrimo project started by someone who’d just finished I, Robot, I assure you this report released in 2020 by consultancy KPMG is an entirely serious endeavour. Although the global clamour to replace employees with robots may have died down a little now that a few million professionals have been dragged kicking and screaming back to the office, the benefits that automating elements of the procurement function could deliver are hard to deny.
RPA is big business and isn’t going anywhere. In 2022, the global robotic process automation market was estimated at $2.3 billion. It’s expected to grow at a CAGR of 39.9% between this year and the end of the decade.
From multinational corporations to the US Department of Homeland Security, robotic process automation (RPA) is emerging as a popular way to manage complexity within a large supply chain, automate repetitive tasks, and enhance the capabilities of a procurement department. The US DHS’ procurement department, for example, spent just under $24 billion across about 60,000 transactions in 2022, and is increasingly handing the responsibility for contractor responsibility determinations, as well as automating tasks for the Customs and Border Protection—allegedly cutting jobs that took an hour down to just a few minutes.
As KPMG’s report stresses, “leveraging procurement bots is the next logical step as organisations look to benefit from advancements in digital capabilities.”
RPA adoption in procurement—the Benefits
Added visibility
Improved efficiency
Reduced costs
Large amounts of traditional procurement processes involve repetitive tasks like requisitioning, purchase order management, checking compliance, andanalysing spend, supplier onboarding, and more can be automated using an RPA bot. This is not only because RPA is getting smarter, but also because businesses’ procurement functions tend to be more consolidated within a single platform that is more closely integrated with the business in a modern enterprise. In a sufficiently digitalised system, there’s little to stop RPA from creating efficiencies by eliminating menial tasks.
Likewise, by integrating RPA into a company’s enterprise resource management (ERP) platform, it gains access to vast amounts of data that can then be tracked, analysed, and used to draw insights faster than a human could hope to tackle the same task. Most modern supply chains comprise several different pieces of specialised software, and making each one talk to one another smoothly can create serious pain points for procurement teams, but RPA can do a great deal to smoothe over the cracks.
RPA Risks and How to Overcome them
Data exposure
Lack of oversight
Misguided direction and overspend
As mentioned above, RPA works best when fully integrated into as much of your system as possible, with access to as much data as you can feed it—especially with modern RPA using AI to make more and more intelligent decisions based on raw and unstructured data sets. Obviously, this creates a potentially huge, glowing weak point in your company’s cyber security framework. Because RPA bots replace human workers, they need access to the privileged information that humans have, and those bots are just as—if not more—vulnerable to attack.
RPA bots can automate a great deal of tasks, but it’s easy to lose track of the fact that they’re just bots and, without proper oversight and direction, they could create inefficiencies, security flaws, and breach compliance—all costly problems, especially if the typically costly technology fails to address the original inefficiencies or issues it was bought to resolve.
Automating procurement processes could undeniably lead to increased efficiency, lower costs, and a more resilient procurement function, but only if implemented with intentionality, and given proper oversight once up and running.
Wary of overdependence on overseas suppliers, the South Korean government is investing heavily in increasing the resilience of its public procurement process.
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The South Korean government announced last month plans to establish a commission to oversee and coordinate plans to make the country’s procurement process more resilient. This announcement comes on the back of concerns over the vulnerability of South Korea’s “critical industrial” supply chains.
A state-backed fund expected to exceed 5 trillion won ($3.79 billion) is being set up to “secure stockpiles of critical supplies and support investment in relevant businesses and facilities”, with a long-term goal of divesting Korean industries from overdependence on procuring materials from single country suppliers.
Specifically, urea (like ammonium phosphate used in fertiliser manufacturing) and graphite (used in the production of batteries for electric vehicles) are both considered critical materials for Korean industrial activities, and supplies of both originate almost exclusively from China.
An Editorial published in the Korea Times noted that a recent export restriction of urea product shipments from China has caused a spree of panic buying. “What matters is that China accounts for 95 percent of Korea’s ammonium phosphate imports. Desperate to cope with a growing sense of crisis especially among farmers and relevant industries, the [Korean] government came up with a package of measures designed to secure key materials on a stable basis.”
The government will procure a reserve of 12,000 tonnes of urea in order to create a 130 day buffer to safeguard against future disruptions.
The way ahead
At a meeting of the new commission on Monday, Korean Finance Minister Choo Kyung-ho commented that “Recently, supply chain risk factors for items directly related to core industries and people’s livelihoods—such as urea, diammonium phosphate and graphite—are increasing,” suggesting that devising a national procurement strategy less reliant on Chinese exports would be essential, given the fraught economic and political histories between the countries.
Moving forward, the commission said it would designate materials and items for intensive monitoring, selected from among 200 options identified as being of critical importance and potentially vulnerable to supply chain disruption by a government study conducted in 2021. Magnesium, tungsten, neodymium and lithium hydroxide were included in the previous listing. In addition to urea products, the Korean government is expected to increase its stocks of graphite, 90% of which comes from China.
Protect your procurement function in the year ahead by avoiding the biggest risks on the industry’s radar.
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The last few years have seen unparalleled disruption to the source-to-pay process, from resource shortages and pricing hikes, to new regulatory restrictions and changes in consumer tastes. In the Amazon Business 2024 State of Procurement report released in November, researchers point out that “Many of the top risks … have the potential to disrupt procurement operations with little warning, underscoring the need for preparedness.”
1. Rising Costs and Inflation
The past year has been defined by runaway inflation in the US and beyond, and while it has translated into record corporate profits (researchers estimate now that corporate profits are responsible for around 60% of inflation, following a Kansas City study in 2021) it has been biting from the supplier side as well, with the price of everything from materials to labour rising over the last 18 months. Procurement teams should analyse their budgets and plan accordingly, in order to ensure they can secure the goods and services the business needs without compromising cost containment.
2. Supply Chain Volatility
War, genocide, unrest, and other sources of market volatility can smash a supply chain overnight. The procurement process works best when things are reliable, consistent, and predictable. The very best procurement teams know that this is a fantasy, and that geopolitical, economic, and environmental changes can all contribute to risk that needs to be met with agility and resilience.
3. (Failed) Technology Disruption
From self-driving cars to the metaverse, the last few years are littered with more examples of technological megatrends that failed to disrupt anything or really even materialise than a Phoenix, Arizona parking lot is littered with Waymo crash test dummies. Failing to adopt new and disruptive technology is a risk to your business, but overspending on hype is a much easier trap in which to stumble.
4. Cybersecurity
Data remains one of the most precious resources on the planet, and with the rise of generative AI sparking fresh debate over intellectual property and privacy, organisations will need to be more mindful of their data than ever before. This isn’t unique to procurement, but it remains a function of the business that has a lot of contact with the outside world, especially third party organisations soliciting contracts. Procurement staff should receive regular cyber security training and departments should conduct regular risk assessments in order to avoid presenting an easy target.
5. Increased Regulatory Pressure
Despite the lacklustre Cop28, record profits for the oil and gas industries, and all signs pointing towards a failure to prevent an era of “global boiling”, regulations got a little bit stricter for corporations in the last few years. Compliance will become an increasingly challenging target for corporations to hit as the decade continues. Procurement teams—as functions with some of the biggest sway over scope 3 emissions—will play a large role in keeping their organisations on the right side of the regulations, and could even be a big part of meaningful sustainability-focused change.
6. The Skill Shortage
As procurement becomes a bigger driver of innovation and profit margins for organisations, the gaps between existing skills and future requirements are showing wider and wider. Five out of six procurement leaders don’t believe they have the talent on tap to meet the challenges of the near future, and the increasingly digital-first, strategic nature of the role threatens to place demands on existing functions that they never expected to face.
Procurement leaders who recruit, develop, and retain skilled professionals will have a profound leg up over the competition in 2024 and beyond.
Procurement has the potential—and the responsibility—to go beyond switching out plastic straws for paper in the quest for Net Zero.
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Across the public sector—and increasingly in the private sphere as well—organisations are committing to the necessity of a net zero future. While emissions reduction efforts often begin with scope 1 and scope 2 emissions, analysis of holistic environmental impacts in supply chains often expose scope 3 emissions as being the source of as much as 90% of an organisation’s greenhouse gas emissions.
With the majority of an organisation’s carbon impact originating outside the organisation itself, it increasingly falls to the procurement function to make intelligent, sustainability-motivated decisions in order to draw down indirect emissions and foster a culture of sustainability within their supplier ecosystem.
However, while investment in increasingly sustainable source-to-pay processes is rising, many procurement teams describe the pursuit of net zero as a serious challenge. In Europe, companies earmarked an average of 27% of their total investment budget into improving sustainability this year, a 16% rise in sustainability investment.
Nevertheless, more than 43% of companies surveyed in a recent report had not set a net zero goal, and, within the 32% of organisations with a net zero target of 2030, many procurement professionals reported that “limited data, complex supply chains, and limited control over supplier emissions” presented serious obstacles.
The report notes that, while “procurement organisations firmly have net zero on their agenda,”, other factors like the need to keep costs low are impeding their efforts. Another report by the World Economic Forum—this time focusing on public institutions as drivers of sustainable procurement—also acknowledges the trepidation with which public and private sector organisations view the possible costs of pushing for net zero.
However, the WEF notes that “Pursuing net-zero goals in public procurement will boost the green economy,” estimating that “the private investment and new jobs triggered by greener public procurement, in aggregate, will boost global GDP by around $6 trillion through 2050 – a significant proportion of the green economy’s total GDP of $70 trillion.”
While the short term might represent an increase in costs, the long term benefits for organisations that manage to drive a successful net zero green transition, both in their own organisations, and supply chains, will be substantial. Adopting procurement practices that require green certifications from suppliers (even subsidising green activities within their ecosystems by paying higher prices for suppliers who can demonstrate their green credentials) can drive meaningful reductions in the scope 3 emissions for organisations throughout both the public and private sectors.
Just how much of the procurement process can be automated, and who does it help?
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It’s hard to argue that 2023 will be remembered as the year that generative AI exploded into the public consciousness. Image and text generation in the form of ChatGPT and Midjourney ignited excitement, controversy, contempt, and a fervour to adopt in equal measure. The generative AI industry is predicted to be worth more than $660 billion per year by the end of the decade.
But while there’s no denying that generative AI will be a part of the economic landscape of 2024 and beyond, it’s not yet clear what that will look like. More importantly, it’s no guarantee that generative AI will, uh, generate any ways for the technology to make back the hundreds of billions already spent to develop it.
It wouldn’t be the first major trend to be backed to the hilt by big tech firms, only to dissolve into nothingness like that racoon who drops his cotton candy in a puddle. In stark contrast to 2022, this year’s tech roundups and trend predictions have put a conspicuous lack of emphasis on the metaverse. Now, to be clear, the fact that Yahoo Finance calculated that “Mark Zuckerberg’s $46.5 billion loss on the metaverse is so huge it would be a Fortune 100 company” is great news for those of us who didn’t want to spend our thirties attending meetings in a glowing virtual mallscape surrounded by cutesy, animated versions of our bosses and coworkers. Huge relief. It’s also quite funny. More relevantly to the topic of generative AI is the cautionary tale that, unless big, expensive technological developments can be monetised, they will disappear.
So, how do we monetise generative AI?
How to make generative AI useful
Technology is most valuable when it solves problems, and saves time and money, or at least improves people’s quality of life—when there’s a measurable benefit of some kind, sometimes to humanity, and usually to shareholders. That’s the stuff that sticks around.
While its applications and capabilities—especially when it comes to creative tasks or just the ability to make something actually original—are limited, generative AI may actually be a good fit for the procurement sector, potentially solving a major issue the industry is currently experiencing.
Generative AI and the Procurement Skill Shortage
The procurement sector is short on talent—with five out of six procurement leaders claiming they will lack skills, staff, and other vital human resources in the near future. This is the case for several reasons, but primarily: an ageing workforce is starting to retire faster than new hires can skill up; also, the requirements of the job are becoming more technology centric as procurement digitally transforms, leaving departments underskilled even if they’re no understaffed; and lastly, the amount of work for procurement functions is increasing overall, as it becomes more of a driver of business efficiency and innovation.
If generative AI could be used to reduce procurement teams’ workload by automating certain aspects of the job, it could be a key piece of the puzzle when it comes to solving the skill shortage.
Retail giant Walmart has been successfully running pilot projects using its AI-powered Pactum solution to automate supplier negotiations. According to Deloitte, not only did Walmart find it “helpful for landing a good bargain, three out of four suppliers prefer negotiating with AI over a human. This strongly indicates that the ecosystem is ready to embrace this disruption.” While I’m not sure if this example is an endorsement of AI or an indictment of Walmart’s procurement team, the ability for generative AI to take over routine communication, negotiation, and other interactions in the source-to-pay process could free up huge amounts of time to focus on more strategic activities.
Gen AI’s future
It’s not hard to imagine that both buyers and suppliers could input their desired results and parameters into a generative AI negotiator and outsource the relationship management entirely. Out of curiosity, this morning I set up ChatGPT in two windows and had it conduct an RFP, tender negotiation, and sale agreement for the sale of an order of self-sealing stem bolts between O’Brien Enterprises and Quarks. It was a very civil, if slightly roundabout affair, and everyone seemed to come away happy—hacky business journalists especially.
Goofy demonstrations aside, there’s real potential for significant elements of routine communication and relationship management in the procurement process to be automated, or at least assisted by generative AI. If correctly combined with data analytics on contextual information ranging from weather patterns, commodities pricing, and supplier behavioural history, a generative AI could offer useful insights to procurement professionals while its generally low threshold for usability allows less tech-savvy procurement professionals to harness more powerful digital tools.
Walmart turns to Indian suppliers to meet procurement needs, aiming to buy $10 billion worth of goods per year by 2027.
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US retail giant Walmart is shifting its procurement strategy in response to a sea change in fast moving consumer goods (FMCG) manufacturing from the Global South.
Broadly speaking, Walmart’s strategy is to accelerate its procurement of goods from “categories where India has expertise.” These include food, consumables, health and wellness, general merchandise, apparel, homewares and toys. Additionally, Walmart spokespeople have noted that India—which is home to the third largest pool of scientists and technicians in the world—“has some of the brightest minds in innovation, and we want to explore potential solutions to challenges in our value chain with these innovators and startups.”
Andrea Albright, Executive Vice President of Sourcing at Walmart commented: “India is well-positioned to support increased demand for products by Walmart customers, and we are excited about our partnership with Hero Ecotech. This collaboration furthers our work to strengthen resiliency in our global supply while contributing to economic growth worldwide.”
Accelerated growth
India’s manufacturing sector is booming. Led by the automotive, electronics, and textiles sectors, Indian manufacturing is projected to reach $1 trillion in the next three years, according to a report by Colliers. A surge of investment—both domestic and international—is driving this growth, with the state of Gujarat receiving the lion’s share of the growth as the region is “becoming India’s manufacturing powerhouse.”
In order to support the development of its procurement network among Indian suppliers, Walmart has also announced plans for an invite-only event to be held in New Delhi this February, where “Indian export-ready suppliers are invited to apply to pitch their products to our buyers for Walmart U.S. stores and Sam’s Clubs,” and “Innovative Indian companies are invited to pitch solutions addressing sourcing challenges across apparel, general merchandise, fresh and packaged food, health and wellness, and consumables. Pitches may lead to pilot projects within Walmart’s value chain.”
Our final cover story for 2023 explores how Deputy CIO May Cheng is accelerating a digital customer and product-centric approach…
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Our final cover story for 2023 explores how Deputy CIO May Cheng is accelerating a digital customer and product-centric approach to IT management for the International Trade Administration (ITA).
Welcome to the latest issueof Interface magazine!
Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.
We connect once more with the tech trailblazers at the International Trade Administration. Deputy CIO May Cheng and her team areaccelerating adoption of ITA’s customer and product-centric approach to IT management. In addition, their focus is on Agile, DevSecOps, Value Proposition, and Human Centred Design. “In 2023, we launched 13 products, three MVPs and saw enhancements operationalised. Moreover, the digital model has enabled a partnership between business and IT. The result is clearer lines of shared responsibility, transparency in resources, and a continuous learning culture across the agency.”
Businessman touching data analytics process system with KPI financial charts, dashboard of stock and marketing on virtual interface. With American flag in background.
Royal Papworth Hospital NHS Trust: Digitally transforming patient care
The Royal Papworth Hospital NHS Foundation Trustis centred on bringing tomorrow’s treatments to today’s patients with a clear mission to provide excellent, specialist care to patients suffering from heart and lung disease. We hear from Andrew Raynes who took up his role as CIO in 2017. He is overseeing a digital transformation program bringing value to staff and patients. “Using the global language of interoperability… we’ll see greater efficiency in terms of use of technology and sweating our assets. Furthermore, exploiting the benefits to support seamless care by allowing standards to do the heavy lifting.”
Toronto Community Housing: Supporting tenants with tech
Toronto Community Housing houses tenants in 106 of Toronto’s 158 neighbourhoods. It ensures over 43,000 low and moderate-income families are supported in their continuously managed homes. Luisa Andrews, VP Information Technology Services tells us it’s the best role she’s had in her career. “It’s the most challenging, and where I’ve seen the most progress in a short amount of time. I’m proud of my team and what we’ve accomplished in five years. We, and our partners, have enabled the corporation, through technology, to do what it needs to do for our tenants.”
Marshfield Clinic Health System:
Marshfield Clinic Health System provides care at over 50 locations across the US state of Wisconsin. Chief Data & Analytics Officer Mitchell Kwiatkowski explains its tech mantra to us: “We’re trying to toe that line while examining new technologies as they come out. We’re aiming to understand what they are, how they can help, and implementing things that are mature enough and show promise. I don’t think healthcare is necessarily risk-averse; it’s a highly regulated area that doesn’t always have deep pockets for investment. However, it’s people’s health at stake, so we have to be careful…”
Also in this issue, we get the lowdown on the tech trends for 2024 from Hitachi Vantara innovation guru Bjorn Andersson. We also hear from the WatchGuard Threat Lab research team with their cybersecurity predictions for the year ahead.
A consortium of volunteers from California have slowly restructured their state schools’ digital procurement process. Next year, it plans to go national.
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Procuring digital goods and services for public schools in the US has reportedly been a fraught process for decades. A fractured landscape between underfunded public institutions and a private tech sector has struggled to even accurately assess students and regulators’ needs, let alone finding the right edtech (education technology) to meet those needs.
This is all made harder by an increase in the amount of technology being integrated into schools—whether that’s good, bad, or maybe both, it’s undeniably expensive. The global education technology market was valued at $123.40 billion in 2022 by Grand View Research. It’s expected to expand at a rate of 13.6% between now and the end of the decade.
The power of education for procurement
Edtech is also a wide umbrella, with examples ranging from apps, overhead projectors, and chromebooks for students to thousands of screens, digital signage, and “content management platforms” like those found in Christopher Columbus High, an all-boys prep in Miami which the South Korean tech giant Samsung has transformed into a “connected campus”. In the US, procurement functions working for individual school districts are often forced to work with smaller budgets, fractured regulatory landscapes, and to compete with private schools with larger budgets that drive overall prices in the sector up.
The Education Technology Joint Powers Authority (Ed Tech JPA) was formed “out of frustration” with the existing system, or lack thereof, in 2019. The volunteer group, made up of procurement specialists and school purchasing professionals, has spent the past four years streamlining procurement for digital products and services, leveraging the buying power of multiple schools to negotiate prices, buy in bulk and save money.
From a grouping of school districts located in Irvine, San Juan, San Ramon Valley, Fullerton, Clovis, El Dorado County and Capistrano Unified districts, the consortium has grown to include 163 member districts that educate around 2.3 million students. The organisation has been awarded 23 procurement contracts to date, and is growing rapidly in education.
At the California IT in Education (CITE) conference, held in Sacramento during November, JPA President Brianne Ford, predicted that next year would see the program expand beyond California and make group bargaining procurement for edtech a national feature of the US school system.
This presumably goes all the way back to when every company was a sharp rocks and oxen firm. For the modern enterprise, identifying how the technology du jour empowers successful organisations in your industry and harnessing it for your own ends is just as vital to success today as it was for the Egyptians in 3,500 B.C. to figure out as quickly as possible where the Sumerians were getting all those cool, new, super shiny and sharp new rocks.
Nowhere is this more true than in the procurement sector. A place where harnessing Big Data can drive new efficiencies, improve resilience and agility in the face of disruption. This is done all while helping procurement teams understand their business in real-time.
However, this doesn’t mean that Big Data analytics adoption has been simple, easy, or without risk. The disruption caused by the COVID-19 pandemic highlighted most of a company’s value chain is dependent on external third parties. There’s only so much you can get done without engaging with organisations up or down your value stream.
Procurement teams can typically find themselves managing expenses accounting for about 50% of a business’ revenue — sometimes overseeing spend in the billions of dollars. Procurement’s ability to maintain and navigate increasingly complex networks of relationships can be hugely enhanced by the power of analytics. However, adopting the wrong analytics platform, feeding it the wrong information, and drawing the wrong conclusions can be disastrous.
By gathering data from both internal and external sources, then analysing it with the appropriate tools, procurement teams have the capacity to create powerful insights in less time than ever before.
Combining environmental information (weather patterns, crop cycles, raw materials pricings, political unrest, etc.) with rich data generated within a company’s operations, mean that procurement teams using Big Data analytics have a significant leg up when it comes to predicting trends, finding favourable prices for buying, and sourcing inventory from a diverse network of suppliers so as not to place undue stress on their partner network. Reduced costs don’t hurt matters, either.
A closer look at some of the best tools to help your procurement function capture the potential benefits of a world powered by big data.
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Procurement is becoming an increasingly data-driven field. Correctly gathered, organised, and analysed, Big Data sets can help a procurement department do everything from increase efficiency and reduce costs, to make more ESG-conscious decisions or shore up their supply chain against unexpected disruption. However, managing huge amounts of structured, unstructured, internal, and external data can present a significant challenge for procurement staff. This is especially true when procurement professionals haven’t needed to also be data analysts until recently. This means there might be understandable skill gaps in your team.
Luckily, there exists a wealth of digital tools designed to capture, analyse, and generate insights from massive amounts of data. This is all specifically catered towards enhancing and elevating your procurement function. Here’s a closer look at five digital tools to help maximise the potential of Big Data in your procurement function.
1. GEP Smart
With AI-powered spend analysis, as well as strategic sourcing, purchase order processing, and invoice management, GEP Smart is one of the more broadly capable and robust procurement tools on the market. The platform is capable of absorbing, collating, and converting large data sets into everything from compliance procedures to supplier management strategies.
2. Kissflow
For smaller organisations still in the process of growing their procurement teams, Kissflow can help bridge the gap between a legacy or underdeveloped procurement function and where it needs to be with less emphasis on learning complex new digital tools. Kissflow is all about being simple, accessible, and customisable. The platform handles basic procurement functions natively, but integrates with a huge variety of other tools and programs.
3. Coupa
Focused largely on spend management, Coupa unified, streamlines, and empowers the source-to-pay process. The firm uses Big Data analytics to manage working capital and forecast budgets, giving procurement professionals more visibility over finances.
4. Tamr Procurement Analytics
Tamr Procurement Analytics specifically targets the problem of siloed data within the supply chain, helping procurement professionals quickly unify their data sets and start using artificial intelligence to generate insights at speed. The AI and machine learning decision engine underpinning Tamr’s platform enriches user data while also curating it against a rigorous set of standards to ensure quality.
5. TARGIT Decision Suite
TARGIT is a business intelligence and analytics tool that can gather observations from throughout the supply chain. This allows them to be more easily converted into actionable insights. The platform embeds directly into internal and external-facing portals, allowing a procurement team to share dashboards with the entire supply chain network. By creating a holistic impression of the entire supply chain, TARGIT improves the results of its predictive analytics, increasing efficiency and resilience.
At DPW Amsterdam, Kathryn Thompson and Fraser Woodhouse, Partner and Director at Deloitte, discuss the rise of generative AI and the impact on procurement.
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Procurement is changing.
That’s something that isn’t lost on Kathryn Thompson, a Partner at Deloitte.
As part of her role, she leads the Sourcing and Procurement Market Offering within Deloitte’s Consulting division in Europe, Middle East and Africa. Originally from Australia, Thompson has worked in procurement since 1996 and has observed quite the evolution over the past two and a half decades.
Procurement’s transition
Over the years, procurement has shifted from a traditional back-office function to an entity operating at the fore of a company’s strategy. Having been involved in the industry for more than 25 years, Thompson has had a front-row seat to procurement’s digital transformation. While she affirms that AI has changed procurement, she isn’t convinced that generative AI is changing the space – yet.
Kathryn Thompson speaking at DPW Amsterdam 2023
“We see lots of AI tools pulling from different data sources to apply intelligence to different decisions,” she explains. “But the generative part, beyond contract summaries or pulling together draft RFPs, remains to be seen at scale. One of my more sophisticated clients has run 300+ Proof of Concepts in AI across their business, including and beyond procurement, and admits they are yet to scale or drive meaningful ROI from any POC. At the moment, the generative AI side for us, isn’t getting past proof of concept or the pilot stage yet.”
Fraser Woodhouse is a Director at Deloitte and has been with the firm since February 2019. He believes that procurement and sales teams will use gen AI for RFPs over the next six months. “I think they’ll do it without telling anyone,” he explains. “It will eventually get to a point where I think that sort of crutch will become a necessity. When it’s built into the enterprise platforms, people will forget how to write contracts because the AI does it automatically. People will even use it to write their emails.”
The AI dilemma
AI on its own is pointless – it simply doesn’t operate the way you need it to. That’s why the importance of making tech work in a way that creates efficiency has never been more important. For Woodhouse, he insists it’s about putting a human at the right place in the process. “One of the solutions I saw was a gen AI assistant helping write an RFP built in, but then the supplier has a gen AI assistant helping do the response to the RFP as well,” he tells us. “Very quickly you’ve got two AIs negotiating with each other, and that doesn’t work unless a human is curating stuff at that point in the middle.”
Given the ease of AI usage, there is a discussion as to whether tech implementation could go too far the other way. Could humans lose the ability to perform simple tasks they previously wouldn’t have thought twice about? But Woodhouse is quick to dispel that myth and believes that despite the growing reliance on technology, people won’t be rendered useless. “People didn’t forget how to communicate when spellcheck came around, they could communicate better,” he explains. “If you are a supplier and are responding to an RFP and you’re pressing their generative AI button to build the response and five of the other suppliers are doing the same thing, who’s going to stand out? The ones who wrote it themselves or at least edited it and had meaningful input.”
“You can use AI for the transactional, easy stuff but there must be a value underpinning it,” adds Thompson. “The winners are going to be the ones that are human about things.”
Fraser Woodhouse and Kathryn Thompson speaking to CPOstrategy at DPW Amsterdam 2023
Procurement’s place
With such significant innovation happening, it is seen as a transformative time to be in procurement. As automation speeds up, the necessity to upskill new graduates coming into the workforce and encourage them to learn higher-value work earlier in their career journeys is becoming increasingly important.
“Covid and the following work from home attitude has a lot to answer for,” explains Thompson. “Pre-Covid, you would rarely work from home. Consultants, suppliers, delivery partners always went to the client’s site. That’s where innovation, creativity, results that are more than the sum of their parts happen. That’s not replicable by generative AI. We need to get everyone back out there and doing things. Rather than replacing jobs, we’re replacing tasks. The tasks that we’re replacing are the likes of data analysis, synthesising, and summarising. Hopefully, it means we’re doing real-life negotiations, brainstorming and innovation instead which are the things that people love to do. Fingers crossed, it just means the bar goes up.”
Automotive supplier Continental has chosen to work with JAGGAER to implement its global purchasing strategy while driving digitalisation.
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Spend management firm JAGGAER has announced it is working with automotive supplier Continental to push its digitalisation agenda.
In a press release published on Monday (December 11), it was revealed the manufacturer will use JAGGAER’s spend management tools to implement its global purchasing strategy. The JAGGAER ONE suite will counteract previously isolated solutions and harmonise the areas of purchase-to-pay, source-to-contract and business partner management.
A multi-stage rollout is set for launch, beginning in Germany and the United States before being slowly expanded globally.
The release detailed that one of the most important factors for Continental choosing JAGGAER was due to the extensive and highly standardised range of functions of JAGGAER ONE, which already covers many existing requirements. In addition, this not only ensures a quick time-to-value, but also ensures a low implementation risk. Continental confirmed it found JAGGAER’s multi-ERP capability “particularly impressive”, with a total of 30 ERP systems needing to be connected.
Following the project’s launch earlier this year, the implementation of JAGGAER solutions within Continental will take place in several stages. Initially, the company will focus on the procurement of non-production materials and raw materials. It will start with the optimisation of the source-to-source contract process. In the next project phase, Continental will focus on the procure-to-pay process to ensure security of supply for employees globally. This is done via predefined catalogues and to optimise follow-up processes.
As well as the global rollout and digitalisation, there are also plans to expand the use of software to direct purchasing.
At DPW Amsterdam 2023, Prerna Dhawan, Chief Solutions Officer at The Smart Cube (a WNS company), tells us about the importance of remaining focused on fixing the problem and not leveraging technology for technologies sake.
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“You don’t need AI or even gen AI for the sake of it.”
In today’s world, everyone is obsessed with what’s new and fresh. Like in most other functions, in procurement, the latest craze is generative AI, with ChatGPT being one prominent example. Despite new technology’s clear benefits, such as cost and time savings, it’s important to keep the problem you’re trying to solve and the business impact you’re looking to make front of mind.
Prerna Dhawan is the Chief Solutions Officer at The Smart Cube. Like many of her peers, Dhawan recognises the potential that new technology brings but also shares concerns. “Like everyone else, we’ve been on that bandwagon as well,” she tells us. “For us, there have been two key learning so far. We have already done one live deployment of gen AI. We went live with our gen AI model earlier this year, which enables users to skip the stage of manually searching for content on Amplifi PRO, our on-demand procurement intelligence platform. You just ask the question and our platform leverages a custom NLQ framework and gen AI to provide a natural language response. Using a combination of our own AI models and gen AI provides a more dependable, accurate response as pure Gen AI isn’t fully functional for all types of analysis and can’t be trusted completely.”
Navigating AI adoption
Indeed, there has been criticism from some sections about ChatGPT providing hallucinations and making key data up. For multi-million pound organisations responsible for high levels of spend, this isn’t good enough. A second learning Dhawan is keen to get across is that she believes that gen AI is being dominated by hype. She explains that with any “new shiny object”, it should be treated with caution.
“I’ve tried to explain this a little bit, but everyone is excited about new things. A recent example is another use case where we were experimenting with our digital assistant,” she explains. “There was a point where we used a 100% gen AI approach, and we were still getting issues and hallucinations where the queries weren’t being answered correctly. The team said we needed to make it work and I explained that, ultimately, a client needs to solve the problem, they’re less hung up on how this is done. Sometimes people get lost with the technology and the approach. You have to ask yourself, are you solving the problem? If the answer is to just input a human and you don’t need AI, then do that.”
Prerna Dhawan, Chief Solutions Officer at The Smart Cube, sits down with CPOstrategy at DPW Amsterdam 2023
The journey
Armed with more than 16 years of experience in developing client solutions, managing strategic relationships, defining product strategies and driving profitable growth, Dhawan has worked with procurement, supply chain and corporate strategy teams across many global 2000 companies. Throughout her career, she has helped them embed intelligence and analytics as enablers of competitive differentiation and business transformation, along with The Smart Cube’s co-founders Gautam Singh and Omer Abdullah.
The Smart Cube is a WNS company and is considered a trusted partner for high-performing intelligence that answers critical business questions. The Smart Cube works with clients to figure out how to implement answers faster through customer research, advanced analytics and best-of-breed technology. The firm transforms its data into insights – enabling smart decision-making to improve business performance at the top and bottom line. Together with WNS, expert resources are combined with leading digital technologies, merging human intelligence and AI with innovation.
Digitally-enabled future
While AI’s challenges should be acknowledged, Dhawan is in no uncertain terms about the importance of stepping out of comfort zones and meeting fear head-on. Change can be a divisive topic with human nature being to cling on to what’s familiar. However, this can result in becoming reactive and failing to keep up with competitors.
Prerna Dhawan, Chief Solutions Officer, The Smart Cube
“As leaders, if we want to change the game of procurement and redefine the value we create for a business, we have to be more open to embracing new things,” she explains. “If you learn what the capabilities of new technology are and where you can actually use it, everything has strengths and weaknesses. Ask yourself – do you want to be an early adopter or do you want to be a laggard in your industry? All of this has the potential to give you that competitive advantage. It’s about being open, experimenting at pace, but also not being blinded by the magic and assuming everything will just work. There will be changes needed to your processes and people’s mindsets.”
Procurement’s future
With the future of procurement set to continue to be digitally-enabled and full of innovation, Dhawan believes the function now has its seat at the table and is ready to thrive.
“If I look at my journey from when I started in procurement, clients were asking questions like ‘Who are the suppliers in the market? How do I get the best price?’ Procurement is now getting involved at the new product development stage and is even advising the business on what ingredients to use while taking a more total value approach,” she discusses. “When you’re thinking about the product, do you want to put in palm oil or sunflower oil based on sustainability considerations, and how can you justify additional costs of a sustainable supply chain? Procurement isn’t just supporting the bottom line but also influencing the broader business goals of sustainability, innovation and resilience. It’s a great time to be here.”
Anthony Payne, chief marketing officer of HICX, tells us why we won’t reach net zero unless we fix data collection.
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As we approach COP28, large manufacturing brands are in the net zero spotlight. It’s been a year since the UN Expert Group released Integrity Matters, a report clarifying the exact metrics brands must meet if they wish to claim net zero success. Those planning to do so, account for around half of the world’s largest listed companies, according to the latest Stocktake, a number which has doubled in the last two and a half years. Despite this momentum, however, brands are slow to implement.
Now, with the conference marking another year closer to the 2050 Paris Agreement and other deadlines, it’s time to step up delivery. What this means is that the strategies behind net zero pledges need a boost.
As a supplier experience evangelist and a marketer, I view this challenge through a different lens. The way in which we engage suppliers to get their data needs significant improvement. And the way forward is to market to suppliers.
A growing conundrum
Most of today’s major brands have expensive procurement technology with which to engage suppliers, technology that has often evolved to be complex, clunky, and hard to use. As a result, supplier adoption of these tools is low, and therefore supplier engagement in projects to cut carbon and provide quality information is low. Brands have the challenge therefore of getting suppliers to adopt their expensive tech and engage in net zero efforts.
Additionally, we’re seeing that what each party expects from the brand-supplier relationship, is misaligned.
Anthony Payne, chief marketing officer of HICX
Suppliers, at the start of the relationship, are highly incentivised to work with a brand and they want to get to three things: the first purchase order, delivery of that first service or product, and payment. From that point, they just want to continue transacting and renewing business. This is their “steady state.”
A brand’s steady state, on the other hand, is more complex. In addition to transactional work, brands need a continuous flow of information around compliance, quality, performance, tax, carbon footprint and an awful lot more. Nowadays, brands also want to be efficient and automated. This brings new technology, whether it’s extensions to established technology or new specialist tools. Of course, with new tools come new processes.
Suppliers, as we’ve discussed, primarily want to receive orders, deliver on them and be paid. But now, they are also expected to respond to requests for a whole set of information, on a continuous basis. They’re also facing a lot of change in the form of ever-complex technology landscapes and evolving processes – and this isn’t just for one brand, it’s for all their customers and it’s leading to suppliers suffering from what we sometimes call, ‘initiative fatigue.’
The need for brands to collect data is here to stay and it’s time to deal with the thorny issue of how we can get suppliers to adopt the necessary tools and engage in net zero requests.
We need suppliers
Further to this conundrum, brands face something of a basic and rather obvious truth; they need suppliers. For example, brands need suppliers to provide carbon information, ideally using the tech setups that already exist, and they need them to engage in this activity over and above “business as usual”.
Why then, don’t more brands make their suppliers’ lives easier? We’re missing a trick. Let’s flip the way in which we work with suppliers – rather than bombarding suppliers with information requests, let’s encourage them to do what we need.
We can learn from marketing
Let’s turn our attention to another department, one that has had to apply the principle of encouragement rather than force. Marketing cannot force potential customers to buy or adopt a product or service, instead, it engages customers, encouraging them to adopt or buy. This is usually by appealing to a need or emotion.
What’s obvious in the customer-facing world is customers have a choice. For example, as much as I would love to be able to require an audience to buy what we’re selling, to come to our events and read our content, I obviously can’t insist.
This is now, more than ever, the same with suppliers. Like potential customer, suppliers have a choice. The fact that brands need suppliers in order to collect net zero data, gives suppliers more agency. Suppliers now get to exercise choice through their behaviour, and it’s this choice that is absolutely central.
Now don’t get me wrong. It’s not that suppliers want to veto what brands need from them, it’s more that they’re facing too much noise in the form of new technology, information requests and the resulting processes. They’re overwhelmed.
If you want suppliers to engage in your net zero efforts, think differently. Simply piling on more pressure won’t get the best of them. Rather, let’s think more about persuasion and encouragement, and how to show them value. The marketing process involves engaging customers, building strong relationships with them and offering them value, with the purpose of capturing value in return. You’ll see three-quarters of this process is about how we appeal to customers, not the other way around.
If we apply this concept to suppliers, we get a useful way of thinking about the relationship. Why don’t we engage suppliers more, build stronger supplier relationships and create value for them? If marketing is anything to go by, the result will be that we capture value from suppliers – like getting them to complete compliance questionnaires, do forecasts, take part in quality programs and log into (and actually use) those expensive systems.
Rather than trying, in vain, to force suppliers to engage in net zero activity, let’s market to them.
Now, as net zero delivery dates creep closer, brands can empower themselves to step up by stepping into the shoes of suppliers and appealing to them. As we explore new ways of working with suppliers, who knows what solutions could be inspired?
By Anthony Payne, chief marketing officer of HICX, the supplier experience platform
Costas Xyloyiannis, CEO at HICX, discusses why the time is now for supplier experience in supply chain and procurement and its rise to the top of conversations in the space.
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“I feel like the focus is shifting.”
Gone are the days of supplier experience being hidden away in the background. Today, it sits as an increasingly important target area within the procurement and supply chain space. But it hasn’t always been this way.
For Costas Xyloyiannis, CEO at HICX, he is pleased to see supplier experience’s conversation grow. “I’ve been in this space for 23 years and even if we go back three or four years ago, no one was talking about it,” he tells us. “It’s great to see a movement beginning to happen.”
Speaking with CPOstrategy at HICX Supplier Experience Live in Amsterdam, a day before DPW Amsterdam kicked off, he revealed how satisfying it was to see its evolution take place. And clearly there’s a market for it. Scores of people filled the Tobacco Theatre in Amsterdam all eager to listen to the many discussions and speakers attending the half-day event. “It is very satisfying because you see people’s minds changing in the same way that it did for the customer and employee experience,” he explains. “What you have to think about is that almost every company is also a supplier so it’s in your interest to focus on the supplier experience side. In another context, you’re also a supplier and people should understand that we’re all in it together. If you don’t think about solving it, then you’re going to have that pain yourself.”
Driving Supplier Experience
Indeed, it’s an issue that needs solving. Xyloyiannis explains that not understanding the necessity of supplier experience is a common misconception because it affects everyone in different ways. “Sales and marketing are the ones likely to understand what it means to be a supplier but they’re detached from the problem,” he says. “They are probably going into a portal and filling things in many times, it’s just not procurement doing it so that’s why they can’t make the connection. What we all need to realise is that focusing on supplier experience is in all of our interest. Ultimately, you have to think it’s just the right way of solving a problem because I create efficiency for myself and I’m also a supplier.”
HICX Supplier Experience Live in Amsterdam in October 2023
Xyloyiannis goes on to explain that if the focus is on supplier experience, an opportunity has been presented to create net efficiency – which is a massive win for all. “This benefits everyone because it’s not a zero-sum game,” he says. “If you think about business cases of other solutions, it’s we’re going to fire people and cut headcount. If I take the US government example of 150 million a year to DNB, this would’ve been a saving they would make without impacting any other functions internally. No heads would have to be cut; nothing would have to be outsourced. In a way, it’s free money for everyone when you can create net efficiency.”
Moving forward
Today’s Chief Procurement Officer has a lot on their plate. Amid navigating continuous innovation and transformation, ESG’s ever-increasing influence and battling inflation concerns all on the back of an already disruptive few years, procurement finds itself at an interesting moment. But looking ahead to 2024, supplier experience has its seat at the table and will only become a hotter topic in the years to come, according to Xyloyiannis.
“A lot of leading companies are putting huge amounts of focus on it,” he tells us. “Henkel posted on LinkedIn last year that they were driving their whole strategy around supplier experience. Then you’ve got Heineken and Unilever who are getting more involved in the space too. I think it is very much at the forefront, particularly in companies which produce goods and services. Supply chain has become very global and there’s a benefit to outsourcing and all these things, but it does make it very fragile. That’s why now it’s become important to focus on supplier experience because we have such a high dependency on one another.”
In this article, Veridion’s CEO unveils the exciting world of AI in Supplier Discovery, shares the company’s journey into data enrichment, and concludes with some behind the scenes of how the company is enhancing its Search API with natural language capabilities, paving the way to data-driven future in procurement and beyond.
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In today’s world, global supply chains are facing persistent volatility and disruptions, leaving procurement companies extremely exposed to the fluctuations of markets and the associated risks from vendors. This unstable environment highlights the necessity of innovative approaches in procurement management, particularly the adoption of AI-powered intelligent data.
Deloitte’s 2023 Global Chief Procurement Survey reports that 89% of companies worldwide have been negatively impacted by inflation-related cost risks in the last year, with 79% also facing substantial supply shortages. These figures underscore the critical need for innovative strategies and technologies to address these challenges in procurement.
Embracing AI for supplier discovery: A game-changer in procurement
Perspectives from Veridion’s CEO, Florin Tufan
As procurement firms aims to master the complexities of the evolving supply chain landscape, artificial intelligence (AI) emerges as a transformative solution that promises significant benefits, especially in enhancing supplier discovery.
Veridion, a company at the forefront of data enrichment and innovation, is leveraging AI to streamline data-driven growth across many areas within industries. Florin Tufan, Veridion’s CEO, offers candid perspectives on the opportunities and challenges presented by AI in procurement, with a special focus on its capacity to refine the supplier discovery procedure.
Tufan talks about how leveraging AI for supplier discovery is transforming procurement from a process constrained by limited information and relationships to one that is dynamic, informed, and resilient. AI-enabled data allows companies to comprehensively understand the supplier landscape, enabling them to analyse and evaluate a vast array of suppliers quickly and efficiently.
“We come from a world where it wasn’t possible to learn everything about the entire universe. If you had three suppliers for one highly important thing, you’d much rather spend a lot of time strengthening that relationship and putting better protection in place. There was no easy way to ask about others and question whether you were working with the right ones while finding out if you had enough resiliency. No, you want to work with the best ones so that you’re covered and get on with the work no matter what.”
However, Tufan also highlighted that while AI has the potential to significantly cut down the time companies spend searching for new suppliers, it’s not a magic wand that instantly fixes all procurement issues. There are still things to be fixed in the supplier discovery process.
CPOstrategy speaking with Veridion CEO Florin Tufan at DPW Amsterdam
Veridion’s approach: Addressing the need for a more proactive and comprehensive approach in supplier risk management
Tufan’s insights suggest a pressing need for a more proactive and comprehensive approach in supplier risk management.
Tufan pointed out a critical shortfall in the procurement strategies of many large companies—they lacked sufficient redundancy in their supply chains. When the pandemic struck, these companies scrambled to identify and connect with the best possible suppliers in various regions. However, the process was fraught with inefficiencies. “The discovery phase alone took weeks, and that was before even determining if those suppliers were a suitable match. By the time companies could establish redundancy, it could be two years later, and that’s simply too late,” Tufan explained.
He observed that the focus in procurement has traditionally been on what is known about the top suppliers based on past interactions, often neglecting the broader, more holistic view of a supplier’s status and potential risks. “There are numerous instances where companies face downturns or disruptions due to economic or political factors, and their clients often find out too late,” Tufan noted.
Who is Veridion? The company’s journey to data enrichment in procurement
Veridion, a Romania-based company, operates in the segment of source-of-truth business data, providing comprehensive and up-to-date insights on private companies. The company’s solutions are addressing particularly procurement, insurance, and market intelligence data challenges and are powered by AI and machine learning capabilities. This technology enables Veridion to extract maximum value from data, enabling efficiency and innovation for their customers.
One of Veridion’s earliest projects in procurement, which significantly contributed to its exploration of data enrichment solutions, involved collaborating with semiconductor companies seeking to diversify from China and US manufacturers planning to onshore to South America. This experience gave CEO Florin Tufan and his team deep insights into the complex challenges of global supply chain relocation. Tufan described this journey as both humbling and enlightening, particularly in understanding the significant impact of supply chain shifts on everyday products.
The company’s approach to addressing these challenges has been methodical and innovative. By leveraging AI and machine learning, they have developed more efficient ways to harness data, enabling businesses to make informed decisions in rapidly changing environments. This approach is not just about providing data but enriching it to offer meaningful, actionable insights.
Veridion has become a key player in transforming how companies approach procurement and supply chain management. By focusing on data enrichment and leveraging advanced technologies, they have positioned themselves at the forefront of this critical industry, offering solutions that are as dynamic as the markets they serve.
This “incredible journey”, as described by Tufan, exceeds the goal of business expansion. It’s about comprehending and effectively responding to the complex challenging of global with real-time, accurate data.
Looking forward: Veridion’s CEO perspectives on latest technology innovations
“I’m 99% percent excited! At the core, we’re an AI company.”
Florin Tufan’s vision for the latest cutting-edge technologies and innovations such as generative AI is one of optimism and excitement. He sees it not just as a technological leap, but as a tool that will become integral to daily life and business operations, enhancing efficiency and connectivity across the globe.
When asked what big news is coming soon, Florin announced an upcoming enhancement to their Search API, set to launch this year. This significant update introduces semantic search capabilities, leveraging natural language processing to enable more intuitive, human-like search experiences. With this advancement, users will be able to conduct searches that closely align with their specific needs and queries.
Veridion’s Search API is modernising multiple procurement processes from supplier search to enrichment, setting a new standard of excellence with first-class vendor data. By incorporating advanced AI capabilities, this intelligent search engine has made significant strides in deduplication, cleansing, and enriching master data, addressing a critical challenge many companies face. Organisations often struggle to understand the full potential of their existing supplier networks for sourcing opportunities. Veridion’s data-centric approach ensures that companies can now leverage their current supplier base more effectively or find new ones, uncovering hidden opportunities and driving efficiency in procurement strategies.
It looks like Veridion is reshaping the procurement landscape, turning complexity into clarity and offering an unparalleled user experience. The company is marking a paradigm shift towards a more efficient, data-driven future in procurement and beyond.
Maarten van der Borden, Customer Transformation Director at Celonis, discusses the influence digital tools such as generative AI is having on procurement’s workforce.
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“When something new arrives on the scene, people have a tendency to immediately think of the worst-case scenario.”
Maarten van der Borden is a Customer Transformation Director at Celonis. As AI gets increasingly complex and advanced, there are concerns from some sections of the workforce that robots will take human jobs in procurement. Indeed, one of the biggest draws of automation is the cost savings and efficiency it brings, with AI able to complete some tasks almost instantly. But van der Borden challenges that notion and believes technology should be used as an enabler.
AI’s impact on jobs
“AI will, in my opinion, not replace anyone anytime soon,” he reveals. “What it will do is make life easier and change the way we operate. In the late 90’s, we couldn’t envision what having a mobile phone would be like. When those were first introduced, we thought how annoying it would be that you would always be reachable. Now we can’t imagine living without a phone.
“I don’t envision the elimination of procurement positions due to AI. Rather, a significant shift may occur in the transactional aspects of process analytics. Currently, individuals proficient in creating complex Excel macros or adept at extracting and transforming data into actionable insights are highly valued. These roles are likely to undergo changes, but this should be seen as an opportunity for enhancement, not a threat. It’s crucial to recognise this. My belief is that AI won’t be replacing jobs, particularly in procurement where human involvement is key. The role of technology should be to empower and improve processes in procurement, not to replace the human element.”
Maarten van der Borden, Customer Transformation Director at Celonis
The journey
Over the years, Van der Borden has distinguished himself through a series of impactful transformations and strategic developments, primarily at the nexus of IT, business operations, and finance. His journey has been marked by the successful management of large-scale programs, where his ability to engage cross-functional teams and collaborate with stakeholders at all organisational levels has consistently led to the achievement of key goals. Notably, he has a history of taking on complex and challenging projects, steering them from concept to completion under stringent conditions. This track record has established him as an influential change agent, known for transforming underperforming organizations into models of high performance and efficiency.
Having began his career in the Dutch Military, he experienced a similar journey to many procurement practitioners. Van der Borden fell into the space by a “happy accident” and never left.
He shares, “I didn’t know much about procurement initially, but I quickly grew to love it.” His journey led him to DS Smith, a major packaging organisation, where he successfully spearheaded a comprehensive global procurement transformation. Subsequently, he transitioned to head the finance transformation within the same company. In this role, he sought a tool that could effectively navigate the unique challenges of procurement compared to finance.
“I needed something that would show me how our financial processes really ran. It meant finding the most impactful inefficiencies and developing an action plan to deal with them.”
Celonis today
This search brought him to Celonis’ process mining capability, a product that resonated with him so profoundly that he decided to join the company. “Right now, I am a Customer Transformation Director at Celonis, which means I help our customers organise themselves around this solution because I firmly believe implementing a tech solution by itself doesn’t do anything. We will always need the human element to make the change and create value, based on the insights tech provides. I’m very happy to be here.”
Today, Celonis is the global leader in process mining, providing companies with a modern way to run their business processes entirely on data and intelligence. The firm pioneered the process mining category more than a decade ago when it first developed the ability to automatically X-ray processes, find inefficiencies and implement immediate, targeted, and automated action to resolve them.
Gen AI drive
Procurement is in a transformative moment. At DPW Amsterdam, generative AI was the buzzword on attendees’ lips everywhere you looked. For van der Borden he acknowledges how rapidly the space is changing as a result of an increased influence of digital tools.
“To me, the first big thing to realise when we talk about gen AI is the democratisation of data and process analytics,” explains van der Borden. “I think what’s really important is that procurement realm to me is a prime example of where gen AI can have a huge impact. I think what gen AI will do is open up the capabilities of analytics to a much wider audience than today. People who may previously have trusted some Excel sheets or PowerPoint slides presented to them to make decisions can now freely explore, or even converse with their own data and make informed decisions themselves. You start to build a community of data analysts rather than just having consumption of data analytics. That to me is the big game changer that gen AI is actually providing procurement with.”
Procurement’s perception
CPOstrategy sits down with Maarten van der Borden, Customer Transformation Director at Celonis, at DPW Amsterdam 2023
By its own common admission, procurement used to be boring. A function hidden out of sight and kept far away from the c-suite. Now, it’s front and centre, firing on all cylinders. Indeed, the Covid pandemic helped drive it towards the top of the agenda, in addition to other enablers such as transformation and ESG. For van der Borden, he believes procurement is beginning to shake off that old skin and be seen as more of a strategic function.
“We’ve received a bad reputation in the past because the impact has not always been clear,” he tells us. “Some analysis that people do on procurement as a strategic function is to ask what’s the real impact? Yeah, you manage the supply and demand but as long as I have my blue ball point where and when I need it, you’re doing a good job. If things start to fall over then procurement used to get the blame. What I’m really happy to see is that more and more CEOs are seeing procurement as a strategic function, not only driving value in the financial domain but also more and more as the primary contributors to a more sustainable future and the guardians of our corporate brands.
An evolution
“There’s been a noticeable evolution in procurement, particularly in the merging of processes like source-to-pay, procure-to-pay, and purchase-to-pay. Our definitions in these areas haven’t always been crystal clear. However, when you delve into purchase-to-pay, it’s apparent that this is where the transactional activities occur. Due its very transactional nature, this phase is measurable and reveals the outcomes of our upstream actions in sourcing. I’ve observed that these areas, despite often being managed by separate divisions or functions, are intrinsically linked. The transactional aspects are commonly seen in shared services, while the sourcing aspects represent traditional procurement.
“Bridging these two areas, in my view, is a significant shift. This is where technology truly demonstrates its value. By integrating and examining the transactional processes to understand their shortcomings, we can trace back to the root causes, often found in sourcing. This integration is fascinating to me. It allows us to assess the real impact of our efforts.”
DPW has announced it is expanding into North America following the success of its Amsterdam offering.
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DPW has announced it is expanding into North America following the success of its Amsterdam event.
Founders Matthias Gutzmann and Herman Knevel revealed the news via LinkedIn to confirm a move that will see significant growth into new territories.
Gutzmann exclusively told CPOstrategy: “Marking a pivotal moment for DPW, our expansion to the US isn’t just about growing our footprint, it’s about building on our ongoing momentum over the last few years and bringing the enthusiasm and expertise of DPW.
“We aim to bridge procurement organisations with innovative startup founders and change makers, fostering the growth of a digital procurement and supply chain ecosystem in North America.”
Accompanied by a photo of the duo outside Google offices in Silicon Valley, California, he posted on Monday (27th November): “I am currently in #SilliconValley together with Herman Knevel, gearing up for an exciting week filled with meetings with tech giants, founders, visionary partners and future collaborators.
“Having previously led the expansion of Procurement Leaders | A World 50 Group Community into North America, I must say I feel extra energised to bring my experience and strong relationships within the North American market for the benefit of DPW.
“Stay tuned for more updates as we embark on this exciting phase of growth and innovation!”
Founders Matthias Gutzmann and Herman Knevel
Since launching DPW in Amsterdam in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. The conference welcomed over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October.
Last year’s event was held at the former stock exchange building, the Beurs van Berlage, with the theme called “Make Tech Work” which focused on turning digital aspirations into a reality. DPW Amsterdam has already been announced for October 9 and 10, 2024, next year.
Further details about DPW North America will be revealed in due course.
At DPW Amsterdam 2023, Sigbjørn Nome, CEO and Co-Founder at Ignite, discusses the importance of a people-first mindset in procurement.
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“It’s super important to get the right people in procurement.”
Sigbjørn Nome, CEO and Co-Founder at Ignite, is passionate about talent. The company is now armed with 60 employees and has become an organisation of choice for many graduates in Norway. According to Nome, building a positive environment that empowers staff holds the key to long-term success and growth in procurement.
“We’ve managed to get a good reputation in Norway and recruit top talent,” he tells us. “In the beginning, we used the best students and offered internships to help us build the first version of the product. Then we built a good relationship with the universities in Norway and we’ve also recruited lots of senior hires too. There’s a great combination of talent within Ignite.”
Ignite is an advanced yet simple spend management solution that gives customers the power of correct and holistic data, transparency, and actionable analytics to empower data-driven decision-making. This way, customers not only save money and avoid risk but also make smarter choices and drive value across their organisation. Ignite provides a one-stop shop to consolidate, clean, and enrich data, get advanced procurement analytics, conduct supplier assessments, as well as holistically managing suppliers and contracts and quickly and automatically estimating their Scope 3 CO2 footprint.
With a background in consulting, Nome worked on a variety of procurement transformation projects and has witnessed significant potential in the space. Having decided to form Ignite in 2016, the organisation began as a consulting firm but it was later decided to be delivered as a software-as-a-service (SaaS) company. “As a consulting business, you are cashflow positive and you earn money from the get-go. While for a SaaS business, you need to invest a lot in product and productive development,” he tells us. “It is quite a challenging change. As a business owner, you also need to sell and be more out there to get customers. There’s been a lot of challenges and one of those has been building the team which I’m really proud of.”
Procurement’s evolving function
Procurement is changing. Traditional procurement revolved around delivery, cost and quality. Now, given the nature of environmental challenges as well as the necessity of data analytics, people with diverse skill sets are needed more than ever before. Nome believes it’s about changing the mindset of procurement. “You’ve got to shift that mentality because the function is so different today,” he explains. “In the future, it’s going to be a more collaborative function because procurement teams cannot win alone.”
With that future in mind, Nome recognises the space is a different beast today than it was a decade ago. Change dominates the industry and the players that embrace transformation will be the ones who win. “You need to use procurement as a lever to get change done,” he tells us. “It’s not enough anymore to look at your business only, your responsibility also extends to your suppliers. It’s about where you spend your money and your negotiation power because customers will look at that. I would say the regulation demands will offer a broader perspective, not only looking at your business but also how you spend your money.”
At DPW Amsterdam 2023, Alan Holland, CEO of Keelvar, tells us about the acceleration of digital transformation in procurement and what it means for the next generation of the workforce.
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Keelvar’s mission is simple – to help procurement teams globally to scale sourcing excellence.
Keelvar is powered by unique artificial intelligence, designed by category experts, to deliver significant savings and operational improvements for global enterprises such as the likes of Siemens, Coca-Cola, Samsung, Novartis and more. The company was founded in Europe’s largest AI research lab by a team of computer scientists and engineers specialising in AI, optimisation and game theory applied to strategic sourcing. Keelvar has raised $42 million to date in funding to accelerate product development and global growth.
The company is led by Alan Holland who has served as CEO since the company’s foundation in September 2012. Indeed, in his first year, he led the organisation to win the Cork Company of the Year in the small company category, and the firm has more recently been awarded a Gartner Cool vendor.
Having previously served as a lecturer in artificial intelligence in University College Cork’s Computer Science Department, Holland specialised in Optimisation, Game Theory and Algorithmic Mechanism Design. Such experience has helped give Keelvar an edge in terms of innovating with offerings that exceed competitors’ technical capabilities. This enables Keelvar to define an entirely new category of the solution, putting Keelvar in an ideal position to lead this new category that Keelvar has called autonomous sourcing.
CPOstrategy sitting down with Alan Holland, CEO at Keelvar, at DPW Amsterdam 2023
Evolution at scale
Procurement is in a state of flux. The industry is experiencing unprecedented amounts of innovation and change in a way which has ripped up the playbook of what went before it. However, Holland believes it is only in the past half decade or so where transformation has really started to take place. “If we look at the last 10 years, the first five of those procurement was very slow to change,” he discusses. “What we saw were technology landscapes dominated by a small number of large suites vendors who had acquired many companies, but most enterprises were satisfied in buying all the modules they would need to run their procurement function from one vendor. Rarely was it the case that the various modules did what their customers needed. Some of them might have worked in some ways, but others just didn’t serve the need at all.
“In the second five years of our being, things started to change. We did start to notice an increasing acceptance that best-of-breed was the way forward and that enterprises needed to accept that if they were to get the buy-in from their stakeholders, then they needed to work with a combination of best-of-breed vendors and piece together their specific technologies landscape rather than just buying it in bulk from one. I would say it was gradual at first and then suddenly, but it’s only been suddenly in the last couple of years. The pandemic likely accelerated some of that change.”
Trust first
Holland explains that in recent years, large multinationals are placing an increasingly important level of trust in smaller, best-of-breed vendors such as Keelvar to allow them to run their sourcing events and meet niche demands. He believes that in the past it simply wouldn’t have happened and strives to prove that faith right. “I suppose that’s a process where enterprises are gradually increasing their trust in what are smaller vendors, but these smaller vendors are becoming bigger because we’re serving hundreds of large enterprises,” he explains. “We’re gaining in strength and momentum and the barriers to adopting best-of-breed at scale are lowering and the market willingness to jump those barriers is increasing. That momentum is just gathering more and more force.”
Alan Holland, CEO at Keelvar
Using tech as an enabler for talent
Procurement’s talent shortage and the ways to bridge has been a hot topic for years. Whoever you speak to within the industry, everyone will have a different viewpoint. Some say procurement needs a rebrand, others say it’s a lack of education while others think technology could hold the key. For Holland, he believes it’s about making tech work and freeing up people in procurement’s time to focus on more value-add work that will help solve strategic goals.
“What is attracting graduates to procurement now is working with intelligent systems that are powered by AI and that allow them to be strategic and not working on routine or tactical tasks because machines are taking over the data-intensive areas of processing these workflows,” he tells us. “Our second product, which we launched about three years ago is autonomous sourcing. These are sourcing bots that are intelligent software agents that you can now design, build, and operate your own sourcing bots. If you’re somebody who understands best practices in sourcing, you can now build automated workflows so that instead of having to run sourcing events one by one and get through 15 or 20 a year, now you could design bots that are running hundreds of these events per annum.”
Procurement’s bright future
While not only opening up people’s day, using technology as an enabler to make life easier also acts as a way of encouraging the next generation into the industry. “What you’re doing is freeing up many other people’s time to spend on relationship management or innovation discovery and talking to the market, finding out what new suppliers you should be dealing with, visiting suppliers to check things are in order,” he says. “And that is the type of work that people enjoy doing. Machines are taking more of the data-intensive work off their tables, and machines are not good at work related to establishing trust. Machines have no empathy, but people do. The soft skills in procurement are becoming ever more important because the machines are taking over the harder skills. That is leading to a transformation in the type of work that procurement is doing.
“It’s also leading to a transformation in the interest levels that graduates emerging from universities have for this sphere. When it used to be that they were first introduced to a legacy system and told that this is what they needed to use to do their job. Young workers are coming with higher expectations about software and rightfully so, and enterprises are reacting to the need to satisfy the technology requirements of younger recruits now, which is a very good thing. It’s accelerating that digital transformation that we are seeing.”
The next step
Looking ahead, Holland is full of positivity for the future and believes decision-making in procurement is easier than it’s ever been. He believes tomorrow is “very bright” as procurement enters an era with intelligent software agents which can automate workflows and make the human workday more efficient. “There’s a whole new range of possibilities where creative and thoughtful planning will provide a competitive advantage for organisations and procurement can be far more influential in how successful their companies can be. It’s a game-changer.”
At DPW Amsterdam 2023, Danny Thompson, Chief Product Officer at apexanalytix, tells us about the art of developing trust amid significant innovation in procurement.
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Trust.
Apexanalytix needs to build quite a bit of it. As a company which protects $9 trillion in spend and prevents or recovers more than $9 billion in overpayments annually, its client portals actively support over eight and a half million suppliers.
Indeed, apex has revolutionised recovery audit with advanced analytics and the introduction of first strike overpayment and fraud prevention software. Today, apex is a leading global force in supplier management innovation with apexportal and smartvm, now the most widely used supplier onboarding, compliant master data management, and comprehensive third-party risk management solution in global procure to pay. With over 250 clients in the Fortune 1000 and Global 2000, apex is dedicated to providing companies and their suppliers with the ultimate supplier management experience. A big part of that experience is based on building trusted supplier-buyer relationships.
Danny Thompson is the Chief Product Officer at apexanalytix and has been with the organisation since July 2015. Now in his third role with the company in eight years, Thompson reflects on his journey with the organisation with positivity. “I came in as a product manager working on our portal product,” he tells us. “And after a short time, because I was a former customer, at Pfizer and International Paper Company, and was an internal voice of the customer, they ended up having me drive messaging with marketing. Recently, we hired a great new leader of marketing who has taken that over fully so I’m dedicated full time to product again. So it’s been a great experience for me.”
Gen AI surge
One of the hottest topics on the CPO agenda in recent months has been ChatGPT. Wherever you go within the industry, you’ll likely find a conversation being had about the technology’s possibilities, as well as perhaps its limitations or challenges – and Thompson is equally keen to explore.
Danny Thompson speaks with CPOstrategy at DPW Amsterdam 2023
“There is certainly a lot of attention being paid to gen AI in the industry, and within our company as well,” says Thompson. “I think it’s because of the shock value of ChatGPT hitting the world and people are really stunned by its ability to interpret natural language and come back with really good information in response to questions that are being lobbed at it. There’s a lot of excitement around what it could do as well as what other generative AI solutions can do to help solve procurement, supplier risk and supplier information problems. We are making progress, and have introduced some generative AI functions, but Generative AI presents some challenges right off the bat that we are working hard to solve as quickly as we can.”
One of these issues is the hallucination problem that is being questioned within the space. This is where AI tools like ChatGPT lack factual support for some of the information provided. “There’s a statement at the bottom of the page which states you can’t rely on results being factual,” Thompson affirms. “When it comes to supplier information and risk management, that’s a problem.”
Managing risk
And it is such an important sticking point that Thompson stresses when it comes to supplier risk information, it is about being careful that the usage of generative AI, in its current state, is used for guidance rather than fact-finding. “Another challenge is around leakage of sensitive information combined with contamination of sensitive or important information,” reveals Thompson. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 1000 and Global 2000 companies. That is the best information we’ve been able to accumulate about suppliers and their relationships as a supplier to large companies. Some of that data is publicly available and some of it is more sensitive. We want to make sure we’re not loading that sensitive information into a generative AI function that might allow random people to access that information. We’ve got to be careful about that leakage of data.”
The opposite is true, as well. Thompson reveals that his team asked the generative AI-tailored questions which they assumed would be pulled from their own database. The findings were less than ideal. “The responses had been contaminated with public information which was full of inaccurate data,” he tells us. “We’re figuring out how to draw those boundaries, as well—to protect sensitive data while also preventing contamination.”
Trust first
This showcases the importance of trust once again to an organisation like apex. The companies it serves are moving significant sums of money around and the potential risks are sizeable. For Thompson, there can be no greater responsibility when using AI tools. “The data must be either highly accurate or at least they understand the degree to which it’s not,” he says. “If you don’t understand that level of trust you can have in it, then you shouldn’t be using it yet.”
With an unprecedented amount of technological innovation at procurement’s fingertips, the industry is evolving at a rapid pace. It’s placed at a unique moment with digital transformation being swept up throughout the space. While this brings obvious advantages such as time and cost savings, it also means increased cybersecurity threats. “There are more threats coming in as a result of AI,” says Thompson.
“One of the biggest challenges our clients us our solutions to solve for is fraudsters trying to take over a supplier’s account and intercept their payments by submitting fraudulent account change requests. One of the typical ways companies catch these is very often the request is coming through very poorly formatted emails with bad grammar. But what we’re seeing is the bad guys have started using generative AI to create really convincing bank account change requests so there are increased threats to be aware of. But this increase in the availability of information is also make easier the whole process of knowing your supplier and knowing the risks associated with them. And Generative AI is going to allow you to quickly get help to understand how to mitigate a given risk much faster and easier than it’s ever been before.”
A passionate advocate for diversity, inclusion and equity of opportunity, Executive GM Ana Marinkovic leadsa team of 1,600+ small business experts. They lend over $1.2bn a month to Australian small businesses. National Australia Bank (NAB) plays a major role in propelling entrepreneurship across the country. Delivering better outcomes for small business owners sits at the very heart of NAB’s strategy. “Our scale and connectivity help us to tackle some of the biggest challenges facing our business and the communities we operate in,” says Ana.
TUI: Making travel plans mobile
The mobile side of TUI has never been more vital. TUI’s mobile apps were officially launched in 2013 and began as something of a proof of concept. For the entire international industry, moving from web to mobile devices was a huge shift. The initial set of apps were very skeletal and only integrated for UK and Nordic customers.
One of this year’s goals is to accelerate the native journey to make all the customer journeys native. This will further improving the customer experience. After a recent UI refresh, the app look and feel is fresh and sleek, and has plenty of exciting features for customers to enjoy. “Just in the last couple of months we’ve introduced an integration with OpenAI for a travel planner that helps you choose excursions,” Donia adds. “Seeing it grow over the years is so exciting.”
TARA Energy Services: tech fuelling growth
“Continuous improvement is woven into the fabric of the culture at TARA Energy Services,” says its proud Director of IT, Paul Parzen. “Every day, we face new challenges, both operationally in the field and strategically in the boardroom. We must make sure the organisation’s IT strategy for data management, core infrastructure, network architecture, and security is ready to meet them.”
Link Group: Shaking up UK’s pension market via digitalisation
“Some people might say, ‘wow, a pension. That sounds a little boring.’ But at the end of the day, what we do is help people retire in the best way possible and that’s a pretty good place to be.”
Those are the words of Dee McGrath, CEO of Link Group’s Retirement Solutions since May 2019. The company is a global, digitally-enabled business connecting millions of people with their pension assets – safely, securely and responsibly.
Evara Health: Technology delivering care for all
Evara Health’s mission statement is to help people become healthy and live healthy lives, and that means all people. A lot of health organisations don’t serve everybody and their treatments aren’t available under many types of insurance. However, Evara Heath doesn’t turn anybody away. It supports the underserved and the uninsured, and patients are treated regardless of whether they can afford it. Around 25% of patients have no insurance at all, and over half are covered by Medicaid, which isn’t accepted by everyone.
At DPW Amsterdam 2023, Daniel Barnes, Community Manager at Gatekeeper, discusses the evolution of the procurement function and the influence tools such as generative AI are having in the space.
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“It might sound harsh, but people just won’t have a job if they don’t change.”
For Daniel Barnes, Community Manager at Gatekeeper, his thoughts are clear. Technology is here and it’ll only get more advanced.
Barnes has been the Community Manager at Gatekeeper since June 2022. The company he works for is a next-generation Vendor & Contract Lifecycle Management (VCLM) platform that was born in the cloud and works on any device. Gatekeeper has a strong focus on collaboration, clear actionable data, obligation and compliance tracking, email alerts and most of all ease of use. The firm has a ‘zero training’ mantra driving a fanatical focus on usability that results in an application internal stakeholders and suppliers can use effortlessly.
The Gatekeeper Platform provides a suite of vendor management, contract management, kanban workflow, collaboration and reporting features. Customers can extend the functionality of Gatekeeper with additional modules to meet their required use cases, as well as integrating with over 220 third-party solutions.
Technology potential
Since joining the company, a key consideration for both Barnes and Gatekeeper has been the influence of generative AI. However, Barnes explains that while the potential of the technology is exciting, they are being strategic about how to leverage AI.
“We’re probably taking it a little bit more of a slower approach,” he tells us. “We have a contract summary function at the moment which means for any contract we summarise it so that anyone in the business can get a really quick understanding of that contract. We’re also exploring whether we’re going to bring in a Gatekeeper bot that allows us to get insights analysis in a very conversational manner. One thing we really believe is that contract and vendors aren’t just for procurement or legal. Everyone in the business has to contribute to make these successful. A lot of the issues, data and information behind these are legally complex. Procurement language is difficult when you’re talking about RFPs or you’re talking about risk. Someone in the business doesn’t care about that, they just want to get whatever they have brought, they want the service, they want it performed, they want it on time and they want a good relationship. We’re trying to figure out how to use AI like that.”
CPOstrategy speaking with Daniel Barnes at DPW Amsterdam 2023
The rise of Gen AI
Generative AI isn’t exactly new. In fact, it actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. But, given the introduction of a far more advanced model – ChatGPT – gen AI is the name on not only procurement’s lips but the wider world too. Barnes questions what you need to make AI successful at implementation.
“You get data and most procurement and legal teams have an issue with data because they don’t have it in one place,” he explains. “We fundamentally believe in this three-pillar approach. It’s to restore visibility and to have all your vendors and their contracts in one place. From there, you take control of that by digitalising all of your processes. Once they’re digital, you can track and automate them from various data points that you have in your vendor and contract records. That allows you to safeguard compliance, whether that’s regulatory, legislative or by contractual obligations. They’re all different forms of compliance that you need to track. Most teams are really struggling just with those. When we talk about gen AI, the reality is most teams are still so far away from even being able to realise those benefits. Today, gen AI looks powerful once you have the pillars in place and I’m really excited about its future.”
Procurement’s evolution
Indeed, procurement stands at a unique moment. With some in the space used to operating a certain way through legacy systems and others embracing a digital transformation and the technological innovation that brings with it, Barnes recognises that people who are reluctant to change could be left behind. “I think there has to be a willingness to change,” he tells us. “I’ve been talking about change in procurement since 2019, and I would say 80% of people who are engaged are hesitant and don’t want to change. That’s a really big concern. But my biggest worry is they don’t want to know in the first place. One of my fears is you’ve got so many solutions that genuinely can eliminate work in procurement teams. I’m worried for those people who don’t want to change because what are they doing when their work’s automated?”
The future
Barnes, who also hosts the World of Procurement podcast and YouTube channel, believes there is a current cultural divide in procurement and the industry is at a make-or-break moment. He affirms procurement will go “one of two ways”.
“You’ve got people who are stuck in the past that are archaic with what they’re doing. Then there’s those who are really pushing the profession forward,” he explains. “I see it as a moment in time where procurement kind of goes one in two ways. It’s extinct in terms of how it used to be. There’s solutions that I’ve seen which have automated workflows and are doing the work that traditional procurement people used to do. We can pull people along, but there has to be an initial willingness to change too or it’s not going to happen. That’s why I think it’s great to see people that are showing that willingness. They may not have the answers, but they want to learn.”
Michael van Keulen, CPO at Coupa, discusses the emergence of gen AI and whether procurement is in a golden era amid technology transformation.
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Generative AI, or gen AI for short, is one of the hottest topics in procurement today.
Indeed, the introduction of ChatGPT has only accelerated its prominence into wider consumption. Gen AI allows its users to quickly generate new content based on inputs. These models could include text, images, sounds, animation, 3D models or other types of data. One of its biggest draws is the ability to understand different learning approaches and allows organisations to move quickly to leverage large quantities of data.
But despite obvious benefits such as time and cost, Michael van Keulen, Chief Procurement Officer at Coupa, stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”
Van Keulen is a passionate and seasoned procurement evangelist with a comprehensive track record of driving value through business transformation at global companies. Since March 2020, van Keulen has been the Chief Procurement Officer at Coupa, a leader in cloud-based business spend management software, where he is responsible for driving best-in-class procurement practices across the company, supporting business development and being a source for peers looking to elevate and transform procurement. Van Keulen is especially passionate about building teams, driving value, organisational transformation, CSR, and diversity and inclusion.
CPOstrategy speaks with Michael van Keulen, CPO at Coupa, at DPW Amsterdam
The rise of AI
In the case of Coupa, the firm has been conducting its community.ai platform for the past decade which has been at the heart of the company’s strategy. Community.ai analyses real-time spend data, applies AI to compare company’s metrics against others and offers ways for organisations to be more efficient, profitable and sustainable. Van Keulen believes that the biggest difference between what Coupa offers and what gen AI provides is the trust factor.
“At Coupa, we measure information based on real spend, data and suppliers that are doing real business together – the internet isn’t doing that,” he discusses. “We’ve got nearly $5 trillion of spend under management from real transactions and real suppliers. That number continues to grow as customers and suppliers join the Coupa community. Pretty much all of our customers have trusted us with access to their sensitive data which we anonymize and then share back with the entire Community. As a member of the community I know I can trust it because it comes from a source that is reliable, sanitised, relevant and well-governed. As well, we have certain standards and algorithms that we built-in all based on outcomes that our customers are looking to receive.”
Van Keulen believes there is a misconception in procurement that ready-made data sets are out there that are capable of meeting customer requirements. “The truth is most tech companies out there today don’t have access to customer data because their customers won’t let that happen,” he explains. “But at Coupa, our customers have already given us access to their data. This means we now have a real, reliable, accessible, governed and structured data set that has been anonymized. When we then apply AI, you actually get prescriptions that are meaningful and relevant to procurement. I think the misconception is that this type of data set is easily found, but it’s not, we’ve been building this for over 10 years. There’s no other company out there that has the same level of spend data as Coupa.
“It’s the same as Google Maps. The only way that Google Maps works is because everybody uses it. It allows me to get from A to B to C to D, back to A in the quickest time and with the least amount of disruption. The only way that that works is because we’re all using it. And I look at AI no differently in spend as I do with AI in my private life.”
Michael van Keulen, CPO at Coupa
Bridging the talent gap via AI
The need for fresh talent in procurement has never been so important. Procurement, like many industries, is lacking a defined path to welcome the next generation of talent, a feeling which has only been amplified on the back of COVID-19. This means the need to find ways to meet that shortage head-on, whether that’s through education, an industry rebrand or via AI. In van Keulen’s mind, he believes developing the correct tech landscape could hold the key.
“I’ve actually said this for a while,” he explains. “For too long, we brought in super smart people and then we would let them work in some antiquated old-school ERP, in Excel and run RFPs in emails. Nobody wants that, especially the current workforce because they’re used to and have been raised with Amazon, they all have TikTok accounts and are used to all these other e-commerce websites which have very seamless systems. If they come into the workforce and I let them work in some outdated ERP environment with email as the means of communication, that talent is either going to leave procurement because they think it’s boring or they’re just going to leave the overall organisation and work somewhere else. We don’t want that to happen, so you need to have the right tech landscape in place.”
Once the strategy is formed, van Keulen explains that is where the fun of procurement begins. “Then procurement’s the coolest function in the world and we will close the talent gap,” he says. “The talent is out there, they’re just not coming to procurement. They’ll go to finance, marketing, legal or IT instead. If you execute procurement properly, it’s the best because you’re right at the heart of everything. But you need the right people, operating model and operationalisation of your procurement process as well as the right technology. You need all of those elements or it’s never going to work.”
The greatest time in procurement?
Given the disruptive nature of global challenges and its ripple effect on procurement and the supply chain over the past few years, organisations are increasingly waking up to the importance of developing greater strategic relationships with suppliers. COVID-19, inflation issues, natural disasters and wars have meant today’s CPOs have been forced to firefight and think more strategically than ever before. Van Keulen recognises the turbulent nature of recent years and believes major transformation is already underway in procurement. “Historically most executives in any company would pay very little attention to their supply chain,” he reveals. “Due to recent events, companies are realising that they need to be closer to their suppliers. Perhaps in the past, the CEO would only spend a small fraction of their time with suppliers but those metrics are changing rapidly.”
As the ground lies in procurement, some sections of the industry now believe it is the industry’s greatest era given the level of possibilities. Widely considered a back-office function tucked in a corner and working in a silo, procurement is a totally different beast in today’s world. For van Keulen, he likes the variety.
“I wear so many different hats every single day,” he explains. “I always say sometimes I’m an accountant, others I’m an environmentalist. Sometimes I’m the treasurer or a finance person, but I’m also sometimes a psychiatrist. Sometimes I’m a doctor, a nurse, a lawyer, a judge, an environmentalist and yes even a wizard. I never know what my day looks like. I can plan it, but something may happen where everything goes out the window. Procurement will always be going through some type of disruption and it’s about how you drive the competitive edge and how you drive value despite that. Procurement really is the best gig in the world and it’s great that more people have started to see that now too.”
Erik Oberländer (DE), Manager, Procurement Advisory, PwC, discusses how to combat inflation and maximise savings through game theory.
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Material scarcity, rising inflation, exploding energy prices, and an unstable geopolitical situation pose procurement challenges like never before.
The right negotiation strategy is not only essential for companies to achieve cost savings but is also absolutely vital for survival.
In the current market situation, securing material availability often takes top priority. In this case, negotiations with suppliers must be based on partnership and close cooperation. On the other hand, if contract volumes have been awarded in competition between multiple suppliers with a high degree of shiftability, the use of game theory should be considered.
But what does the game-theoretical negotiation approach look like? In a classic bilateral negotiation, the focus is on convincing the other party with the right strategy and tactics, a convincing storyline, and compelling arguments for one’s own position. In contrast, the game-theoretical approach involves developing a bidding mechanism that maximises the competitive dynamics between suppliers. The design of the bidding mechanisms is based on insights from numerous scientific theories.
In fact, since the 1990s, several Nobel Prizes in Economics have awarded in the field of game theory. This scientific approach opens up new perspectives in complex negotiations and makes it possible to forecast how people tend to behave. In strategic procurement, many companies use game theory in bids and negotiations. After realising unimaginable savings results, procurement teams are electrified and absolutely convinced of the effectiveness of game theory.
Game theory in procurement
The two most relevant and commonly used bidding mechanisms in procurement auctions are the Dutch (ascending bid increments) and English auction (descending bid increments). In combination with other elements, such as qualification and ranking rounds, they can maximise competitive pressure through credible market transparency.
However, when developing any game-theory-optimised bidding mechanism, many questions should be asked. For example: How should the lots be formed to create the greatest possible competitive pressure? What decision will a supplier make if it is assumed that they want to maximise their own benefit – and how do you optimise the bidding design to take this into account? With what bidding design can you put the best suppliers under pressure?
These criteria are met:
Game theory is fascinating – with demonstrable successes that cannot be achieved through classic negotiations, with the consistency and “purity” of its systematics, and with the surprising realisation that some game-theoretical approaches have been intuitively and unconsciously used to increase strategic competition and minimise risk aversion.
Many procurement teams believe this approach only applies to certain categories of goods. This is a misconception. Generally, only three criteria will be met. We call them the 3Cs:
•Comparability: All relevant decision parameters will be taken into account and is monetised through a bonus-malus evaluation. The offers of participating suppliers are comparable, and award decision is based on total cost of ownership.
•Commitment: The award decision is completely open. All participating suppliers are released by the department, and all cross-functions can win the contract on their own. In addition, it is clearly communicated that there will be no renegotiations or vetoes in further procurement committees.
•Competition: There must be more than one supplier interested in the scope of the award. Only this way can a competitive situation be created that is maximised with the help of a tailored award design. The right incentives for suppliers must be identified, and the appropriate signals set.
Possibly, not all of these criteria are met at the beginning of the project, but they can be developed together in cross-functional teams (consisting of colleagues from procurement, engineering, quality, logistics, and sales).
How the award is carried out:
Once the 3Cs are met, suppliers must be prepared for the award event. In transparent communication, the mechanism and rules are explained, and any uncertainties are clarified. No supplier should be unsettled, because only if the supplier has fully understood the mechanism, can he behave optimally, and the award mechanism can achieve its full effect.
The award day is then carried out with suppliers on-site or virtually via eAuction tools. Especially for larger award volumes, it is advantageous to have suppliers on-site, as signals are also sent to suppliers between rounds. In addition, you can literally feel the tension level and adjust the bid steps accordingly.
Virtual implementation facilitates the scaling of the approach with multiple providers. Smaller award volumes are carried out quickly and without great coordination effort. The selection of the appropriate tool provider is crucial. Not all tools can map more complex award mechanisms and adapts to specific individual starting situations.
Here are the first steps:
It must always be considered that game theory is a complex science and cannot be simply applied. The preparation time for the design of award strategies is often underestimated and set too low. To become a good game theorist, it is not enough to attend a weekend course or read a book. In fact, the unprofessional application of game theory can do more harm than good. Therefore, it is strongly recommended to be accompanied by a coach during the first use – only with this expertise are amazing negotiation results possible.
It is not always easy to delegate final decision-making authority to a mechanism, but it is worth it. Successful awards can ignite the fire in procurement teams. It is important to generate maximum enthusiasm, support cross-functional cooperation, and institutionalise negotiating skills in procurement teams.
By Erik Oberländer (DE), Manager, Procurement Advisory, PwC
CPOstrategy compiles five ways that ChatGPT can transform procurement amid the rise of generative AI in the space.
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ChatGPT is seen by many as a catalyst for the next wave of technology transformation.
The technology, which was developed by OpenAI, has quickly become the buzzword of the year and one of the hottest topics on the c-suite agenda.
And its promise extends to procurement – an industry that relies heavily on the need for achieving efficiency, transparency and cost savings. Having already made its mark on a variety of industries already, procurement hopes that by embracing ChatGPT it will allow teams to make greater strategic decision-making to drive long-term value.
Here are five ways ChatGPT can transform procurement.
1. Rapid research
Through ChatGPT, time-consuming and cumbersome tasks such as research can now be completed almost instantly. Generative AI tools such as ChatGPT can analyse significant amounts of data and provide insights on market fluctuations while also searching for new suppliers, products and capabilities to secure better deals.
2. Automated procurement processes
ChatGPT can be used to discover patterns and identify trends which will allow procurement teams to make data-driven forecasts. Through leveraging predictive analytics, organisations can anticipate demand, optimise inventory levels and manage their supply chain more effectively.
3. Easier communication with suppliers
Tools such as ChatGPT can improve supplier performance tracking through automating data collection and analysis. Its focus on cooperation and transparency throughout the procurement process allows for stronger supplier relationships and more innovative thinking.
4. Enhanced risk management
A major benefit of generative AI in procurement is improved risk management and the ability to foresee potential dangers. Through identifying potential hazards such as financial instability among suppliers or non-compliance with procurement processes, ChatGPT can help businesses manage and reduce risks.
5. Cost savings and increased efficiency
ChatGPT can help organisations to save costs by automating operations, increasing stakeholder participation and allowing real-time data analysis. By reducing the amount of time and effort for tasks like evaluating bids and selecting a vendor, ChatGPT could shake up the procurement process immeasurably.
At DPW Amsterdam, Ashwin Kumar, vice president at GEP, discusses procurement transformation and what tomorrow’s challenge could look like.
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Transformation. Procurement has witnessed quite a bit in recent years.
Given the widespread adoption and acceleration of AI and data-driven processes over the past decade, change has been a necessity rather than a nice to have.
Evolution of AI transformation
Ashwin Kumar is not unfamiliar with change. Having worked at GEP since May 2008, he has had a front-row seat to the transformation and change procurement has overseen. Now Vice President, he tells us about the evolution of the procurement function and how the landscape is shifting to meet future market demands.
“I think the way we see the industry evolve over time is because we started with web 1.0, simple ERPs that were fragmented with no easy way to connect systems,” he tells us. “Data was all behind firewalls and it was very expensive to manage or mine data. Then we had a big technology breakthrough in cloud systems where the people who were managing the storage said they had a solution. You can just simply push data out of the cloud and what we saw was a lot of that control that the CIOs had on data architecture and the software systems and solutions was being given to different functions.
“A lot of that enrichment of data happened because of the cloud platform that enabled it. Back in 2010, we made the decision to move away from a SaaS platform because even then we believed the future was cloud and that’s where data is going to be which could mean a gold mine. Our CEO made a very conscious decision to basically stop a really good product that was working and move to the cloud platform.”
Ashwin Kumar, Vice President, GEP
The GEP difference
Today, a global leader in AI-driven procurement and supply chain transformation, GEP helps enterprises take the lead and, using the power of data and digital technology, to stay ahead in the connected global economy. More than 1,000 engineers have spent the last 7 months to design and launch GEP’s new AI-native, low-code platform for sustainable procurement and supply chains, GEP QUANTUM. This new platform, launched last week, powers GEP SMART, the industry’s leading source-to-pay procurement application, GEP NEXXE, its next gen supply chain solution, and GEP GREEN, enabling companies to track, measure and achieve their ESG goals.
With the transformative power of AI, GEP enables businesses to operate with greater efficiency and effectiveness, gain competitive advantage, boost profitability and maximise both business and shareholder value. GEP helps global enterprises across industries and verticals build high-performing, resilient and sustainable supply chains.
Investing in dedicated spend analytics and solutions has become an essential part of the procurement process. Data is king and ultimately the more companies know and can predict, the better off they’ll be. However, some companies are still lagging behind when it comes to adopting digital tools created for better visibility and transparency. Kumar questions the reason for this and points to the possibility that there could be a perception that digital tools were hype or a fad – but affirms spend visibility is the real deal.
“If you look at spend data, if I’m the business stakeholder, you’re coming and showing me things that happened six months before,” he tells us. “One of the things we actively tell customers is to understand that there is a difference between spend and cost. Spend is basically the last AP data that you get, which means it’s not even current.”
Procurement’s greatest time?
Given the disruptive nature of the past few years, procurement has had to stand up and be counted. For Kumar, he reflects on global challenges such as Covid, a war in Ukraine and inflation and its knock-on effect on procurement and the supply chain. He maintains that it’s a “difficult time” to be in the industry at the moment given the hurdles procurement and the wider world has faced head-on recently.
“We started off with Covid where we went and told suppliers, sorry, I don’t have money to spend so I’m going to stop spending,” he tells us. “Two months later, you tell them there’s a supply shock and since I’m your preferred customer, can you do something for me? Make sure my products are getting to me on time. Then six months later, there was a war in Ukraine where you were testing suppliers to see which side they were on and questioning whether or not to do business with them. After that, there were inflation concerns so things are constantly changing and you’re pivoting from one problem to another.
“It now means you need to have a platform ecosystem with multiple solution options so that there isn’t a single point of failure and avoid the need for a “transformation” every two years. Given the pace at which things are changing in the macro environment, those single points of failure are quickly going from lack of supply to resilience to risk to people to visibility. It could be something else tomorrow, it could be ESG tomorrow, we simply don’t know. I could have a really good risk assessment tool, but that might not be my focus six months from now – it could be something else. So resilience in the form of digital ecosystem housing different point solutions is paramount.”
CPOstrategy explores this issue’s big question and questions whether procurement is in need of a rebrand in order to get to the next level
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Does procurement need a rebrand?
Procurement’s transformation in recent years has been exponential.
As an industry which has embraced technology at scale, there is a greater clarity in spend, expanded category coverage and increased return to shareholders. But is there enough awareness about procurement and is it doing itself a disservice? Procurement professionals aren’t often known for being great marketers. But in today’s fast-paced world, being sure an audience can understand something quickly is essential. Without strong brand potential, procurement is risking not living up to its full potential.
For example, procurement’s brand is often left to customers to work out. To many, people think that procurement is solely about purchasing or negotiating contracts. However, they are often unaware just how innovative and exciting procurement can be. From some sections, procurement is still sometimes thought of as some back-office function tucked away out of sight. But now, particularly in the face of massive challenges over the past few years, procurement has become so much more.
Solving talent shortages
In a recent CPOstrategy Podcast, Shaz Khan, CEO of Vroozi, discussed how rebranding procurement could help solve its talent shortages. He believes the space must be more strategic than just finding themselves there one day. He told us how corporate procurement is currently in a “golden age” and that by making job roles more relatable it could encourage fresh perspectives to enter the industry on purpose instead of by accident. “When you say you work in procurement, try explaining that to your family or friends because it takes a while! In reality, we as human beings in our day-to-day lives are sourcing every single minute of every day,” he explained.
“We are sourcing where our dry cleaning is, we’re negotiating at the farmer’s market for carrots. When we look at corporate procurement, we need to ask ourselves, do we need to be rebranding this function? We need to get more individuals not just falling into procurement by accident and make it more measured and predictive.”
What’s holding procurement back?
Executives “falling” into procurement has long been a common joke shared among those in the industry. But in what other line of work does such a high proportion of the workforce accidentally stumble upon their chosen industry and end up staying? It is both a compliment and an achilles heel to procurement but ultimately that method leads to periods of talent shortages which is what the industry is experiencing today. Procurement’s talent problem is not just down to one thing, given how COVID-19 impacted the industry and people’s decision to opt for a career change in the post-pandemic world. In order to address the problem, it all starts with education.
“I certainly didn’t know that this was a profession when I was at university and I don’t think I’m alone in that,” explains Pauline Potter, Director of Procurement at Evri.
“It all seems crazy to me because I genuinely think this is such a fantastic career path that people can take. It’s hugely variable with loads of paths you can go down and you can apply a similar skillset to all kinds of businesses. I think the first thing procurement can do to address the talent shortage is raise the profile when recruiting.
Nicolas Walden, Associate Principal at The Hackett Group, agrees in the importance of rebranding procurement but also believes that a lack of education could be holding procurement back. “I was talking to a CPO recently and he was saying when he looks across Europe, there’s only a small number of universities that actually offer degree level qualifications in procurement or supply chain,” he says. “I know from colleagues in the United States that there’s many more universities there that offer this level of education. This can create the entry point of a pipeline of talent for the future. This means they’ve got the skills, mindset and the training in what we need in terms of modern procurement.”
Recruitment in procurement
Khan highlights the opportunity procurement has to redefine how it presents itself to the workforce of tomorrow. It is his belief that getting rid of the misconceptions surrounding procurement could hold the key. “Higher education and the lack of programmes going forward after graduating is a real problem,” he adds. “Corporate procurement can be an incredible entry level area because it centres around data. You’re leveraging cutting edge toolsets and are making an impact on the company – your job isn’t boring. It’s not pushing paper back and forth or getting on phone calls with suppliers to talk about delivery schedules.”
And procurement roles don’t just have to apply to ‘procurement people’. Global procurement executiveFadi El Mouallem affirms that people could add their valuable transferable skills from other industries and be successful within the space. “I like to attract talent from different industries, not just procurement or finance,” he discusses. “I’ve had the likes of project managers, salespeople and engineers come into procurement and they all made a career out of it.
Success is making them feel that they belong, so they can grow into this space and make an impact. If they choose to leave procurement later, then that’s fine.”
Procurement, like many industries, has been through a tough time. But as a sector very much at the forefront of technology innovation the future looks equally exciting and bright. By rebranding procurement, being open to people from all walks of life and empowering the talent of tomorrow to emphasise that this could be the place for them to thrive, it could bring positive change that will stand the test of time.
Global research and advisory giants Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
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Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
Under the terms of this strategic alliance, DPW LABS, the consulting arm of DPW, and Deloitte will work together to refine the boundaries of innovation in procurement.
From problem and strategy definition to proof of concept and deployment, through the DPW LABS innovation capabilities and digital ecosystem and Deloitte’s global transformation capabilities, the move allows for impact to be delivered at scale.
Deloitte is a global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
The firm, which is a member of the Big Four in professional services, currently has about 330,000 employees in more than 150 countries and territories.
Founded in 2019, DPW stands as a global leader in procurement innovation. DPW LABS empowers organisations to identify and seize collaborative innovation opportunities with DPW’s line-up of pioneering startups, scale-ups, and tech innovation experts.
Herman Knevel, co-founder and co-CEO at DPW, said: “We are excited about this strategic partnership with Deloitte.
“This partnership will enable us to join forces and make tech work, expand and complement our impact at global scale.”
Michiel Junge, partner of sourcing and procurement at Deloitte, added: “We are united in our mission to make procurement awesome.
“The partnership with DPW will enable our clients to tap into DPW’s capabilities and ecosystem and define their procurement future.”
The move comes after DPW welcomed over 1,250 procurement professionals to Amsterdam for its annual conference.
DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. It is one of the biggest and most influential tech events in procurement and supply chain.
CPOstrategy travels to the Netherlands to soak in the atmosphere of one of the world’s biggest and most influential tech events in procurement and supply chain – DPW Amsterdam 2023
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“You are the reason why DPW exists.
“It’s been my mission from day one to break procurement out of its silo and create what I call the end-to-end ecosystem and that is you.”
Digital Procurement World (DPW) Founder Matthias Gutzmann’s first address to the crowd gathered before the main stage had a clear tone of appreciation.
The rise of DPW Amsterdam
Today, DPW Amsterdam is one of the world’s biggest and most influential tech events in procurement and supply chain. Its exponential rise in a relatively short space of time is undeniable. Its story began with a frustrated Gutzmann having discovered a lack of procurement conferences to showcase his previous employer. This led to Gutzmann finding a gap in the market and set about solving the issue himself. He left his job in New York, moved into his parent’s house and invested all his savings to launch DPW. Months later, DPW’s launch conference in September 2019 welcomed 400 industry leaders while being praised from across procurement. Under the watch of Gutzmann and co-CEO Herman Knevel, DPW’s influence and pull has only grown since.
This year’s event was located at the historic former stock exchange building, the Beurs van Berlage. Built in 1896, the building breathes character and history. Its architecture and rich past, alongside its central Amsterdam location, showcases its sense of place and being.
Innovation
DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. This year, more than 1,250 procurement professionals gathered to connect, learn and innovate, while over 2,500 virtual attendees watched along at home. The buzz and hum of chatter was audible, the sense of excitement evident. And the attendees were certainly in for a treat. This year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. It was all centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results now instead of only concepts and theories.
Speakers across the two days included renowned experts and visionaries including the likes of Dr. Elouise Epstein, Partner at Kearney, Yossi Sheffi, Director of Massachusetts Institute of Technology and author David Rogers, among dozens more. Sarah Barnes-Humphrey led superb virtual coverage of the event and allowed those unable to make it to still feel a part of such an important conference in the procurement calendar. There were book signings from Sheffi and Atif Rafiq, eye-catching tech innovations showcased on stage and even an appearance from F1 legend and Haas Formula One team principal Guenther Steiner.
Digital future
To sum up, in comedian and host of DPW Amsterdam Andrew Moskos’ opening speech he reflected on procurement’s evolution and transformation. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk, and 80% of the spend of a company goes through us.”
Change is here and procurement holds the cards. Let’s Make Tech Work.
CPOstrategy examines 10 of the best ways to use artificial intelligence (AI) in procurement
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Artificial intelligence (AI) is one of the biggest buzzwords in procurement. Everyone wants to get their hands on it and introduce it into their strategies.
Particularly in procurement, AI is often talked about being the answer to all challenges. It can be used to overcome complex problems and deliver efficiency while also being introduced within software applications such as spend analysis, contract management and strategic sourcing.
In this article, we will list 10 of the best ways to use AI in procurement.
1. Machine learning spend classification
AI algorithms can help categorise, clean and classify data automatically. Machine learning spend classification helps detect patterns and uses them for prediction while allowing for better decision-making. Examples of spend classification techniques include supervised learning, unsupervised learning in vendor management and classification reinforcement learning.
2. Natural Language Processing (NLP)
National Language Processing (NLP) is the branch of artificial intelligence focused on understanding, interpreting and manipulating human language. It can be used to gain valuable data and information to streamline time-consuming processes. Information contained in legal documents can be interpreted through AI for the procurement of relevant data. It allows procurement professionals to get ahead and use an AI assist engine to receive alerts to proactively monitor progress. It also allows for compliance over the life of multiple agreements with the same or several vendors.
3. Robotic Process Automation (RPA)
Robotic Process Automation (RPA) mimics human actions to eradicate repetitive tasks. While not strictly AI in the traditional sense, RPA does provide procurement with opportunities to improve process efficiency and is part of the wider family of AI. It can assist with the likes of contract management, input identification as well as purchase request and order submission, among more benefits.
4. Anomaly detection
With AI being able to process vast amounts of data quickly, it is able to stay up to date on the latest developments and changes in the procurement space at speed. Automated notifications on things such as anomalies, new opportunities and recommended activities allows for immediate action to be taken and provide suggestions on what should be done instantly. Rapid detection will ensure risks are mitigated and resolved before they become problems.
5. Purchasing
AI can be utilised to automatically review and approve purchase orders. Chatbots can be used to check the status of acquisitions or automatically approve virtual card payments. AI can analyse data and assess the reliability and quality of suppliers based on predefined criteria. This helps the purchasing team select the best suppliers quickly and accurately.
6. Contract management
Contract management can benefit through using AI to create, store, review, index, retrieve, analyse, negotiate and approve agreements. A big benefit delivered by contract management solutions that use AI is standardised metadata reporting which eliminates the need for category managers and legal counsels to manually read contracts to gain insights into the commercial part of their supplier relationships.
7. Supplier risk management
Supplier risk management is an important part of the procurement process and is around understanding what happens if a supplier fails to meet its obligations. To combat this, AI can be used to monitor and work out potential risk position through Big Data. Millions of different data sources are screened in order to provide alerts on potential risks within the supply chain.
8. Accounts payable automation
AI can automate most manual tasks in accounting such as data entry and invoice routing. Using AI for this substantially reduces procure-to-pay cycles, minimises the need for humans to get involved and integrates multiple workflows into a seamless process.
9. Strategic sourcing
Using AI in strategic sourcing is a key tool in a procurement practitioner’s arsenal. AI can be used to manage and automate sourcing events while also leveraging machine learning for the recognition of bid sheets, as well as specialised category-specific e-sourcing bots such as raw materials and maintenance.
10. Automated compliance
AI can also be used as a valuable tool for compliance officers to help work out potential risks, monitor employee behaviour, generate reports, provide recommendations as well as educating employees about the importance of compliance. For organisations without a source-to-pay system, compliance is a useful alternative and allows procurement teams to seamlessly compare payment terms, identify duplications as well as determine non-compliance.
Cybersecurity leader Shinesa Cambric on Microsoft’s innovation journey to identify, detect, protect, and respond to emerging threats against identity and access
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This month’s cover story highlights a cybersecurity program protecting billions of users.
Welcome to the latest issueof Interface magazine!
Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.
Shinesa Cambric is on a mission to drive innovation for cybersecurity at Microsoft. Moreover, by embracing diversity and opening all channels towards collaboration her team tackles anti-abuse and delivers fraud-defence. Continuous Improvement doesn’t just play into her role, it defines it…
“In the fraud and abuse space, attackers are constantly trying to identify ways to look like a legitimate user,” warns Shinesa. “And this means my team, and our partners, have to continuously adapt. We identify new patterns and behaviours to detect fraudsters. At the same time, we must do it in such a way we don’t impact our truly ‘good’ and legitimate users. Microsoft is a global consumer business and any time you add friction or an unpleasant experience for a consumer, you risk losing them, their business and potentially their trust. My team’s work sits on the very edge of the account sign up and sign in process. We are essentially the first touch within the customer funnel for Microsoft – a multi-billion dollar company.”
ABB: Digital Technolgies contributing towards Net Zero
Nigel Greatorex, Global Industry Manager for Carbon Capture and Storage (CCS) at ABB Energy Industries, explains how digital technologies can play a critical role in the transition to a low carbon world. He highlights the role of CCS in enabling global emissions reductions and how challenges can be overcome through digitalisation…
“It is widely recognised decarbonisation is essential to achieving net zero emissions by 2050. Therefore, it’s not surprising that emerging decarbonisation technology is becoming an increasingly important, and rapidly growing market.”
CSI: How can your IT estate improve its sustainability?
Andy Dunn, Chief Revenue Officer at IT solutions specialist CSI, reveals how digital technologies can contribute to ESG obligations: “Sustainability is a now seen as a strategic business imperative, so much so that 74% of companies consider Environmental, Social and Governance (ESG) factors to be very important to the value of their company. Additionally, we know almost three in four organisations have set a net zero goal. With an average target date of 2044, 50% of organisations are seeking more energy efficient products and services.”
https://www.youtube.com/watch?v=tsDaZiSO1ho
“Optimising energy use and consolidating servers and storage infrastructure form a strong basis for shaping a more environmentally friendly and efficient IT estate. It no longer needs to be the Achilles Heel of an ESG policy. “
Mia Platform: Sustainable Cloud Computing
Davide Bianchi, Senior Technical Lead at Mia Platform, explores the silver lining of sustainable cloud computing. He reveals how it can help us reduce our digital carbon thumbprint with collaboration, efficient use of applications, containerisation of apps, microservices and green partnerships.
“We’re already on an important technological path toward ubiquitous cloud computing. Correspondingly, this brings incredible long-term benefits too. These include greater scalability, improved data storage, and quicker application deployment, to name a few.”
Also in this issue, we hear from Doug Laney, Innovation Fellow at West Monroe and author of Infonomics and Data Juice. Also, we learn how companies can measure, manage and monetise to realise the potential of their data. And, Deputy CIO Melvin Brown discusses the people-centric approach to IT supporting America’s civil service at The Office of Personnel Management (OPM).
Doug Laney is Innovation Fellow at West Monroe and a leading Data & Analytics strategist. We caught up with the author of Infonomics and Data Juice to talk tech and how companies can measure, manage and monetise to realise the potential of their data
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Our cover story explores the rise of data and information as an asset.
Welcome to the latest issueof Interface magazine!
Interface showcases leadersaiming to take advantage of data, particularly in a new world of AI technologies where it is the fuel…
How to monetise, manage and measure data as an asset
Our cover star is pretty big in the world of analytics… We meet the guy who defined Big Data. Doug Laney is Innovation Fellow at West Monroe and a leading Data & Analytics strategist. We caught up with the author of Infonomics and Data Juice to talk tech and learn how companies can measure, manage and monetise to realise the potential of their information. In his first book Laney advised companies to stop being fixated on hindsight-oriented analytics. “It doesn’t actually move the needle on the business. In the stories I’ve compiled over the last decade, 98% have more to do with organisations using data to diagnose, predict, prescribe or automate something. It’s not about asking questions about what happened in the past.”
Canvas Worldwide: A data-driven media business
Continuing this month’s data theme, we also spoke with Alisa Ben, SVP, Head of Analytics at full-service media agency Canvas Worldwide. Data has transformed the organisation, and what its clients do. “We look holistically at the client’s business and sometimes the tools we have might be right for them, sometimes not. It’s more about helping our clients achieve their business outcomes.”
TUI Musement: from digital transformation to digital pioneer
At travel giant TUI, handling data effectively is paramount when communicating consistently and meaningfully with up to 25 million customers annually. David Garcia, CIO for TUI Musement, talks about the tech evolution driving the travel giant’s provision of experiences, transfers and tours. It’s a big part of its operational shift from local to global. “As a CIO, I’ve always been interested in how the tech innovations we drive can support the business and add value.”
Hiscox: making cybersecurity more accessible
Liz Banbury, CISO at Hiscox and president of (ISC)² London Chapter, talks to us about how cybersecurity can become a more accessible, realistic career path for almost anybody. “When I was at school, topics like computer science didn’t even exist,” Banbury explains. “In one of my first jobs, over in Hong Kong, we were still using a typewriter! A lot has changed. My key point here is that there’s a lot of cybersecurity professionals who are really good at their job. They are inspiring, and have come from all walks of life. Crucially, they don’t have a maths, computer science, or technological background at all. But they still make great cybersecurity professionals.
Portland Community College: Risk vs Speed in Cybersecurity
Reet Kaur, former Chief Information Security Officer at Portland Community College, discusses the organisation’s transition to the cloud amid a digital transformation journey. “I don’t want to work with people who just say yes all the time. I want my ideas challenged to help forge the excellence in the security programmes I help build.”
DBHDS: Cybersecurity in healthcare
The Virginia Department of Behavioral Health and Developmental Services (DBHDS) exists to create ‘a life of possibilities for all Virginians’ and transform behavioural health. Its focus is on supporting people across the entire commonwealth. It helps them get the support they need in order to take wellness and recovery into their own hands. In an area like healthcare, sensitive information is all over the place, meaning cybersecurity is a priority – and this is where Glendon Schmitz, CISO at DBHDS, comes in. “The security team exists to help the wider organisation achieve its objectives with data. We’re there to protect the business, not the other way around.”
Also in this issue, we schedule the can’t miss tech events and get the lowdown on IoT security from the Mobile Ecosystem Forum.
Pauline Potter, Director of Procurement at Evri, discusses her firm’s drive to delivering sustainability and offering best-in-class solutions.
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Today, Evri stands as the UK’s biggest dedicated parcel delivery firm and is armed with more than 18,000 couriers.
It has over 8,500 local one-stop ParcelShops and lockers and a growing network of best-in-class hubs and depots. Founded in 1974, Evri has undergone significant transformation over the years, most recently a successful rebrand with Hermes UK in March 2022. And overseeing the company’s procurement function is Pauline Potter. A Cornell University graduate in the US, Potter trained as an engineer before moving into consulting at KPMG and Efficio.
Indeed, setting the standard in procurement isn’t easy. It takes hard work, dedication and a drive to consistently deliver and meet customer demands, particularly in today’s world. However, to companies like Evri, they take challenges in their stride.
In our recent CPOstrategy Podcast, Pauline Potter, Director of Procurement at Evri, discusses her firm’s driving sustainability while at the same time delivering best-in-class solutions while maintaining its position as the UK’s biggest dedicated parcel delivery company.
This month’s cover story sees us speak with Brad Veech, Head of Technology Procurement at Discover Financial Services.
Having been a leader in procurement for more than 25 years, he has been responsible for over $2 billion in spend every year, negotiating software deals ranging from $75 to over $1.5 billion on a single deal. Don’t miss his exclusive insights where he tells us all about the vital importance of expertly procuring software and highlights the hidden pitfalls associated.
“A lot of companies don’t have the resources to have technology procurement experts on staff,” Brad tells us. “I think as time goes on people and companies will realise that the technology portfolio and the spend in that portfolio is increasing so rapidly they have to find a way to manage it. Find a project that doesn’t have software in it. Everything has software embedded within it, so you’re going to have to have procurement experts that understand the unique contracts and negotiation tactics of technology.”
There are also features which include insights from the likes of Jake Kiernan, Manager at KPMG, Ashifa Jumani, Director of Procurement at TELUS and Shaz Khan, CEO and Co-Founder at Vroozi.
This month’s exclusive cover story features a fascinating insight into the procurement function at lighting giant, Signify.
A forward-thinking enterprise constantly reevaluating and adapting its operations against an ever-changing landscape, Signify has recently transformed its procurement function. And so we join Luc Broussaud, Global Head of Procurement/CPO and Arnold Chatelain, Transformation Program Director for Signify’s Procurement Organization to see why, and how, they have evolved procurement at the company.
Signify is a global organisation spread over all continents and Luc heads up the procurement function. According to Luc, he and his team no longer engage in traditional transactional procurement, but instead leverage digitalisation to deliver competitive prices as well as what they call ‘concept saving’, “Which is how we redesign or improve our product; leveraging the knowledge of our suppliers to make it cheaper, more efficient, easier to manufacture and install, and more sustainable for the planet.”
Luc joined Signify in 2018, after being the CPO of Nokia (based in Shanghai) and has always been working within procurement. He joined Signify with a broad skillset and a wealth of experience. “I joined because the people I talked to, from the COO to the CEO and CFO were all incredibly knowledgeable and passionate about procurement,” he reveals. Read the full story here!
Not only that, but we also have some incredible insights from procurement leaders at Heijmans, Datadog, HICX, DPW, ProcureCon Asia and SourcingHaus Research! Plus, the very best procurement events of 2023.
We look into the need for a supply chain reset amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives.
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Today’s supply chains are under pressure like never before.
Amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives, the modern supply chain is having to think twice about the way it operates. It means companies are rethinking their supply chain strategy as well as the materials they source and the suppliers they work with. But such significant change doesn’t come easy and isn’t necessarily cheap either. Indeed, these factors have led to the necessity of a great supply chain reset. But this is no easy fix. It impacts the entire business model, from strategy, marketing and design all the way through packaging, storage and transportation.
Supply Chain Revolution
The first part of a supply chain overhaul is rationalising the portfolio. A major review of the product portfolio could reveal what is profitable to make or sell. In many industries, the combined effect of the rising cost of products, logistics, carbon charges for border crossings and frequent supply disruptions is increasing the cost-to-serve, reducing gross margins and making it unprofitable to hold inventory as a buffer.
Leading companies look for ways to improve communications among the supply chain, leadership, sales, and other commercial teams so that supply chain leaders clearly understand the trade-offs required to win in the market. The most successful companies are also involving other key stakeholders in the supply chain balance equation discussion, including finance, R&D, regulatory, sustainability, and procurement. This ensures everyone understands all the implications of the proposed overhaul, particularly what can actually happen.
COVID-19 disruptions pushed companies to reorient their supply chains around resilience. According to Bain & Company, management at one global apparel firm recognised early on that this would require a transformation that would have ripple effects across other parts of the business. In order to make the correct decision, it pulled together a cross-functional strategy team that included the heads of supply chain, finance, sustainability, consumer insights, and the product’s business unit. The team saw the supply chain redesign as an opening to not only boost resilience but also responsiveness and sustainability. It found reducing reliance on any one location would provide insulation from supply disruptions, and making its products closer to customers would speed up delivery and shrink the supply chain’s carbon footprint.
Design to delivery and beyond
Taking a detailed view of the entire product journey, from design to delivery and beyond, can also help to simplify sourcing, by standardising as many elements as possible, reducing the range and specification of materials used for production and packaging. This means fewer suppliers and components, which lowers the exposure to disruption. Companies should investigate whether it’s possible to use less material and/or more recycled content, and whether this can reduce total cost of manufacture.
Today, chief supply chain officers balance multiple conflicting needs of cost, service, sustainability, agility and resilience. As a result of increasingly international trade complexity and the need to manage a widening range of risks, it’s difficult to determine where products should be manufactured and sold. While the onshoring versus offshoring versus friendshoring debate remains, it is further complicated by issues such as sustainability, trade wars, agility and, increasingly, visibility.
In the era of mass offshoring, manufacturers have enjoyed the huge scale efficiencies of large manufacturing centres in low-wage countries. For a wide range of products, there is a now a considerable and visible shift to get closer to the end customer, to ensure a faster response to changing consumer demands, while avoiding tariffs, cutting logistics costs and reducing carbon footprint.
Looking ahead, supply chain has little choice. It can’t stand still and wait for the next black swan event to unfold – companies must be more resilient and fluid. A great supply chain reset may not just be a “nice to have” anymore.
We explore the transformation of sustainability in procurement & visions of a future where sustainability & procurement are fully integrated.
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Dr Carsten Hansen, Founder of SourcingHaus Research and Consulting Group, explores the transformation of sustainability in procurement and envisions a future where sustainability and procurement are fully integrated and mainstreamed.
Mike Randall, CEO at Simply Asset Finance, discusses how to build a people-first strategy that enables growth.
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As the UK economy continues to balance on the edge of a recession, employee retention is quickly being pushed to the top of CEOs’ lists. Over the past couple of years, the job market has shifted dramatically with previously unheard terms such as ‘the great resignation’, ‘quiet quitting’ and ‘hybrid working’ becoming commonplace. People are rightly prioritising their working situation and job satisfaction levels, questioning whether they believe in the organisations they are committing so much time to.
Consequently, there has been a power dynamic shift in favour of the workforce. Reportedly in the third quarter of 2022 businesses witnessed over 365,000 job-to-job resignations across the UK. In similar fashion, the phenomenon of ‘quiet quitting’ – doing the bare minimum required of a job – has become a growing concern but its rise is prompted by a growing number of employees feeling disengaged in their roles.
Against this backdrop of a highly turbulent job market, and increasingly difficult macro-economic pressures, it’s vital for CEOs to prioritise a people-first strategy to ensure healthy growth for their business in 2023. Data from Deloitte has even revealed that experts believe how engaged a workforce feels can directly correlate to overall business output, with 93% of HR and business leaders in agreement that building a sense of belonging is crucial for organisational performance.
Mike Randall, CEO at Simply Asset Finance
However, creating the right environment and recruiting, maintaining and nurturing the right talent to ensure a people first approach can be daunting. With this in mind, here are four learnings CEOs might want to consider when approaching this challenge:
1. Define your beliefs
Before CEOs and founders can hope to attract the right talent, it is critical to first distil and translate the business vision into something that can be understood by employees. Put simply, this means defining the business’ beliefs.
Some business leaders may already refer to this as an ‘employer brand’, and it can be key to not only securing better talent, but also saving a business money in the long-term. Data from LinkedIn for example, recently found that a strong employer brand can help to reduce employee turnover by as much as 28% and cost-per-hire by 50%. Defining these beliefs – or the tenets a business does and doesn’t stand for – is therefore the perfect exercise to put a vision onto paper, and clearly communicate it to its prospective talent.
2. Build a solid culture
Once these beliefs have been defined, they must be reflected, and built into a strong culture. A business’ beliefs should permeate through the whole organisation – from customer communications, to how staff are treated, to how leaders run the business. Culture should essentially be a representation of a business’ beliefs being put into practice.
Building a strong culture in a business, however, is not solely about these beliefs but also extends into how employees are equipped with the tools they need to succeed. Companies that invest in learning and development for example, have been found to benefit from a 24% higher profit margin than those that don’t, according to the Association of Talent Development. Training and development should therefore be seen as a worthwhile and necessary investment that can solidify your culture and ensure profitability, not just an unavoidable cost.
3. Invest in retention
With research from Oxford Economics estimating the average turnover per employee earning £25,000 a year to be £30,000 plus, there is an evident cost to businesses that fail to invest in retention. Tackling this will mean regularly taking the time to truly understand what makes employees tick – and more specifically, understanding their motivations, attitudes, behaviours, strengths and weaknesses.
As the past few years have evidenced, individuals are no longer deciding where they work solely based on salary, but are also thinking about employer values, flexibility, and benefits. To avoid employee churn, businesses should regularly take time to understand what drives their employees and implement retention strategies to address these drivers. Gathering and analysing employee data will play an important role here over the coming years, and should be built into a long-term strategy to optimise employee satisfaction.
4. Build for the future
A common challenge encountered by modern businesses and startups wanting to take a people first approach, can be their ability to stay committed to it. As a business grows in size and becomes successful, it can be all too easy to let external factors dictate its purpose and for it to lose sight of what it initially stood for. The reality is that when this happens, a business is in its most vulnerable state – as its beliefs become increasingly distant, and worse, employees no longer understand what it stands for.
When creating a people-first strategy its therefore important to think long-term. If there are external factors that will potentially put this strategy at risk in future, it’s crucial to identify them, and put in practical steps to mitigate them where possible. The pandemic, for example, is a prime example of an external factor that interrupted the status quo of many businesses – disrupting employees, customers and operations in general. While they can be unpredictable in nature, having a plan to get through these times can help to get you back on track and reassure talent that a solution is in place.
In this economic climate, defining beliefs, building a solid culture, and retention plan should be at the core of every business’ strategy. It’s only when these things are in place that a business can hope to attract and retain talented people that exude the same passion and values built into the heart of a business. As while a business’ growth may be defined by its leaders, it is delivered by its people who are putting that vision into practice.
Welcome to the launch issue of CEOstrategy where we highlight the challenges and opportunities that come with ‘the’ leadership role
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Our first cover story explores how Vodafone is leveraging strong leadership to drive the collaborations enabling businesses to champion change management and better use technology.
Welcome to the launch issue of CEOstrategy!
Tasked with accelerating business growth, while building the synergies across an organisation that can drive innovation to meet diverse customer needs and keep revenues on track, the modern CEO must be mentor, marshall and motivator on the journey to success.
“Leadership is purpose, it’s why do you do the things you do…”
Our cover story throws the spotlight on Vodafone US CEO David Joosten; also Director for Americas & Partners Markets at Vodafone Business, he talks to CEOstrategy about leading from the front and setting the standards to deliver growth while keeping employees and customers happy.
“People follow leaders that are honest about themselves. If you can reflect on what you’ve done well, but also where you need to improve it can inspire others to do the same.”
EMCS Industries Ltd: How a CEO can navigate change management
“Why hire talent and then tell them what do? You have so much to learn from the great people you hire. Micromanaging is not management, and it’s certainly not leadership. Let your people thrive!”
Read our interview with EMCS Industries Ltd CEO Trevor Tasker for more thought-provoking insights on leadership from the shifting tides of the marine industry in this maiden issue.
How to be an authentic leader
“At the most basic human level, everyone knows what it’s like to feel heard by another person, and how that changes our behaviour. It can help anger and sadness subside and enable us to start seeing things differently. So, when employees are being listened to by their leaders, it can only help how an organisation operates.”
Dr Andrew White, director of the Advanced Management and Leadership Programme at the University of Oxford’s Saïd Business School and host of the Leadership 2050 podcast series, explores transformative approaches to leadership for the modern CEO.
How can CEOs drive forward culture change around diversity and inclusion?
Diane Lightfoot, CEO of Business Disability Forum, explores the changing the narrative around diversity and inclusion in the workplace.
“Disability is still often parked in the “too difficult” box when it comes to Diversity, Equity and Inclusion. Employers are often afraid of doing or saying the wrong thing and as a result, do or say nothing. As a CEO, the stakes feel (and often are) higher. That high profile platform can feel daunting at the best of times; when tackling an unfamiliar topic, it can feel positively overwhelming. But what we do and say as senior leaders has a huge impact. Indeed, it is critical in driving change.”
https://www.youtube.com/watch?v=g-TRCm1dv6o
Also in this launch issue, we get the lowdown on agile ways of working from Kubair Shirazee, CEO of Agile transformation specialists Agilitea. Elsewhere, we speak with Nirav Patel, CEO of the consultancy firm, Bristlecone – a subsidiary of Mahindra Group and a leading provider of AI powered application transformation services for the connected supply chain – who discusses the challenges facing CPOs and supply chain leaders in our uncertain times. And we analyse the latest insights for CEOs from McKinsey and Gartner.
Standard Bank CIO Bessy Mahopo on the challenges of operating in a fractured market and how the company overcomes them
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This month’s cover story highlights how technology is helping Standard Bank overcome the challenges of a fractured market to both drive business growth and improve services for customers.
Welcome to the latest issueof Interface magazine!
“Time may change me, but I can’t trace time…” sang David Bowie. Changes can be challenging to manage with the path to positive disruption not always a smooth change management journey.
Interface dives deep for insights on understanding, planning, implementing and communicating change across industries.
Standard Bank CIO (CIB – Transactional Banking) Bessy Mahopo explains how one of South Africa’s largest banks is using its own digital transformation successes as a template to support the country’s ongoing technological evolution by overhauling IT from the inside out. “I believe that once we start moving the curve to fifth and sixth generation technology, we’re going to become even more of a value-producer.”
The art of change management with SAP
Maria Villar, Head of Enterprise Data Strategy and Transformation at SAP, talks about the importance of driving change in the technology space and helping businesses thrive with data from the perspective of one of the world’s leading enterprise resource planning software vendors. “My job is about finding out what a good data strategy looks like and continuing to spend time with customers to look ahead…”
Talent transformation journeys with TUI
We caught up with Cerstin Lang, Director for HR Group IT at TUI. She reveals how it’s global For:ward program is driving digital transformation as the travel giant works with training partner Udacity to upskill IT talent. “Our IT goals are focused on developing a structure that supports new ways of working with the right balance to innovate and grow in the future.”
How TransUnion is enabling consumer trust
Alejandro Reskala, CIO Canada, LATAM, Caribbean at TransUnion, about technology transformation at a leading consumer credit reporting agency, its dedication to people, and how it makes trust possible. “TransUnion has always blazed a trail to use technology and data to generate insights that help support financial inclusion.”
Also in this issue, we ask what the birth of ChatGPT means for businesses leveraging tech and learn from Rivery why organisations need to rethink their data strategy with robust operational analytics.
Mark Weil, CEO at TMF Group, discusses the rise of staff attrition in the industry
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At the start of 2023 many companies are still struggling to find employees. The job market favours the applicant far more than before Covid-19 across many sectors. Higher interest rates and lower economic growth so far haven’t reduced the pressure on labour availability.
High staff turnover isn’t just a matter of the cost it creates. The disruption from running with a lot of open roles and with less experienced staff can disrupt client service, increase error rates and lead to more serious compliance and reputation damage.
Mark Weil, CEO at TMF Group
Examining the data
A lot of commentary on the situation has been based on surveys of employees’ intentions rather than their actual decisions. By managing our clients’ financial, legal and employee administration we have access to large volumes of data. This provides insight on the overall recruitment and resignation levels across workforces, from several hundred thousand employees, covering a broad range of sectors and job levels in more than 90 countries.
As a starting point, the data tells us that there was indeed a significant global increase in staff resignation during and after the pandemic. Across the 90 countries, average company staff attrition rose from around 15% annually in mid-2020 to 25% at the end of 2021. That’s a dramatic 67% increase in just 18 months.
Global annualised employee attrition trend
Digging deeper reveals a much more nuanced picture by company and country. In 2021, staff attrition averaged around 20% across the 90 countries but was below 10% in a small number, with Argentina the lowest at 6%. Of those above 20%, India, the UK and Poland topped the list with a rate of 26%. Both India and Poland are now major destinations for companies establishing regional service centres – locations that are supposed to be low cost, stable hubs that support many other countries. So rising staff turnover there will be particularly painful.
2021 average employee attrition by country
When examining the data at company level, annual attrition levels vary even more widely, from a low of around 5% to a high of 40%. Some of that will be a result of challenges in specific industries and companies. Some will arise from the underlying attrition in the labour market of the countries they operate in. To disentangle how much is company versus country, we compare in the chart below the attrition a firm is seeing with the average attrition it should be seeing given the mix of countries where it operates. The wide spread in the data shows that that country averages matter far less than individual company factors. For example, looking at companies whose country mix should give them expected attrition of around 15-20%, we see many at 30%-40% and others at just 5%-10% attrition.
Company actual 2021 attrition versus average for the countries where they operate
Staff attrition is a problem at any time, but becomes a significant threat to a business if it gets too high. How high is a matter of judgement and depends on the particular company. In professional services, for example, when staff attrition is above 20% it starts to impact client service and above 30% it can pose a risk to regulatory and reputational integrity.
The rise in global staff attrition, coupled with big spikes by country and company means that multinational firms will have an increased number of locations where attrition is high and potentially well beyond manageable levels. From 2020 to 2021 the number of employees in company locations experiencing more than 20% attrition nearly doubled, from around 15% to 27%. Looking at where the levels were highest, employees in countries experiencing more than 35% attrition rose from 1% to 7%. That means there’s an increasing number of hotspots, where extremely high staff attrition means companies need to intervene quickly to avoid staff resignations spiralling due to increased workload.
Factoring in country complexity
An important additional factor is the complexity of a particular country to operate in. Many countries have onerous business rules which are enforced vigorously. High staff turnover in complex countries is particularly dangerous because of the added risk of compliance breaches.
We can look at country complexity using TMF Group’s Global Business Complexity Index. It ranks countries annually based on 292 criteria, covering the fiscal, legal and employment environments for doing business in each location.
Procurement is in a state of flux. Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires…
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Procurement is in a state of flux.
Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires agility to navigate turbulent waters. But, despite significant disruption could there still be opportunity?
Simon Whatson, Vice President of Efficio Consulting, is optimistic about the future of digital procurement and despite a challenging few years he is confident of a successful bounce back. He gives us the lowdown on the direction of travel for digital procurement in 2023.
As an executive with considerable experience in the space, we’d love to learn more about your background and how you ended up in procurement. Why was this the specialism for you and how did you get involved to begin with?
Simon Whatson (SW): “I think the one-word answer of how I came into procurement was accidental. I studied maths at university, with a year in France, before I began looking for different roles to apply for.
“Eventually, I was offered a position with a big plumbing and heating merchant with global operations. I worked in that supply chain team for two and a half years. Although it was called supply chain, a lot of the work was procurement, which involved negotiating with suppliers. It was after that stint there, that I discovered consulting and joined a boutique procurement consultancy. Now I am onto my third consultancy and I’m very happy here!
“In terms of why I’ve stayed, one of the success factors in procurement is being able to work cross-functionally. Procurement doesn’t own any of the spending that it is responsible for helping to optimise. It must work with other functions and the spend owners. I quite like the people side of that, building relationships, almost selling internally to bring teams together. That really appeals to me and is a key reason why I’ve been very happy in procurement.”
As we move into exploring procurement today in 2023. The space is filled with challenges and complexities. You only need to look at the last few years. Covid, war in Ukraine, inflation – how would you describe the world’s recent challenges and their effect on the industry and what do you feel CPOs and leaders can do to combat these issues?
SW: “I would flip it around and say that these are not so much challenges but rather opportunities for procurement. When I started my career 18 years ago, procurement was often fighting to get a voice and there were complaints that procurement was not represented at the top table, but the war in Ukraine, inflation, COVID and ESG, these are things which are now on the C-suite agenda and procurement is ideally positioned to help companies face those challenges. If you think about COVID and the war in Ukraine, procurement is in a privileged position to help with this.
“I see some procurement functions that prefer to do what they know, which focuses on the process and transactional side. However, there are also many forward-thinking CPOs and procurement professionals out there, that have really seized this opportunity of being on the C-suite agenda and drive the thinking and the solutions to some of these big challenges we’re seeing.”
Although new technology in procurement has been around for well over a decade, digitalisation has become so much more of an important topic. How would you sum up where procurement and supply chain are in terms of digital transformation today?
SW: “It’s a bit laggard, but digital transformation is difficult, and we have to recognise there are some real trailblazers. There are some firms doing some fantastic things in digital to produce better outcomes. If you contrast your experience when you’re buying something in your private life, it’s much easier than 20 years ago. You can get access to a wealth of pre-sourced things, whether it’s food, a holiday, a car, or a book. You can see reviews of what other people think of these things.
“But when you go into your workplace as a business user and you want to buy something, it doesn’t quite work like that yet. You often have to fill in a form, send it off and wait for them to come back to you. They might come back a little bit later than you were hoping and might tell you that they don’t have that part on the supply frameworks. I think people sometimes get confused about how it can be so easy to buy something as large as a car or a holiday on their sofa at home, but when they want to buy something at work, it seems to be quite cumbersome. Digital can help a lot with that, but it is incumbent on organisations and procurement functions to figure out how to recreate that customer experience that we’ve become accustomed to in our private lives.”
With a new generation of leaders growing up with technology, some might say that it could be a key driver in helping to speed the adoption in procurement along. Is this something you would agree with or what would you point to as a key driver?
SW: “I do think that it will act as one of the catalysts for further digital transformation in organisations, because if procurement doesn’t manage to recreate that customer experience that the new generation expects, then they won’t use procurement going forward and will look to bypass it.
“The analogy that I’ve used previously in this case is one of travel agents. I remember as a child, my parents were able to take us on holiday and I remember the whole process. We would walk into town to the travel agent, and look at some of the brochures of options. They often then had to phone the various airlines or resorts on our behalf. They might not be able to get through, so we’d have to come back the next day. I remember as a child being quite excited by the whole process but actually, thinking back, it was quite cumbersome. You compare that to now, with being able to review online, and you can get instant answers to your questions. It’s not a coincidence that travel agents don’t really exist anymore.”
How much of a challenge is it to not get caught leveraging technology for technologies sake? How important is it to stay true to your approach and be strategic?
SW: “We conducted a study of many procurement leaders and CPOs a few years ago, and one of the things that we found was that about 50% of procurement leaders admitted to having bought technology just on the basis of a fear of missing out, without any real understanding of the benefits that technology was going to bring. That was a real shock and a revealing find because technology is not cheap, and its implementation is quite disruptive. If you’re purchasing a system because everybody else is using it, then there could be some pretty costly mistakes. It is really important to make sure that when buying technology, it is because the benefits are fully understood.
“My advice to companies when looking to digitalise is own your data, visualise that data, and manage your knowledge. If you can focus on getting those things right in that order, and make your technology decisions to support that goal, then that’s a much better way of thinking about it rather than just jumping in and buying a piece of technology.”
It’s clear that the procurement space is an exciting, but challenging, place to be. What do you think will play a key role in the next 12 months to push the digital conversation further to take procurement to the next level?
SW: “Looking forward, one thing that procurement needs to do and continue to do is attract the best people. Ultimately, people are what makes an organisation, and it is what makes a function successful. I think procurement has often not looked for the right skills in the people that it employs. Traditionally, it’s looked for people with procurement experience and while they are valuable and required, we also need leadership potential. People who think a bit more outside the box and aren’t so process driven. A lot of what procurement has done in previous years has been process driven, so if you’re just limiting your search of people to those that have had procurement experience, you’re inevitably going to end up with a lot of people who are process driven.
“I think being bolder and recruiting people from different backgrounds with different skill sets is the way to go. If procurement can ‘own’ the ESG space, that will help with the younger generation see procurement make a difference. I think that’s one thing that will be key to success going forward.”
Check out the latest issue of CPOstrategy Magazine here.
Paul Farrow, Vice President of Hilton Hotels’ Supply Management, sits down with us to discuss how his organisation’s procurement function has evolved amid disruption on a global scale
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The hospitality industry has endured a rough ride over the past few years.
Following the COVID-19 pandemic which stopped the world in its tracks and now with millions facing a cost-of-living crisis, it’s been a period of unprecedented disruption for those involved in the space and beyond.
But it’s a challenge met head-on by Paul Farrow, Vice President of Supply Management at Hilton Hotels, and his team who have been forced to respond as the world continues to shift before their eyes.
Farrow gives us a closer look into the inner workings of his firm’s procurement function and how he has led the charge during his time with Hilton Hotels.
Could we start with you introducing yourself and talking a little about your role at Hilton Hotels?
Paul Farrow (PF): “I’m the Vice President of Hilton’s Supply Management, or HSM as we call it. I’ve been with Hilton Hotels for 12 and a half years, and my role is to head the supply chain function for our hotels across Europe, the Middle East and Africa.
“Over the past few years, Hilton has grown rapidly and has now got 7,000 hotels in over 125 countries globally. What is really exciting is Hilton Supply Management doesn’t just supply Hilton Hotels and the Hilton Engine because we also now supply our franchisees and competitive flags. While we have 7,000 hotels globally, Hilton Supply Management actually supplies close to 13,000 hotels. That’s an interesting business development for us, and a profit earner too.”
You’re greatly experienced, I bet you’ve seen supply chain management and procurement change a lot in recent years?
PF: “The past two to three years have been tremendously challenging on so many industries but I’d argue that hospitality got hit more than most as a result of the Covid pandemic. Here at Hilton, supply management was really important just to keep the business operational throughout that tough time, but I’m delighted to say we’re fully recovered now.
“Looking back, it was undoubtedly difficult, and you only have to look at the media to see that we’re now going through a period of truly unprecedented inflation. On top of the normal day job, it’s certainly been a very busy time.”
Hospitality must have been under an awful lot of pressure during the pandemic…
PF: “Most of our teams as a business and all functions have worked together far more collaboratively than ever before through the use of technology and things like Microsoft Teams and Zoom. Trying to work remotely as effectively as possible changed the way we all had to think and the way we had to do. Now we’re back in the workplace and in our offices, we’re actually looking to take advantage of that new approach.”
Inflation, rising costs, energy shortages, as well as drives towards a circular economy means it’s quite a challenging time for CSCOs and CPOs right now, isn’t it?
PF: “Those headwinds have caused and created challenges of the like that we’ve not seen before. The war in Ukraine and Russia has meant significant supply chain disruption and supply shortages of some key ingredients and raw materials. China is a significant source of materials and they’re still having real challenges to get their production to keep up with demand.
“All the local and short-term challenges are around energy and fuel pricing, so throughout the supply chain that’s been a major factor to what we’ve had to deal with. On top of that is the labour shortages. We rely heavily throughout the supply chain and within our business to utilise labour from around the world. In my region, particularly from say Eastern Europe as well as other businesses all fighting for a smaller labour pool than we had before. We are fighting with the likes of the supermarkets, Amazon’s, not just other hotel companies to capture the labour pool we need both in our properties but also within our supply chain supplies themselves.
Hilton operates a rather unique procurement function, doesn’t it?
PF: “We trade off the Hilton name because our brand strength is something that we are able to utilise and we’re very proud of, but we’ve also got additional leverage by having that group procurement model.
“We’ve got essentially two clients. We’ve got our managed estate which is when an owner chooses to partner with Hilton, they’re signing a management agreement because they want the benefit and value of the Hilton engine. That could be revenue management, how we manage onboarding clients and customers through advertising, as well as the other support we give in terms of finance, HR, marketing and sales as well as procurement.”
HSM is a profit centre and revenue driver through its group procurement model but how does this work?
PF: “Our secret sauce is our culture. It’s our people and that filters across all of our team members and indeed all of our functions. The key strategic pillars are the same for health and supply management around culture, maximising performance and so on as they are across the overall global business.
“Across our 7,000 plus hotels, the majority are actually franchised hotels because that’s the legacy of what still is the model in the US. When I joined Hilton 12 and a half years ago, the reverse is true where nearly all of our hotels in Europe, Middle East and Africa, and indeed in Asia Pacific, were and are managed. In the Europe, Middle East and Africa regions right now we’re building up close to a 50/50 split between managed, leased and franchised.”
What has pleased you most about the roll-out of the HSM?
PF: “It’s certainly not been easy because we’ve got 70 countries that sit within our region here in EMEA and Hilton’s penetration in those individual countries is very different. We may have 100 hotels in one of those markets and only one or two in specific countries. Our scale and our ability to get logistics solutions is different by market.
“Getting everyone on board to what we want to achieve to our guests and to our owners means we have to pull different levers. We have very effective brand standards. If you’re signing up to Hilton, you’re signing up to delivering against those brand standards that we believe are right for our organisation.”
What kind of feedback have you had from your clients?
PF: “Integrity is in our DNA, and we work very closely with our suppliers who we value as partners. These are long-term relationships, and we work hand in hand because we have to see that they’re successful so that we can be successful – it’s really important to what we do and we constantly look for feedback.
“With our internal and our external customers, we’ll have quarterly business reviews and so we’ll get that feedback through surveys where we are asking them to tell us what we do well and what we could do better. Our partners are now asking what additional value can you do to bring support to our organisation through ESG? So that’s what’s on the table now when it wasn’t before. But it’s not just that – it’s about the security of supply competitiveness, competitiveness of pricing, and a whole bunch of other very important things as well.”
Looking to the future, what’s on the agenda for the next few years?
PF: “We’re out there meeting and greeting people in person and there’s always new opportunities that make things exciting in what we do and how we work. Innovation’s very high on our agenda and we’re very proud of what we do in food and beverage. In non-food categories, it’s about how we support our owners and our hotel general managers to find that competitive edge and do the next big thing ahead of our competitors.”
Anything else important to know?
PF: “One thing we’ve been able to take full advantage of is how we’ve been able to grow our business by bolting on new customers. I think it’s fantastic that our competitors choose to use Hilton Supply Management because they benchmarked what our capabilities are and how competitive we are.
“Another key part of the agenda is environmental, social and governance (ESG) sustainability. Responsible sourcing and everything that sits within that is front and centre of what we do. Within that you’ve got human rights, animal welfare, single use plastics as well as general responsible sourcing like managing food waste. The list is very long, but they’re all very important.”
Check out the latest issue of CPOstrategy Magazine here.
“Disruption should drive digitalisation and cloud uptake rather than hindering it.”
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Sal Laher, Chief Digital & Information Officer at global enterprise software provider IFS, reveals how a single strategy for cloud and digitalisation helps businesses maximise the rewards of growth.
Digitalisation equals transformation
Digitalisation and the business transformation projects that enable it are again on the radar for many businesses, particularly given the current macro-economics and potential recession being predicted. According to recent data from Research and Markets, The Global Digital Transformation Market size is expected to reach $1,302.9bn by 2027, rising at a compound annual growth rate (CAGR) of 20.8% in the period 2021-2027.
This renewed focus on digitalisation is aligned to businesses accelerating cloud migration, including readily available SaaS solutions. The Flexera 2021 State of the Cloud Report finds 92% of enterprises have a multi-cloud strategy and 80% have a hybrid cloud strategy.
Sal Laher, Chief Digital & Information Officer, IFS
Both trends will go hand in hand as digitalisation and cloud migration continue to drive business efficiencies, process change and consumer service demands. Most organisations are aware of the potential rewards both business models can bring. This is because it is not the first time they are being talked about– this major transformational shift has already been in place for a decade. But some, wary of the disruptive impact of recent global events are holding back from implementing them. However, it is the wrong approach.
Disruption should drive digitalisation and cloud uptake rather than hindering it. Even in isolation, either moving to the cloud, or undertaking digitalisation, will enable faster decision-making, supported by greater compute power and more agile processes, generating faster output and enhancing customer service. Yet, to drive competitive edge, organisations need to combine cloud migration with business transformation and look to maximise those benefits. To do this, they must develop a single strategy covering both elements and move forward with a common approach.
Migrating to the cloud for business transformation
By digitalising, organisations have an opportunity to benefit from faster time to insight, enhanced business and customer connectivity, and operational efficiencies. It allows them to more easily collect and analyse data that they can later turn into actionable, revenue-generating insights.
Over time, they can go further and start to tap into the benefits of artificial intelligence, machine learning, big data analytics, and the Internet of Things (IoT). But it is the additional compute power and scalability of the cloud that helps them to maximise these benefits and fulfil the potential of digital technologies.
Cloud migration also includes adopting evergreen application (business process) solutions in the cloud with the many SaaS solutions that are available today. That’s why it is important that they adopt a single plan to migrate to the cloud and drive business transformation all in one. This tandem approach also avoids unnecessary customisation, making a business much more agile to change based on actionable data insights.
Adopting a single plan will, in itself, drive up efficiencies and drive down costs. But critically, the two must be linked to ensure that businesses maximise the benefits of the migration process.
It is cloud, after all, that helps businesses adapt to the new digital world, enabling them, for instance, to leverage out of the box business applications, digital analytics tools and low code platforms that deliver informed decision-making and reduce costs. But cloud doesn’t just maximise the benefits for businesses, it also accelerates them. Cloud has become the fulcrum of digital transformation, mainly due to its ability to enable innovation at scale and allow businesses that have digitalised to rapidly launch enterprise-ready products.
Without cloud, businesses will struggle to drive through timely updates to systems and processes. The costs of stakeholder management may ramp up. Moreover, moving to the cloud without doing it within the step-by-step structure of digital transformation risks mistakes being made, increasing the likelihood of data loss and security breaches through misconfigurations.
Optimising the benefits of digital transformation in the cloud
We have seen how important it is to adopt a single strategy for cloud migration and digitalisation and to execute them in tandem. But organisations also need to maximise the benefits of the combined approach. So how can they best do this?
First, they need to avoid procrastination and delay. The benefits of digitalisation and cloud migration working together are compelling – and senior leaders need to seize the initiative and kickstart the transformation. To get the ball rolling, they need to conduct a benchmarking exercise to better understand where their business stands in terms of its capabilities or gaps. This will help to decide where efforts and resources should be focused.
They then need to align their business processes with IT. That’s key as modern business models increasingly emphasise the digitalisation of processes.
Cloud computing and network security concept, 3d rendering,conceptual image.
They should begin by determining their goals and the systems, technologies, and processes currently in use to achieve them. Next, they need to brainstorm and document core business objectives before developing a cloud and digitalisation migration roadmap to guide their implementation. Measuring performance will also be crucial to optimising results. In choosing which metrics to analyse, organisations should concentrate on those that will most positively impact their bottom line or user experience.
Ensuring employees buy into the process of cloud-based digitalisation will also be key. Organisations should use cloud-based digitalisation as an opportunity to strengthen business processes and help employees switch to new ways of working which maximise the potential of the new technology.
Digital readiness
Given all this, it is vital businesses don’t delay on their journey to digital and the cloud. Unfortunately, CIOs often struggle to know where to start with a cloud and digital migration strategy.
Before they begin, they often look to put a complete strategy in place up front. The truth is that it is not necessary. Instead, they need to get going and prioritise what’s most important. Pick one area, settle on a use case, digitalise, and move it to the cloud, demonstrate results – and then repeat incrementally. That will enable the business to showcase value and create momentum. Over time also, this single coordinated approach, will allow it to tap into a wide range of cloud and digitalisation related benefits – and ultimately to maximise the rewards.
Ian Povey, CIO – Head of Payments Services & Technology, on the strategic transformation taking place at NatWest benefitting both the bank and its customers
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This month’s cover story reveals how innovation is at the core of change for payments processes at NatWest.
Welcome to the latest issueof Interface magazine!
Charles Darwin famously said: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” Technology is helping us to evolve. And that evolution is being driven by innovation.
“It may be a cliché, but a transformation journey really has no end… If you fixate on a constant end state without ‘checking in’ you can, and likely will, fail in your objectives.” A wise outlook from a CIO with three decades of change management experience across banking’s payments panorama.
Ian Povey, CIO – Head of Payments Services & Technology, discusses the strategic transformation taking place at NatWest and how that journey of change and innovation is benefitting both the bank and its customers as it evolves to become a relationship bank for a digital world. “Our environment is always changing – we must be on the back of the ‘Change Dragon’ and steering/influencing as a leader and always learning from our teams for new ideas.”
Customer-Centric transformation at FedEx
We also check in with logistics leader FedEx… Custom Critical CIO Cheryl Bevelle-Orange reveals a “technology-forward yet flexible company” embracing innovation and “paving the way for customers to get more relevant information faster about their packages while delivering with excellence”.
https://www.youtube.com/watch?v=galaZZlrEn0
Continuous Improvement in IT at Mazars
Mazars CIO David Marcelino explains his approach to innovation and leading on a successful IT transformation program at one of the world’s largest audit and advisory firms aiming to improve the digital experience for all its stakeholders. “Change Management, adoption, training and awareness are at the core of every single business technology project we deliver.”
Tech innovation at speed with the US Air Force
We also caught up with George Forbes, Director of Digital Operations Directorate at the United States Air Force, who outlines the importance of innovation within the federal government.
Digital Transformation in healthcare at Avellino
Nancy Selph, Global Head of IT at Avellino Lab, discusses how technology is creating new opportunities to improve health outcomes and the importance of leadership in the industry.
Also in this issue, we round up the key tech events and conferences across the globe; we learn how Minted are making it easy for everyone to invest in gold; and we feature the latest on cloud digitalisation from IFS.
What does today’s CEO need to do to accelerate an organisation’s digital transformation journey?
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Digital transformation journeys are no one-size-suits-all. There is no singular way to welcome a new wave of technology into operations.
Since the turn of the century, digitalisation has had an increasingly influential impact on the way CEOs make decisions. Today’s world is full of disruption and potential risk. And with technology growing in complexity it can be challenging to lead such a revolution against a backdrop of economic uncertainty.
Embracing digital
According to KPMG 2022 CEO Outlook, which draws on the perspectives of 1,325 global CEOs across 11 markets, 72% of CEOs agree they have an aggressive digital investment strategy intended to secure first-mover or fast-follower status.
Advancing digitalisation and connectivity across the business is tied (along with attracting and retaining talent) as the top operational priority to achieve growth over the next three years. This digital transformation focus could be driven as a result of increasingly flexible working conditions and greater focus on cybersecurity threats.
However, the prospect of recession is threatening to halt digital transformation in the short-term. KPMG research found that four out of five CEOs note their businesses are pausing or reducing their digital transformation strategies to prepare for the anticipated recession.
This is reinforced further when 70% say they need to be quicker to shift investment to digital opportunities and divest in those areas where they face digital obsolescence.
When a company’s digital transformation ambition is mismatched to its readiness, it is the CEO’s responsibility to close the gap. According to Deloitte, in order to do this successfully, the CEO must assess the current level of organisational readiness for change.
This covers four key pillars that are mixed together to work out an organisation’s overall readiness: leadership, culture, structure and capabilities.
How CEOs can close the gap
Leadership: CEOs need to ensure their c-suite and other key executives are motivated and equipped to execute the vision. CEOs interviewed by Deloitte in a recent study emphasised the importance of the leadership team supporting the transformation vision and having a positive attitude and willingness to transform.
Culture: A large potential barrier to readiness in the organisation is down to culture. Low cultural readiness takes the form of bureaucratic, reactive and risk-averse ways of working that are at against the collaborative, proactive learning mindset needed for ambitious transformation.
Structure: If a company hopes to operate differently, it could mean the need for organising in an alternative way. CEOs will often need to lead the reorganisation of teams, assignment of new roles, revision of incentives, strategies to collapse organisational hierarchies or layers to increase agility.
Capabilities: CEOs need to equip their organisation with four key capabilities to harness digital for a superior capacity for change. These are nimbleness, scalability, stability and optionality which are often enabled or supercharged by digital technologies which are critical factors for competing in an increasingly disrupted world.
For now, one of the CEOs most important roles when steering the ship through disruption is to be ahead of the latest trends and tackle change head-on. By embracing a new digital future that will provide the company with long-lasting benefits, it will help create a brighter and future-proofed firm for years to come even after the CEO is gone.
Here are five of the biggest procurement events happening during 2023 that chief procurement officers won’t want to miss.
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Procurement Futures
London, UK | 1-2 February 2023
Held at the QEII Centre in central London, Procurement Futures is a new conference, launching in 2023. It promises delegates the chance to find out how to make supply chains more resilient, with thought-provoking and presentations and discussions designed to inform and inspire.
There is a flexible programme of content that can be tailored to attendees’ preferences, with networking opportunities throughout and a huge variety of sessions to attend and take part in.
This CIPS event has three streams of content: Insights, Ignite and Interact. Insights will showcase presentations and panel discussions from leaders, Ignite will consist of hands-on workshops to help delegates optimise their procurement strategies and Interact will be smaller groups taking part in interactive roundtables and debates.
Speakers across the two days will include Ross Grierson, Director of Procurement, Primark; Patrick Dunne, Director of Group Property, FM & Procurement (CPO), Sainsburys Plc; Rebecca Simpson, Procurement and Supply Chain Director, Balfour Beatty; and Nick Jenkinson, Chief Procurement Officer, Santander. In addition, delegates are ablew to book a one-to-one career workshop, where they’ll get advice on professional development from coaches covering a variety of specialisms.
Tickets are £795 for CIPS member, £995 for a non-member and £2240 for a supplier/solution provider, and there is a discount of 30% for tickets purchased before 30 November 2022.
The third World Digital Procurement Summit is aimed at procurement directors, VPs, managers and other industry specialists. The two-day event will focus on accelerating procurement processes, adopting emerging technologies, finding the right talent, overcoming the barriers to progress and embarking on a journey of transformation. It’s a hybrid event, bringing together procurement experts from various industries, which will maximise knowledge exchange opportunities. The event organisers list five key learning points for delegates:
Exploring the latest advances in data and cognitive technologies to gain greater insights and improve procurement processes
Overhauling the procurement ecosystem with new technologies and strategies to drive business value
Sharing the best practices of monitoring and managing a range of risks to hedge against future disruptions
Developing capabilities and skillset required for the digital transformation of procurement
Defining ESG metrics of the procurement strategy to ensure business continuity
Speakers will include Paul Harlington, Group Procurement Director at TUI Group and Patrick Foelck, Head of Strategy and Transformation Procurement at Roche.
Click here to check out a video from a previous event. Tickets cost €1495.
Returning for its 8th annual event, Women in Procurement & Supply Chain will deliver two days dedicated to leadership and the future of procurement. The event will feature a series of exclusive panel discussions and keynote addresses examining career development, overcoming imposter syndrome, working with confidence, developing an unbeatable talent pool, mentoring, diversity and inclusivity.
It will also address risk mitigation, digital disruption, ESG, sustainability, economic development, ethical sourcing, category management, cultural diversity, strategic sourcing, supplier relationships, procurement with purpose, and supply chain resilience. There are two pre-conference masterclass options on 6 March – that can be booked separately – covering either contract law or leadership skills.
Some of the reasons to attend include:
Discover the path to taking your procurement career to a new level while elevating your organisation with dedicated days on leadership and the future of procurement
Learn best practice strategies to facedown supply chain vulnerabilities and reduce risk exposure
Get ahead of the game with insights into the future of procurement and the impact of globalisation on modern supply chains
Put yourself at the cutting edge of ESG and procurement with the latest updates and trends in procurement with purpose
Speakers for the main two-day conference include Michelle Richard, Director of Procurement, Thales; Karina Davies, Chief Procurement Officer, icare NSW; and Kylie McKinlay, Procurement Partner – Property and Business, Australian Broadcasting Corporation.
Tickets start at $3,495 with discounts available until 25 November 2022.
The Americas Procurement Congress will feature the region’s most progressive CPOs sharing their expertise
With a focus on what makes CPOs tick, the Americas Procurement Congress will feature the region’s most progressive CPOs sharing their expertise in keynote presentations and working groups.
Giving delegates the tools to stay on the cutting edge of procurement developments, there are also sessions aimed at those with responsibilities over governance, procurement capabilities and quantifying data. Unsurprisingly, sustainability will also be a key theme in 2023, and attendees will hear from a diverse range of sustainability leaders about how to transition from traditional metrics to a purpose-driven function.
The agenda for Americas Procurement Congress 2023 will include:
Sustainability of the future
How to transition from traditional metrics to a purpose-driven function
Harnessing the power of digital transformation
Utilizing data as a driver of sustainable value, supply continuity and transparency Agile procurement
New approaches and skills that facilitate speed and agility
Frictionless procurement
Removing friction from the procurement process to support high-velocity sourcing
Beyond Just in Time
Designing future-fit supply networks for an age of chaos and conflict
Gartner Supply Chain Symposium/Xpo 2022 addressed the most significant challenges that chief supply chain officers and supply chain leaders face as they mitigate risk and navigate uncertainty in an increasingly dynamic and challenging environment.
At the conference, the top 5 sessions that CSCOs and supply chain leaders met on included:
Signature Series: The Future of Supply Chain
What the Pivot to Sustainable Profit Means for Procurement Leaders
The Art of the New Age One Page Dashboard: Why Your Current Perfor-mance Measures May Be Doing More Harm Than Good
Manage Supplier Risk With Technology
Procurement Role Redesign: Stop Fitting Square Pegs Into Round Holes
Here are five of the best procurement schools in Europe.
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As procurement becomes an increasingly vital and strategic function within many organisations, people are beginning to realise the full potential of turning it into a career for themselves.
This has subsequently led to many universities noticing the demand in the industry and offering courses which equip students with the relevant qualifications and skills needed to succeed in the supply chain space.
With this in mind, here are five of the best procurement schools in Europe.
1. CIPS
Course: Various Where: Across England
Run by Oxford College of Procurement and Supply, there are 10 Chartered Institute of Procurement and Supply centres in England offering several different qualification levels to choose from. The courses are recognised throughout the world as harnessing leading edge thinking and professionalism across the procurement and supply chain management space.
CIPS offers courses such as level three, four, five and six in procurement and supply with each qualification created to reflect current, emerging and best practice in procurement and supply chain management. Classes focus on exploring legacy purchasing and supply methods as well as techniques and theory to the application in a business environment.
CIPS doesn’t just offer in-person studying as courses are designed to suit individual lifestyles with virtual classrooms, part-time and weekend options to choose from.
2. Politecnico di Milano
Course: MSc in Supply Chain and Procurement Management Where: Milan, Italy
Renowned as being one of the best scientific and technological universities in the world, Politecnico di Milano offers an extensive portfolio of programmes in a variety of different spaces. Its supply chain master’s degree is a 12-month course aimed at equipping students with vital knowledge and skills needed to succeed in the industry.
The course also includes a number of practical activities in the programme such as lessons with international lectures, workshops on soft skills, company presentations, projects with companies, company visits and an international study tour in Rotterdam.
According to Politecnico di Milano, 86% of students were employed three months after graduation while 55% were also working abroad during the same period.
The course was ranked third in the TOP 2021 Eduniversal Best Masters Ranking (Global) and eighth in the QS Supply Chain Management Masters Rankings for 2023.
3. SKEMA Business School
Course: MSc (and MS) Supply Chain Management and Purchasing Where: Lille and Paris, France
Skema offers two supply chain management (SCM) and procurement masters: The premium international MSc Global Supply Chain Management in Lille taught in English, and the MS in SCM and Purchasing in Paris and Lille mainly taught in French. France’s highly-rated supply chain and procurement program has been designed with a progressive shift from theory to practice. The degree covers the entirety of supply chain activities from planning, purchasing, receiving, production, storage to delivery through nine compulsory and six elective courses.
The global MSc has a new cooperation with the leading prestigious business school, MIT in the US, plus another cooperation with Politechnico from Milano. The MSc master’s degree provides soft skills in supply chain and purchasing management as well as going into future trends in digitalisation, AI, sustainability, ethics, globalisation, risk management and agility. The course’s primary goal is to find future leaders who are seeking to make a positive impact on the world of supply chain management and procurement. The MSc is a full time program, complemented by paid internships in the area of the student’s choice, while the MS alternates weeks of classes with professionals at the forefront of their fields.
4. Audencia Business School
Course: MSc in Supply Chain and Purchasing Management Where: Nantes, France
Created in 2009, Audencia Business School’s programme will cover topics such as procurement, global sourcing and supply chain strategies. Other topics to feature includes green logistics, Big Data, digital transformation, negotiation and commercial law. The course will provide expertise from industry insiders as business executives visit and share professional insights during the programme.
The school works closely with the corporate world and is recognised for its responsible management practices. Audencia is triple-accredited, highly ranked and internationally oriented and according to its website, 79% of course graduates are employed before graduation. The course is available as a one-year or two-year master’s programme.
In autumn 2024, the course is set to be renamed to the MSc in Responsible Procurement and Supply Chain Management.
5. Cranfield School of Management
Course: MSc in Procurement and Supply Chain Management Where: Cranfield, United Kingdom
Cranfield School of Management provides students with specialist knowledge and skills in procurement needed to progress their careers
Cranfield’s Procurement and Supply Chain Management course has been co-designed with senior industry executives. This purchasing postgraduate course provides students with specialist knowledge and skills in procurement needed to progress their careers. Possessing one of the largest facilities in Europe, the course places considerable emphasis on how to overcome real-world challenges.
Students will gain an in-depth understanding of supply chain strategy and sustainability, procurement strategy, supplier selection and evaluation, negotiation and contact management. They will also be taught how to use data, models and software to solve problems and inform decisions, inventory and operations management and how to design effective supply chain operations.
Students will have the opportunity to attend a study tour and experience a different supply chain perspective elsewhere in Europe.
The course was ranked 11th in the world on the QS Supply Chain Management Masters Rankings for 2023.
Expert analysis of the tech trends set to make waves this year
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Digital transformation is a continuing journey of change with no set final destination. This makes predicting tomorrow a challenge when no one has a crystal ball to hand.
After a difficult few years for most businesses following a disruptive pandemic and now battling a cost-of-living crisis, many enterprises are increasingly leveraging new types of technology to gain an edge in a disruptive world.
With this in mind, here are what experts predict for the next 12 months…
1. Process Mining
Sam Attias, Director of Product Marketing at Celonis, expects to see a rise in the adoption of process mining as it evolves to incorporate automation capabilities. He says process mining has traditionally been “a data science done in isolation” which helps companies identify hidden inefficiencies by extracting data and visually representing it.
“It is now evolving to become more prescriptive than descriptive and will empower businesses to simulate new methods and processes in order to estimate success and error rates, as well as recommend actions before issues actually occur,” says Attias. “It will fix inefficiencies in real-time through automation and execution management.”
2. The evolution of social robots
Gabriel Aguiar Noury, Robotics Product Manager at Canonical, anticipates social robots to return this year. After companies such as Sony introduced robots like Poiq, Aguiar Noury believes it “sets the stage” for a new wave of social robots.
“Powered by natural language generation models like GPT-3, robots can create new dialogue systems,” he says. “This will improve the robot’s interactivity with humans, allowing robots to answer any question.
“Social robots will also build narratives and rich personalities, making interaction with users more meaningful. GPT-3 also powers Dall-E, an image generator. Combined, these types of technologies will enable robots not only to tell but show dynamic stories.”
3. The rebirth of new data-powered business applications
Christian Kleinerman, Senior Vice President of Product at Snowflake, says there is the beginning of a “renaissance” in software development. He believes developers will bring their applications to central combined sources of data instead of the “traditional approach” of copying data into applications.
“Every single application category, whether it’s horizontal or specific to an industry vertical, will be reinvented by the emergence of new data-powered applications,” affirms Kleinerman. “This rise of data-powered applications will represent massive opportunities for all different types of developers, whether they’re working on a brand-new idea for an application and a business based on that app, or they’re looking for how to expand their existing software operations.”
4. Application development will become a two-way conversation
Adrien Treuille, Head of Streamlit at Snowflake, believes application development will become a two-way conversation between producers and consumers. It is his belief that the advent of easy-to-use low-code or no-code platforms are already “simplifying the building” and sharing of interactive applications for tech-savvy and business users.
“Based on that foundation, the next emerging shift will be a blurring of the lines between two previously distinct roles — the application producer and the consumer of that software.”
He adds that application development will become a collaborative workflow where consumers can weigh in on the work producers are doing in real-time. “Taking this one step further, we’re heading towards a future where app development platforms have mechanisms to gather app requirements from consumers before the producer has even started creating that software.”
5. The Metaverse
Paul Hardy, EMEA Innovation Officer at ServiceNow, says he expects business leaders to adopt technologies such as the metaverse in 2023. The aim of this is to help cultivate and maintain employee engagement as businesses continue working in hybrid environments, in an increasingly challenging macro environment.
“Given the current economic climate, adoption of the metaverse may be slow, but in the future, a network of 3D virtual worlds will be used to foster meaningful social connections, creating new experiences for employees and reinforcing positive culture within organisations,” he says. “Hybrid work has made employee engagement more challenging, as it can be difficult to communicate when employees are not together in the same room.
“Leaders have begun to see the benefit of hosting traditional training and development sessions using VR and AI-enhanced coaching. In the next few years, we will see more workplaces go a step beyond this, for example, offering employees the chance to earn recognition in the form of tokens they can spend in the real or virtual world, gamifying the experience.”
6. The year of ESG?
Cathy Mauzaize, Vice President, EMEA South, at ServiceNow, believes 2023 could be the year that environmental, social and corporate governance (ESG) is vital to every company’s strategy.
“Failure to engage appropriate investment in ESG strategies could plunge any organisation into a crisis,” she says. “Legislation must be respected and so must the expectations of employees, investors and your ecosystem of partners and customers.
“ESG is not just a tick box, one and done, it’s a new way of business that will see us through 2023 and beyond.”
7. Macro Trends and Redeploying Budgets for Efficiency
Ulrik Nehammer, President, EMEA at ServiceNow, says organisations are facing an incredibly complex and volatile macro environment. Nehammer explains as the world is gripped by soaring inflation, intelligent digital investments can be a huge deflationary force.
“Business leaders are already shifting investment focus to technologies that will deliver outcomes faster,” he says. “Going into 2023, technology will become increasingly central to business success – in fact, 95% of CEOs are already pursuing a digital-first strategy according to IDC’s CEO survey, as digital companies deliver revenue growth far faster than non-digital ones.”
8. Organisations will have adopted a NaaS strategy
David Hughes, Aruba’s Chief Product and Technology Officer, believes that by the end of 2023, 20% of organisations will have adopted a network-as-a-service (NaaS) strategy.
“With tightening economic conditions, IT requires flexibility in how network infrastructure is acquired, deployed, and operated to enable network teams to deliver business outcomes rather than just managing devices,” he says. “Migration to a NaaS framework enables IT to accelerate network modernisation yet stay within budget, IT resource, and schedule constraints.
“In addition, adopting a NaaS strategy will help organisations meet sustainability objectives since leading NaaS suppliers have adopted carbon-neutral and recycling manufacturing strategies.”
9. Think like a seasonal business
According to Patrick Bossman, Product Manager at MariaDB corporation, he anticipates 2023 to be the year that the ability to “scale out on command” is going to be at the fore of companies’ thoughts.
“Organisations will need the infrastructure in place to grow on command and scale back once demand lowers,” he says. “The winners in 2023 will be those who understand that all business is seasonal, and all companies need to be ready for fluctuating demand.”
10. Digital platforms need to adapt to avoid falling victim to subscription fatigue
Demed L’Her, Chief Technology Officer at DigitalRoute, suggests what the subscription market is going to look like in 2023 and how businesses can avoid falling victim to ‘subscription fatigue’. L’Her says there has been a significant drop in demand since the pandemic.
“Insider’s latest research shows that as of August, nearly a third (30%) of people reported cancelling an online subscription service in the past six months,” he reveals. “This is largely due to the rising cost of living experienced globally that is leaving households with reduced budgets for luxuries like digital subscriptions. Despite this, the subscription market is far from dead, with most people retaining some despite tightened budgets.
“However, considering the ongoing economic challenges, businesses need to consider adapting if they are to be retained by customers in the long term. The key to this is ensuring that the product adds value to the life of the customer.”
11. Waking up to browser security
Jonathan Lee, Senior Product Manager at Menlo Security, points to the web browser being the biggest attack surface and suggests the industry is “waking up” to the fact of where people spend the most time.
“Vendors are now looking at ways to add security controls directly inside the browser,” explains Lee. “Traditionally, this was done either as a separate endpoint agent or at the network edge, using a firewall or secure web gateway. The big players, Google and Microsoft, are also in on the act, providing built-in controls inside Chrome and Edge to secure at a browser level rather than the network edge.
“But browser attacks are increasing, with attackers exploiting new and old vulnerabilities, and developing new attack methods like HTML Smuggling. Remote browser isolation is becoming one of the key principles of Zero Trust security where no device or user – not even the browser – can be trusted.”
12. The year of quantum-readiness
Tim Callan, Chief Experience Officer at Sectigo, predicts that 2023 will be the year of quantum-readiness. He believes that as a result of the standardisation of new quantum-safe algorithms expected to be in place by 2024, this year will be a year of action for government bodies, technology vendors, and enterprise IT leaders to prepare for the deployment.
“In 2022, the US National Institute of Standards and Technologies (NIST) selected a set of post-quantum algorithms for the industry to standardise on as we move toward our quantum-safe future,” says Callan.
“In 2023, standards bodies like the IETF and many others must work to incorporate these algorithms into their own guidelines to enable secure functional interoperability across broad sets of software, hardware, and digital services. Providers of these hardware, software, and service products must follow the relevant guidelines as they are developed and begin preparing their technology, manufacturing, delivery, and service models to accommodate updated standards and the new algorithms.”
13. AI: fewer keywords, greater understanding
AI expert Dr Pieter Buteneers, Director of AI and Machine Learning at Sinch, expects artificial intelligence to continue to transition away from keywords and move towards an increased level of understanding.
“Language-agnostic AI, already existent within certain AI and chatbot platforms, will understand hundreds of languages — and even interchange them within a single search or conversation — because it’s not learning language like you or I would,” he says. “This advanced AI instead focuses on meaning, and attaches code to words accordingly, so language is more of a finishing touch than the crux of a conversation or search query.
“Language-agnostic AI will power stronger search results — both from external (the internet) and internal (a company database) sources — and less robotic chatbot conversations, enabling companies to lean on automation to reduce resources and strain on staff and truly trust their AI.”
14. Rise in digital twin technology in the enterprise
John Hill, CEO and Founder of Silico, recognises the growing influence digital twin technology is having in the market. Hill predicts that in the next 20 years, there will be a digital twin of every complex enterprise in the world and anticipates the next generation of decision-makers will routinely use forward-looking simulations and scenario analytics to plan and optimise their business outcomes.
“Digital twin technology is one of the fastest-growing facets of industry 4.0 and while we’re still at the dawn of digital twin technology,” he explains. “Digital twins will have huge implications for unlocking our ability to plan and manage the complex organisations so crucial for our continued economic progress and underpin the next generation of Intelligent Enterprise Automation.”
15. Broader tech security
With an exponential amount of data at companies’ fingertips, Tricentis CEO, Kevin Thompson says the need for investment in secure solutions is paramount.
“The general public has become more aware of the access companies have to their personal data, leading to the impending end of third-party cookies, and other similar restrictions on data sharing,” he explains. “However, security issues still persist. The persisting influx of new data across channels and servers introduces greater risk of infiltration by bad actors, especially for enterprise software organisations that have applications in need of consistent testing and updates. The potential for damage increases as iterations are being made with the expanding attack surface.
“Now, the reality is a matter of when, not if, your organisation will be the target of an attack. To combat this rising security concern, organisations will need to integrate security within the development process from the very beginning. Integrating security and compliance testing at the upfront will greatly reduce risk and prevent disruptions.”
16. Increased cyber resilience
Michael Adams, CISO at Zoom, expects an increased focus on cyber resilience over the next 12 months. “While protecting organisations against cyber threats will always be a core focus area for security programs, we can expect an increased focus on cyber resilience, which expands beyond protection to include recovery and continuity in the event of a cyber incident,” explains Adams.
“It’s not only investing resources in protecting against cyber threats; it’s investing in the people, processes, and technology to mitigate impact and continue operations in the event of a cyber incident.”
17. Ransomware threats
As data leaks become increasingly common place in the industry, companies face a very real threat of ransomware. Michal Salat, Threat Intelligence Director at Avast, believes the time is now for businesses to protect themselves or face recovery fees costing millions of dollars.
“Ransomware attacks themselves are already an individual’s and businesses’ nightmare. This year, we saw cybergangs threatening to publicly publish their targets’ data if a ransom isn’t paid, and we expect this trend to only grow in 2023,” says Salat. “This puts people’s personal memories at risk and poses a double risk for businesses. Both the loss of sensitive files, plus a data breach, can have severe consequences for their business and reputation.”
18. Intensified supply chain attacks
Dirk Schrader, VP of security research at Netwrix, believes supply chain attacks are set to increase in the coming year. “Modern organisations rely on complex supply chains, including small and medium businesses (SMBs) and managed service providers (MSPs),” he says.
“Adversaries will increasingly target these suppliers rather than the larger enterprises knowing that they provide a path into multiple partners and customers. To address this threat, organisations of all sizes, while conducting a risk assessment, need to take into account the vulnerabilities of all third-party software or firmware.”
19. A greater need to manage volatility
Paul Milloy, Business Consultant at Intradiem, stresses the importance of managing volatility in an ever-moving market. Milloy believes bosses can utilise data through automation to foresee potential problems before they become issues.
“No one likes surprises. Whilst Ben Franklin suggested nothing can be said to be certain, except death and taxes, businesses will want to automate as many of their processes as possible to help manage volatility in 2023,” he explains. “Data breeds intelligence, and intelligence breeds insight. Managers can use the data available from workforce automation tools to help them manage peaks and troughs better to avoid unexpected resource bottlenecks.”
20. A human AI co-pilot will still be needed
Artem Kroupenev, VP of Strategy at Augury, predicts that within the next few years, every profession will be enhanced with hybrid intelligence, and have an AI co-pilot which will operate alongside human workers to deliver more accurate and nuanced work at a much faster pace.
“These co-pilots are already being deployed with clear use cases in mind to support specific roles and operational needs, like AI-driven solutions that enable reliability engineers to ensure production uptime, safety and sustainability through predictive maintenance,” he says. “However, in 2023, we will see these co-pilots become more accurate, more trusted and more ingrained across the enterprise.
“Executives will better understand the value of AI co-pilots to make critical business decisions, and as a key competitive differentiator, and will drive faster implementation across their operations. The AI co-pilot technology will be more widespread next year, and trust and acceptance will increase as people see the benefits unfold.”
21. Building the right workplace culture
Harnessing a positive workplace culture is no easy task but in 2023 with remote and hybrid working now the norm, it brings with it new challenges. Tony McCandless, Chief Technology Officer at SS&C Blue Prism, is well aware of the role organisational culture can play in any digital transformation journey.
“Workers are the heart of an organisation, so without their buy in, no digital transformation initiative stands a chance of success,” explains McCandless. “Workers drive home business objectives, and when it comes to digital transformation, they are the ones using, implementing, and sometimes building automations. Curiosity, innovation, and the willingness to take risks are essential ingredients to transformative digitalisation.
“Businesses are increasingly recognising that their workers play an instrumental role in determining whether digitalisation initiatives are successful. Fostering the right work environment will be a key focus point for the year ahead – not only to cultivate buy-in but also to improve talent retention and acquisition, as labor supply issues are predicted to continue into 2023 and beyond.”
22. Cloud cover to soften recession concerns
Amid a cost-of-living crisis and concerns over any potential recession as a result, Daniel Thomasson, VP of Engineering and R&D at Keysight Technologies, says more companies will shift data intensive tasks to the cloud to reduce infrastructure and operational costs.
“Moving applications to the cloud will also help organisations deliver greater data-driven customer experiences,” he affirms. “For example, advanced simulation and test data management capabilities such as real-time feature extraction and encryption will enable use of a secure cloud-based data mesh that will accelerate and deepen customer insights through new algorithms operating on a richer data set. In the year ahead, expect the cloud to be a surprising boom for companies as they navigate economic uncertainty.”
23. IoT devices to scale globally
Dr Raullen Chai, CEO and Co-Founder of IoTeX, recognises a growing trend in the usage of IoT devices worldwide and believes connectivity will increase significantly.
“For decades, Big Tech has monopolised user data, but with the advent of Web3, we will see more and more businesses and smart device makers beginning to integrate blockchain for device connectivity as it enables people to also monetise their data in many different ways, including in marketing data pools, medical research pools and more,” he explains. “We will see a growth in decentralised applications that allow users to earn a modest additional revenue from everyday activities, such as walking, sleeping, riding a bike or taking the bus instead of driving, or driving safely in exchange for rewards.
“Living healthy lifestyles will also become more popular via decentralised applications for smart devices, especially smart watches and other health wearables.”
The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now…
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The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now coming to fruition and embedding themselves into our daily lives. The thinking might be there, but is our technology really ready to go meta? Domains and hosting provider, Fasthosts, spoke to the experts to find out…
How the metaverse works
The metaverse is best defined as a virtual 3D universe which combines many virtual places. It allows users to meet, collaborate, play games and interact in virtual environments. It’s usually viewed and accessed from the outside as a mixture of virtual reality (VR), (think of someone in their front room wearing a headset and frantically waving nunchucks around) and augmented reality (AR), but it’s so much more than this…
These technologies are just the external entry points to the metaverse and provide the visuals which allow users to explore and interact with the environment within the metaverse.
This is the ‘front-end’ if you like, which is also reinforced by artificial intelligence and 3D reconstruction. These additional technologies help to provide realistic objects in environments, computer-controlled actions and also avatars for games and other metaverse projects.
So, what stands in the way of this fantastical 3D universe? Here are the six key challenges:
Technology
The most important piece of technology, on which the metaverse is based, is the blockchain. The blockchain is essentially a chain of blocks that contain specific information. They’re a combination of computers linked to each other instead of a central server which means that the whole network is decentralised. This provides the infrastructure for the development of metaverse projects, storage of data and also allows them the capability to be compatible with Web3. Web3 is an upgraded version of the internet which will allow integration of virtual and augmented reality into people’s everyday lives.
Sounds like a lot, right? And it involves a great deal of tech that is alien to the vast majority of us. So, is technology a barrier to widespread metaverse adoption?
Jonothan Hunt, Senior Creative Technologist at Wunderman Thompson, says the tech just isn’t there. Yet.
“Technology’s readiness for the mass adoption of the metaverse depends on how you define the metaverse, but if we’re talking about the future vision that the big tech players are sharing, then not yet. The infrastructure that powers the internet and our devices isn’t ready for such experiences. The best we have right now in terms of shared/simulated spaces are generally very expensive and powered entirely in the cloud, such as big computers like the Nvidia Omniverse, cloud streaming, or games. These rely heavily on instancing and localised grouping. Consumer hardware, especially XR, is still not ready for casual daily use and still not really democratised.
“The technology for this will look like an evolution of the systems above, meaning more distributed infrastructure, better access and updated hardware. Web3 also presents a challenge in and of itself, and questions remain over to what extent big tech will adopt it going forward.”
Storage
Blockchain is the ‘back-end’, where the magic happens, if you will. It’s this that will be the key to the development and growth of the metaverse. There are a lot of elements that make up the blockchain and reinforce its benefits and uses such as storage capabilities, data security and smart contracts.
Due to its decentralised nature, the blockchain has far more storage capacity than the centralised storage systems we have in place today. With data on the metaverse being stored in exabytes, the blockchain works by making use of unutilised hard disk space across the network, which avoids users within the metaverse running out of storage space worldwide.
In terms that might be a bit more relatable, an exabyte is a billion gigabytes. That’s a huge amount of storage, and that doesn’t just exist in the cloud – it’s got to go somewhere – and physical storage servers mean land is taken up, and energy is used. Hunt says: “How long’s a piece of string? The whole of the metaverse will one day be housed in servers and data centres, but the amount or size needed to house all of this storage will beentirely dependent on just how mass adopted the metaverse becomes. Big corporations in the space are starting to build huge data centres – such as Meta purchasing a $1.1 billion campus in Toledo, Spain to house their new Meta lab and data centre – but the storage space is not the only concern. These energy-guzzlers need to stay cool! And what about people and brands who need reliable web hosting for events, gaming or even just meeting up with pals across the world, all that information – albeit virtual – still needs a place to go.
“The current rising cost of electricity worldwide could cause problems for the growth of data centres, and the housing of the metaverse as a whole. However, without knowing the true size of its adoption, it is extremely difficult to truly determine the needed usage. Could we one day see an entire island devoted to data centre storage? Purely for the purposes of holding the metaverse? It seems a little ‘1984’, but who knows?”
Identity
Although the blockchain provides instantaneous verification of transactions with identity through digital wallets, our physical form will be represented by avatars that visually reflect who we are, and how we want to be seen.
The founder of Saxo Bank and the chairman of the Concordium Foundation, Lars Seier Christensen, argues, “I think that if you use an underlying blockchain-based solution where ID is required at the entry point, it is actually very simple and automatically available for relevant purposes. It is also very secure and transparent, in that it would link any transactions or interactions where ID is required to a trackable record on the blockchain.”
Once identity is established, it is true that it could potentially become easier to assess creditworthiness of parties for purchasing and borrowing in the metaverse due to the digital identity and storage of each individual’s data and transactions on the blockchain. However, although it sounds exciting, there must be considerations into how it could impact privacy, and how this amount of data will be recorded on the blockchain.
Security
There are also huge security benefits to this set up. The decentralised blockchain helps to eradicate third-party involvement and data breaches, such as theft and file manipulation, thanks to its powerful data processing and use of validation nodes. Both of these are responsible for verifying and recording transactions on the blockchain. This will be reassuring to many, given the widespread concerns around data privacy and user protection in the metaverse.
To access the blockchain all we will need is an internet connection and a device, such as a laptop or smartphone, this is what makes it so great as it will be so readily available. However, to support the blockchain, we’re relying on a whole different set of technologies. Akash Kayar, CEO of web3-focused software development company Leeway Hertz, had this to say on the readiness of the current technology available: “The metaverse is not yet completely mature in terms of development. Tech experts are researching strategies and
testing the various technologies to develop ideas that provide the world with more feasible and intriguing metaverse projects.
“Projects like Decentraland, Axie Infinity, and Sandbox are popular contemporary live metaverse projects. People behind these projects made perfect use of notable metaverse technologies, from blockchain and cryptos to NFTs.
“As envisioned by top tech futurists, many new technologies will empower the metaverse in the future, which will support the development of a range of prolific use cases that will improve the ability of the metaverse towards offering real-life functionalities. In a nutshell, the metaverse is expected to bring extreme opportunities for enterprises and common users. Hence, it will shape the digital future.”
Currency & Payments
Whilst it’s only considered legal tender in two countries, cryptocurrency is currently a reality and there is a strong likelihood that it will eventually be mass adopted. However, the metaverse is arguably not yet at the same maturity level, meaning cryptocurrency may have to wait before it can finally fully take off.
Golden Bitcoin symbol and finance graph screen. Horizontal composition with copy space. Focused image.
There is no doubt that cryptocurrency and the metaverse will go hand-in-hand as the former will become the tender of the latter with many of the current metaverse platforms each wielding its native currency. For example Decentraland uses $MANA for payments and purchases. However, with the volatility of crypto currencies and the recent collapse of trading platform FTX indicating security lapses, we may not yet be ready for the switch to decentralised payments.
Energy
Some of the world’s largest data centres can each contain many tens of thousands of IT devices which require more than 100 megawatts of power capacity – this is enough to power around 80,000 U.S. households (U.S. DOE 2020) and is equivalent to $1.35bn running cost per data centre with the cost of a megawatt hour averaging $150.
According to Nitin Parekh of Hitachi Energy, the amount of power which takes to process Bitcoin is higher than you might expect: “Bitcoin consumes around 110 Terawatt Hours per year. This is around 0.5% of global electricity generation. This estimate considers combined computational power used to mine bitcoin and process transactions.” With this estimate, we can calculate that the annual energy cost of Bitcoin is around $16.5bn.
However, some bigger corporations are slowly moving towards renewable energy to power their projects in this space, with Google signing close to $2bn worth of wind and solar investments in order to power its data centres in the future and become greener. Amazon has also followed in their footsteps and have become the world’s largest corporate purchaser of renewable energy.
They may have plenty of time yet to get their green processes in place, with Mark Zuckerberg recently predicting it will take nearly a decade for the metaverse to be created: “I don’t think it’s really going to be huge until the second half of this decade at the earliest.”
About Fasthosts
Fasthosts has been a leading technology provider since 1999, offering secure UK data centres, 24/7 support and a highly successful reseller channel. Fasthosts provides everything web professionals need to power and manage their online space, including domains, web hosting, business-class email, dedicated servers, and a next-generation cloud platform. For more information, head to www.fasthosts.co.uk
Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security, on the cybersecurity challenge of keeping up with the pace of the ever-changing digital world
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This month’s cover story explores how GuidePoint Security, an elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands.
Welcome to the latest issueof Interface magazine!
Interface welcomes in 2023 with a need-to-know list of what we can expect from technology this year and how it can allow enterprises to gain a competitive edge in a disruptive and increasingly digital world. Faced with everything from process mining and AI to quantum-readiness and the metaverse we cut through the hype to bring you the facts.
GuidePoint Security: digital transformation in cybersecurity
“Cybersecurity is in such a reactive mode because of the sheer volume of risks and vulnerabilities an organisation faces,” says Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security. “We see a lot of copycats and repeat attacks happen, but at the end of the day it’s all about creating solutions to help combat those problems.”
GuidePoint’s elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands. Helping them make the smartest, most informed cyber risk decisions, and choose and integrate the best-fit solutions to build the most effective cybersecurity program, Salmon discusses the challenge of keeping up with the pace of the ever-changing digital world.
bp: a strategic reinvention
“We are investing in digital to drive process efficiency and improve insights; but also to develop our people with the skills we need for now, and the future at bp. This means we are playing to win while caring for our people through investing in their personal development,” says Head of Strategic Transformation Nick Hales.
“After setting the right foundations through various remediation and compliance initiatives, we embarked on our digital transformation journey,” adds Strategy & Transformation Manager Emmanouela Vlachantoni. “There was a clear opportunity to standardise and streamline our controls environment to reduce complexity and increase insight.”
Fairfax County: winning the IT war with cybersecurity
Meanwhile, across the pond, we learn how Fairfax County in the State of Virginia is reaping the rewards of a cybersecurity program enabling government services and keeping citizens safe. “My role is to educate our leadership to ensure they understand the business value of cybersecurity as it relates to government services. Being accountable for the security of their systems and data is a key factor in developing a successful cyber program,” explains CISO Michael Dent.
Also in this issue, we round up the key tech events and conferences across the globe and, with the help of the experts at Fasthosts, take a deep dive into the metaverse… Can virtual reality become our reality? Read on to find out.
Our cover story this month reveals how Sarita Singh, Regional Head & Managing Director for Stripe in Southeast Asia, and her team are driving financial inclusion across the region and supporting SMEs with end-to-end services putting users first
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This month’s cover story reveals how Stripe’s payments platform is driving financial inclusion across Asia.
Welcome to the latest issue of Interface magazine!
Opportunities for innovation and growth via the adoption of new technologies are everywhere. However, organisations are faced with a bewildering array of choices to help them transform and choosing the best option to drive positive disruption is a tough call. We take a look at some of these fascinating journeys…
Sarita Singh, Regional Head & Managing Director for Southeast Asia, Stripe
This month’s cover story explores the genesis of fast-growing payments platform Stripe. Sarita Singh, Regional Head & Managing Director for Southeast Asia, leads a team driving financial inclusion across the region, supporting SMEs with end-to-end services putting users first.
“We’re building products and the financial infrastructure to help our users go cross-border, beyond their domestic boundaries, to widen their markets and drive efficiencies within their financial services infrastructure. With Stripe under the hood, businesses are able to focus on what they do best without wasting time researching, purchasing, integrating, and maintaining dozens of payment technology point solutions because Stripe is a platform that offers all of them, and is already integrated.”
IAG: tech procurement linked to purpose
We speak with IAG’s CPO & VMO Claire Ledder, who reveals the transformative approach to technology procurement being deployed by an Australian market leader home to several leading insurance brands. “We’re now able to tackle sourcing and contracting with an end-to-end approach capable of measuring the value delivered.”
Portrait Photography
U.S. Department of State: facilitating diplomacy with tech
Todd Cheng Director of IT Customer Service at the U.S. Department of State, talks about the ever-evolving relationship between technology and diplomacy. “We’ve been through the process of updating the IT model at State to a new, more customer centric version of the Information Technology Infrastructure Library (ITIL).” By his calculations, these changes have benefited the organisation by reducing network disruption by some 400,000 hours of diplomacy every month.
Afni
Afni’s CISO Brent Deterding explains how breaking down the traditional and perceived barriers between security and the boardroom can transparently position cyber effectiveness as a critical enabler of improved business outcomes.
Afni’s CISO Brent Deterding
Also in this issue, we hear from Zoom on the future of work and report again from London Tech Week where an expert panel gave advice for businesses on anticipating and preparing for cyber risk against a backdrop of geopolitical uncertainty.
This month’s cover story reveals the cycles of transformation, being led by CDO Lucho Torres, which are driving the disruptive digital journey at Peru’s second largest financial services group
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This month’s cover story reveals reveals the cycles of transformation driving the disruptive digital journey at Scotiabank Peru, the country’s second largest financial services group.
Welcome to the latest issue of Interface magazine!
A customer-centric vision is often an important factor in the journey towards a digital transformation where a commitment to continuous improvement can bring scalability and lasting growth. Interface taps the brains behind some of the biggest tech successes happening across the globe today…
Lucho Torres, SVP & Chief Digital Officer at Scotiabank Peru is on a mission to leverage the trust in a global banking leader founded in 1832 and lead a transformation to create “the most relevant, simple and fast digital bank for consumers and businesses” across Peru. “The challenge was to build a digital bank with scalability and sustainability. We have created a customer-centric value proposition by building and taking to the market our own digital platforms and financial products to deliver personalised and intuitive customer experiences.”
IBM
We speak with IBM’s AI & Data guru Jean-Philippe Desbiolles who gives us a fascinating overview of his book AI Will be What you Make of It: The 10 Golden Rules of Artificial Intelligence. “I am passionate about the fact that at IBM we are transforming businesses by leveraging technologies in a broad sense of the word. And one of those key technologies is Artificial Intelligence.” Listen to our podcast with Jean-Philippe here or you can watch it below…
Digital Transformation in healthcare, education and telecomms
Also in this issue, Michael Haenelt, CIO at the Weed Army Community Hospital tells us the story of the development of a state-of-the-art medical facility at Ft Irwin, in California’s remote Mojave Desert, where a commitment to digital transformation is at the beating heart of the organisation.
Our cover story reveals a massive procurement transformation programme at Zendesk
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Procurement transformation is the hot topic this month as we speak to Rendi Miller, VP of Strategic Sourcing and Procurement at Zendesk. Miller is a procurement evangelist and transformational leader who is clearly energised as she delivers meaningful change to the function at Zendesk.
“What I’ve always enjoyed about procurement is the visibility into what the entire company is buying, from Marketing creative services to IT and Engineering technology to office furniture and everything in between.”
“Procurement has insight to trends before they become mainstream that gives us the ability to research new partners, technologies and solutions to start addressing the needs of the business early on. Being in procurement offers an awareness to nearly every aspect of the company.”
According to Miller, trust is absolutely critical to success because without that, “there is no reliability, there’s no confidence and there’s no relationship”, says Miller. “That’s something I emphasise with my team. Trust must be earned, but trust is also given. I empower them to be the leaders that I’ve hired them to be…”
Elsewhere, we sit down with Procurement Excellence Lead at Antofagasta Minerals, Christophe Le Flech, to discuss the state of procurement in the South America mining industry, and the work he’s doing to make a difference. We also talk to Convex Insurance’s Head of Procurement & Tactical Change, Vivek Pai… and discuss diversity in the workplace with Silvia Simon, LATAM Procurement Senior Manager at Mercedes-Benz Brazil. Plus, we look at 10 ways to optimise your digital procurement scouting approach with ProcureTech.
It sounds like a strange parallel to draw, but when it comes to the implementation of a digital transformation project – specifically the automation of business processes – Chief Technology Officers (CTOs) and their senior counterparts could learn a lot from the Great Britain Cycling Team.
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Digital transformation, big data and Artificial Intelligence and like phrases used before them, ‘automation’ has grown to become quite the buzzword in the world of business. In fact, there’s now so much talk about the use of technology to ‘streamline operations’, that automation is almost an unattainable panacea in the eyes of many – even in the tech sector where organisations should perhaps know better.
Yes, at an enterprise level, there are some corporate giants thinking big and really nailing it. Likewise, there are some vast organisations with dedicated project teams and six or seven-figure budgets, that become so shackled with scope creep that their automation aspirations remain nothing more than pipedreams.
There are also smaller – and often nimbler – businesses that would be ideally placed to implement automation-led initiatives large and small, but they simply don’t know where to start. Their CTO may have an articulate vision and the ‘toolkit’ to achieve it, but the all-important buy-in from the wider management team – if not the rest of the organisation – doesn’t exist.
It’s certainly a mixed bag, but it needn’t be such a minefield. This narrative will be ‘preaching to the converted’, for many CTOs. So what’s the answer and what will finally stop holding digital transformation projects back?
The aggregation of marginal gains
Organisations embarking, from scratch, on a quest for greater automation, need to stop worrying about moving mountains from day one. Instead of focusing on the entirety of what’s possible, there is arguably more value in breaking the job down into actionable and achievable component parts.
In this respect, much can be learned from Sir Dave Brailsford, head of British cycling, who took the long-suffering team from winning only one gold medal in 76 years, to seven at the 2008 Beijing Olympics – an achievement mirrored in London four years later.
Aware that aiming for gold felt like a daunting and perhaps even impossible plight, he applied the theory of marginal gains to the sport. In other words, he deconstructed everything to create a checklist of micro tasks and concentrated on improving each element by just 1% to secure a significant aggregated performance increase. The mentality centred on progression, not perfection.
Likening this to automation in business may seem like a stretch, but the same principle applies. The possibilities that automation can unlock are almost endless, so to cover everything will probably never be feasible. But by making individual systems and processes more ‘joined up’ with digital transformation – as well as quicker and slicker to execute, with an eye on best practice throughout – means even 1% efficiency gains will soon add up.
Removing digital silos
Some businesses may have far to travel on their automation journey, whereas others may have already made a start by ‘thinking digitally’.
This is something at least, because the digitisation of processes represents an important step. But what happens if these tools and technologies continue to exist on ‘digital islands’, with varying degrees of customisation and few – if any – ‘bridges’ between them to enable the data to do what it needs to. If someone must pull all the strings to make multiple products work together – with a questionable degree of effectiveness – there remains much to do.
The key to automation is to define the process that will spontaneously enable widget A to press buzzer B that activates application C and produces data point D – and so on – digital transformation!
Everything needs to work together, much like a team. And it’s OK to start small.
In simplistic terms, a business may decide to outsource its mailing so it’s saving time – and money – that would otherwise be spent licking stamps! This soon outweighs the cost involved.
But automation can be far more sophisticated too, of course. An email marketing platform can talk intuitively to a CRM tool as a sales pipeline advances, for example, before auto-updating a billing engine when a deal converts and triggering a conversion report to better understand ROI.
Without this automation, people involved in any one part of the process would still have confidence the data existed in there. However, the time otherwise required to uncover it, and then manually push it through the system, could mean the insight soon becomes obsolete and the associated opportunity is consequently lost. The real-time nature of the intel is where the value lies – much like the of-the-moment performance of the GB Cycling Team – hence the beauty of triangulating these multiple elements to create a truly integrated eco-system.
Is Digital Transformation only for big players?
In saying all this, one of the most important points to perhaps note is that automation shouldn’t be feared. Digital transformation is not necessarily a complex process that lies only within the reach of gigantic corporations with equally large budgets. Yes, data volume makes an investment in automation easier to justify. And a degree of technical competence is needed to orchestrate the integration of tools that lead to a super-slick outcome. But it needn’t cost the earth. For senior professionals who have perhaps worn the t-shirt a couple of times over, it’s better to communicate that – making it relatively easy to move forward as a result.
Secondly, automation is not trying to rid people of their jobs and replace them with ‘robots’ – a fear that seemingly shows no sign of fading. On the contrary, at a time when employees are becoming increasingly discerning about their workplace fulfilment levels, it can liberate them from burdensome, administration-centric tasks, and free up their time to focus on activities that make better use of their skills – boosting both productivity and engagement as a result.
Thirdly, the benefits associated with automation aren’t isolated solely to staff motivation and workplace efficiencies. Automation – or certainly, an automation-savvy mindset – can become the lifeblood of a firm’s scale-up strategy, which empowers the business to grow at speed, with a constant eye on cost control and service levels too. In the current economic climate, this agility – not to mention bottom line protection – has arguably never been so important.
by Terry Daniell, Operations Director at Trenches Law
Google, BT and DCMS among over 1,000 organisations offering free mentorship to independent organisations through Digital Boost
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Digital Boost, a new platform connecting organisations with digital skills founded by serial entrepreneur Sherry Coutu CBE, has today set out a bold ambition to digitally upskill 500,000 women from female-led organisations by January 2022, with 200,000 of those from BAME backgrounds. This comes as recent research revealed that 97% of charities feel insecure about their command of digital skills, while a survey conducted by BT and Small Business Britain found that 63% of small businesses lack confidence in future-proofing their business.
Digital Boost helps small organisations access digital skills through unlimited free one-to-one mentorships delivered by volunteers at some of the world’s most respected organisations including Google, DCMS, Visa, BT and The Big Lottery. Digital Boost is also working with its partners to offer specialised workshops and access to short online courses to its learners.
Since its launch in June 2020, Digital Boost has mentored more than 2,000 small businesses and charities. It currently has 1,600 partners listed on the platform and has successfully delivered multiple one-to-one mentoring sessions.
Sherry Coutu CBE, founder of Digital Boost, said, “We’re proud to work alongside our valued partners to mentor at least 1 million people who work for small businesses and charities by 31st January 2022, of which 20% will identify themselves as BAME and 50% will identify themselves as female. With our enhanced digital platform that offers unlimited mentoring support as well as commercial partnerships for potential corporates, we believe we can significantly boost the revenues of female-led businesses”.
As a beneficiary of multiple mentoring sessions, Amanda Mann, founder of Mann’s Cookies, said: “Mine is a Covid-19 business. I couldn’t imagine I would have so much fun and meet such amazing people but I didn’t have any business experience so I am so grateful I found Digital Boost. They were brilliant on our mentoring calls and they were great at helping me get to grips with the mechanics of business, showing me how to deliver great customer service and sharing tips on keeping up my social media presence.”
Three years on from Open Banking launched in the UK, let’s look at what we’ve done and where we can go from here…
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Earlier this year, UK Open Banking celebrated three years. Since 13 January 2018, regulated third-party providers have been able to integrate with bank APIs to access customers’ financial data, in an effort to break down the barriers standing in the way of seamless data sharing.
The overarching goal of this new regime was to give consumers and businesses greater visibility and control over their finances, with technology at the forefront of this mission. Specifically, the pioneering Open Banking initiative was created to enable financial technology (fintech) providers to bring innovative new propositions to the SME and consumer market.
By extension, the users of Open Banking would benefit from products that were better suited to their unique financial situation, enabling them to compare available products in order to find the best deals on the market. So, as we reflect on three years of Open Banking, the question is: how much progress has been made, and what’s in store for the future?
Increasing collaboration through innovation
The introduction of a new requirement for all UK-regulated banks to allow customers to share their financial data with authorised third-party providers introduced a new era of collaboration within a previously segregated market.
Joined by one overarching mission – namely, to drive innovation and deliver the best possible customer experience – large banks and fintech startups began forming valuable partnerships. Thanks to more efficient data sharing, incumbents, for instance, have been able to integrate propositions developed by fintechs into their own platforms, in an effort to better meet the evolving needs of the customer.
The benefits to the customer are evident: a more interconnected and open financial ecosystem, which enables them to browse available products and access the right services for their needs.
Since its inception, Open Banking has served to shift the power to the customer and increase competition within the sector. By utilising new apps and digital platforms, banking customers now have access to a fuller and clearer view of their finances. This allows individuals to budget more effectively, switch products more easily, and generally make more informed decisions.
Increasing uptake
Since the initiative was launched in 2018, Open Banking adoption among UK consumers and businesses has surged. While generating awareness about its benefits has been a slow process (a recent PwC study found that only 18% of consumers were aware of what Open Banking means for them), the COVID-19 pandemic has driven Open Banking usage.
Today, over two million users utilise Open Banking-enabled applications and services. This number has doubled since January 2020, with the pandemic likely having a strong influence on the rate of uptake.
As disruption took hold and personal finances took a hit, many people turned towards online banking and money management apps, in search of tech solutions that could bolster their financial confidence. Since the first lockdown in March 2020, almost one in five (17%) of UK adults have started using an online banking service to help with their money management goals, with this figure rising to 45% among 25-34-year-olds.
Without the advent of Open Banking, the accessibility and value of such solutions would be questionable. After all, many of these fintech solutions use Open Banking to connect directly to users’ bank accounts to provide a more tailored service.
At the same time, it has also enabled financial services providers to obtain an accurate and up-to-date view of an individual’s financial situation, as well as their past and present behaviours, in order to deliver more personalised guidance.
How will Open Banking develop?
Open Banking today generally covers personal and business current accounts, credit cards and online e-money accounts. In the future, the concept will extend to cover all financial markets – from pensions to investments and insurance.
Now that we have built the underlying infrastructure, it will become easier to build on top of this. More complicated use-cases of Open Banking will begin to develop, with competition from non-traditional players such as fintechs and challenger banks stepping in to provide a range of new services – particularly within industries that previously strayed away from large scale digital transformation.
As the ability to let information flow between applications continues to improve, new products and iterations of existing offerings will be built, integrated and modified at a much greater speed than before. We will shift away from a closed banking system to one that encourages new aggregators, service partners, and payment providers to add value to existing businesses models, and in doing so, create a range of new customer-centred financial services.
Examples of innovations that we are already seeing include services that provide personalised advice to banking customers looking to improve their credit score, and applications that enable employees to save directly from their salary.
We’ve come a long way in the Open Banking revolution, giving consumers and businesses greater control over their financial lives and the ability to choose products and services that work best for them. As we progress further towards Open Finance, this initiative will give customers greater influence over a wider range of their financial data, and offer access to enriched financial services.
Ammar Akhtar is the co-founder and CEO of Yobota, a London-based technology company. Founded in 2016, Yobota has built a fast, flexible, cloud-native core banking platform, which allows clients to create and run innovative financial products. You can follow Yobota on LinkedIn and Twitter.
A business that’s fully and passionately dedicated to ¨promote beauty to achieve personal fulfilment¨, Belcorp is creating something new for itself that’s not a cultural reset, per se, but a cultural reboot. The message behind this Latin American beauty corporation, which operates across 14 countries, remains the same – but it’s now better, stronger, even more deeply ingrained in each and every fiber of the business. What is, on the face of it, a digital transformation for Belcorp has actually been a full people-centric makeover from the inside-out – it just happens to have been driven by technology. With his hand on the tiller is Venkat Gopalan, Chief Technology, Data & Digital Officer for Belcorp, who stepped in 18 months ago to help push the digital plan, resulting in a hard press on the fast-forward button for the company’s development.
Elsewhere, we catch up with Lori Snyder CIO, Information Systems & Technology at the State of Nebraska for the Department of Health and Human Services, to see how the state is using digital strategies to battle COVID-19. Plus, we have exclusive interviews with former Apprentice winner Mark Wright, Director of Climb Online and James Shanahan, CEO Revolut Singapore. We also list 5 essential tips to building an intelligent workplace.
Almost two thirds received additional funding to accelerate initiatives…
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Coeus Consulting, an award-winning independent IT advisory, today announced findings from its annual CIO and IT Leadership Survey 2021. The survey of senior IT leaders explored how they have had to urgently prioritise and accelerate programmes during the pandemic over the past 12 months.
Remarkably, over half (53%) claimed they were able to implement a strategic shift of their entire business operations to digital and almost three quarters (68%) of respondents either strongly, or generally agreed, that acceleration helped them to digitalise more of their operations.
Half of organisations were still amid their digital journeys or in the planning stages when they had to re-prioritise and pause non-urgent initiatives to focus on operational continuity during the pandemic. In fact, 70 per cent of organisations surveyed prioritised end user solutions (EUS) such as remote working, 52 per cent prioritised operational stability, closely followed by cost optimisation (50%).
“The proficiency that businesses have demonstrated in their prioritisation and acceleration of critical initiatives is a huge triumph. Being able to re-direct resources and cutting down their time to market in digitalising the organisation is no easy feat, particularly in the throes of a global pandemic” said Ben Barry, Director, Coeus Consulting.
Despite this, the speed at which organisations were forced to adapt meant that short term and tactical business decisions had to be made, with over three-quarters (78%) of respondents stating they had implemented ‘quick fix’ solutions.
“Businesses will need to revisit these over the coming months to build on these capabilities with more permanent solutions for the future and ensure that all changes made in response to the pandemic are assessed to identify any tactical risks accepted and create a plan to mitigate, update or accept all of them” Barry continued.
As a result of deploying ‘quick-fix’ solutions, organisations were confronted with operational, as well as strategic difficulties including agreeing priority changes, implementing the solution and post implementation, each of which encompassed numerous challenges.
Challenges in agreeing the priorities for 2020 included security, which was key for over half of the respondents. This was followed by governance constraints (44%), business risk aversion (37%), employee reluctance/education (32%) and board level resistance (22%).
Fifty per cent of respondents cited cost of implementation as the biggest challenge, followed by delivery of bandwidth (42%), integration difficulties (41%) and lack of skills and expertise (37%).
Post implementation challenges included respondents experiencing negative process impacts (53%) and increased operating costs (45%). Customer and user perceptions were also adversely affected for almost 40 per cent as organisations tackled uncertainty and their own internal changes.
These factors were likely exacerbated by the fact that business and IT leaders had to make these decisions rapidly and in a short time frame, having to balance risk with maintaining operational continuity.
Additionally, 82 per cent agreed that business and IT leadership played a key role in improving ways of working and minimising disruption across the business. Furthermore, almost 70 per cent of respondents stated that IT leaders were crucial in accelerating large scale deployments in EUS and about a third prioritised initiatives in improving customer experience, increasing revenues and developing or changing products.
Almost two-thirds of organisations noted they had received additional funding to help accelerate priority projects, but a large majority of those surveyed (63%) agreed that re-scoping, undoing projects, renegotiating and stalling contracts, as well as redeploying resources, will likely cause ongoing business impacts, and we would expect the cost of doing so to be significantly high.
Despite challenges with costs, the IT budget expectations show that CIOs across all sectors are expecting their budgets to remain untouched (28.6%) or increase (22.1%) as businesses recognise that IT is a critical part of delivery in all sectors.
Barry concluded – “As we move forward, organisations must reflect on these implementations, challenges and the role of IT as they look to establish a more permanent shift to a new hybrid workforce in the future.
IT Leaders and their teams have had a great opportunity to show their value and will continue to drive the strategic agenda in 2021 and beyond. This increased visibility and the business’ dependence on IT has given them an opportunity to demonstrate that IT leads in terms of business transformation, and should be funded accordingly.”
Connected technology is of critical importance in this process, and is likely to be one of the key economic drivers going forward.
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Although we have bid a grateful farewell to 2020, the disruption and uncertainty we experienced are spilling over into 2021. If there is one thing that we learnt last year, however, it’s that we need to accelerate the pace of transformative change. Connected technology is of critical importance in this process, and is likely to be one of the key economic drivers going forward.
The digital and physical world continue to converge
2020 symbolises a turning point of adaptation to digital interactions in everyday life, be it working from home, ordering groceries or online schooling. Consumers in 2021 and beyond expect to experience a seamless blend of intertwined in-person and online interactions along the customer journey.
In the manufacturing world, we can expect the rapid growth of AI, IoT and other industrial automation technology, especially since human resources become less accessible and reliable.
Technology’s place in the boardroom
In 2020, technology proved to be a competitive advantage for some companies and a threat to the survival of others. In particular, the failure to have a genuine eCommerce presence cost many companies dearly. As a result of this, the lines between technology strategy and corporate strategy are beginning to blur. In order to survive and thrive, organisations need to assess their current tech capabilities and expand on future possibilities.
Data-driven decision making
To prepare for current changes and an unknown future, corporate and technology strategists need to have access to accurate data to analyse, identify trends, reduce wastage and inform their strategies.
The first step in this process is accurate data collection. This is enabled by Internet of Things (IoT) sensors and networks that are able to report on virtually anything, 24/7. The next step is the ability to analyse this data. Again, technology platforms with advanced analytics capabilities, automation and artificial intelligence (AI) are making meaningful analytics a possibility. By using tools such as cloud-based dashboards, organisations have the ability to:
– Identify internal and external strategic forces
– Inform decisions
– Monitor outcomes
– Develop strategies continuously and dynamically
Information technology accessed by everyone, but trusts no-one
Cloud-first, cloud-only
One of the first steps in digital transformation is modernising legacy enterprise systems and migrating them to the cloud. The adoption of cloud-based applications became particularly important in 2021, with a large proportion of the office-based workforce operating from home. In order to continue with business as usual, employees needed access to critical software and collaborative working. In 2021, organisations will adopt a cloud-first mentality when it comes to building or upgrading technology infrastructure.\
Zero trust is a must
In an increasingly digital world, cybersecurity is high up on the list of organisational risks. Zero trust security (which involves security measures that require everything to be verified) is shaping cybersecurity initiatives. In a zero trust architecture, there is no inherent trust, and every access request should be validated based on:
– User identity
– Device
– Location
– Any other variables that provide context to each connection
Access to data, applications and workloads is provided based on the principle of least privilege.
For most companies, the creation of a zero trust architecture will require third-party assistance from digital transformation experts in IoT spheres.
Supply chains move to the front office
Supply chains were once seen as ‘behind-the-scenes’ necessities. When COVID-19 hit, it quickly became evident that even the most resilient and agile supply chains were only as strong as the weakest links.
A recent survey of supply chain professionals found that 97% of respondents said that their organisations experienced disruptions related to COVID-19. The same survey found that 73% of respondents are now planning major shifts in the way they approach procurement and supply chain management.
In 2021, more and more organisations are realising that the way they conduct their supply chains can actually become a competitive differentiator. Accelerated by the COVID-19 pandemic, customers are increasingly looking for more streamlined supply chains, fast, contactless delivery and greater traceability. In addition, organisations are realising the value of data extracted through the supply chain network.
There is a growing trend to fit products with IoT-enabled sensors that provide 24/7 asset visibility from the source to the hands of the consumer. The ability to capture larger volumes of real-time data allows supply chain operators to mine this data for operational insights.
In addition, the use of drones, condition monitoring, robots and image recognition are making physical supply chains more effective, efficient and safer.
Contactless customer service
Delivery and shipping
Born out of customer desire to minimise physical contact, contactless delivery options will continue to develop in 2021. Contactless delivery is made possible by artificial intelligence-based applications and robotics.
Telemedicine
To minimise the risk of COVID-19 exposure in the healthcare sector, practices have started implementing more telehealth offerings. These include:
– Remote/video consultations
– A.I-based diagnostics
– No-contact medication delivery
Autonomous vehicles
Autonomous driving technology is set to make significant progress during 2021, with major manufacturers such as Honda and Ford announcing plans to mass-produce autonomous vehicles and launch autonomous driving ridesharing services.
Zero food waste
Food security came to light in the midst of supply and demand challenges brought about by the coronavirus in 2020. In 2021, reducing food waste is moving higher up the agenda.
The UN’s Food and Agriculture Organisation reports that more than 30% of the world’s food is lost or wasted every year. Smart technology can be used to reduce food waste, increase food security, and assist with better distribution of food resources worldwide. For example, automated, sensor-based inventory management and replenishment ensures that the correct quantities of food are ordered at the right time, completed without human intervention and inaccuracies.
Blockchain
And, finally, no series of predictions would be complete without a quick comment on blockchain technology. For the most part, the application of blockchain tech is overshadowed by its “poster boy” application—Bitcoin and other crypto currencies. However, as we move into a smarter age, the process accountability distributed ledger technology guarantees will ensure that 2021 will see greater transparency on ordering, delivery and workstream management, along with a host of tradable asset ledgers coming online. All of which will improve efficiency across operating lines and help cut waste.
Technology and transformation 2.0.2.1
These trends predicted for 2021 are connected by the thread of digitalisation and connected technology. The need for this transformation was accelerated by the ‘new normal’ necessitated by the coronavirus pandemic, which set the world on a course towards powerful new digital capabilities. Daunting as this may seem, having the right technology partners on board helps organisations take advantage of the critical technology trends of today.
Two-thirds of accounting departments still process invoices manually: only 15% are fully paperless
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Despite the increasing need to process invoices remotely as more employees are urged to work from home, the majority of companies are still lagging behind in automation implementation. Accounts payable departments are still largely processing invoices manually, according to a survey of accounting and finance professionals released today by Ephesoft, Inc.
The survey gathered responses from 200 accounting and finance professionals from 26 countries. Key findings include:
Distributing or processing paper documents
Businesses are shifting to automation of their processes – especially for high-value, high-volume documents such as invoices. However, the survey results indicate that companies are slow to change when it comes to digitally transforming invoice processing and other financial documents.
● Only 15% of respondents said that their organisation is fully paperless, which means the majority of businesses (85%) are not.
● Of those who are not, just slightly over 50% are actively pursuing a paperless environment.
● One-third (33%) of companies are predominantly paper-heavy, still far from intelligent automation.
With an average cost to process per invoice at about £11, a lack of automation is likely to keep company growth limited, leaving room for a significant increase in productivity. Modern automation has been proven to cut costs significantly, often by 80% or more, which can be reinvested in other areas.
Current technologies
When asked whether their businesses currently have document management, workflow, AP automation, RPA or artificial intelligence technologies in place, a majority of companies report having some type of document management and workflow tools system in place, but AI applications are still under-utilised. Here’s the breakdown, further showing a lack of current automation tools:
● Less than one-third (30%) employ accounts payable automation.
● Only 12% utilise RPA tools and just slightly less (11%) report using AI.
While these findings are understandable and relatable, Ephesoft predicts that new AI-powered low-code/no-code, cloud technology, which is evolving at a rapid pace, will remove barriers to entry into AI.
The AI Journey
When the question was posed, “What is your organisation’s location on the AI journey?” responses were split, with 42% saying they were in the planning stage and 40% saying they were not planning on implementing AI tools at all.
We can conclude from the data that AI has still not been widely adopted, but many organisations have plans to invest in it.
“This survey confirms that the accounting profession has lagged in adoption of newer technologies such as AI/ML, cloud and low-code/no-code architecture likely impacted by traditionally long implementation cycles and complex integrations,” said Naren Goel, chief financial officer, Ephesoft. “The accounts payable space is an ideal example where manual steps like entering invoices into an ERP system can greatly impact efficiency, so it’s exciting that we are finally starting to see innovation in this space with point solutions that are up and running in hours, eliminate manual tasks and allow accounting professionals to focus on higher value-add functions.”
The survey on digital transformation, AI, technology and automation was conducted on Nov. 5, 2020, by Accounting Today on behalf of Ephesoft. Responses are from 200 accounting and finance professionals from 26 countries, including CEOs, CFOs Partners, CIOs, CTOs, CPAs, accountants, controllers, auditors and consultants in a variety of industries, including banks, energy, government, healthcare, technology, accounting services, airlines, auto, education, large global consultancies and many others.
Industry experts say that INSTANDA’s no code platform and ADROSONIC’s insurance domain expertise will empower insurers with the agility to price risk in ways that meet the client’s needs in a changing post-Covid-19 world.
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In a significant development to accelerate the ongoing digital transformation in the insurance industry, INSTANDA, a UK-based SaaS Insurance software platform has entered a partnership with ADROSONIC, a digital consulting firm. Industry experts say that INSTANDA’s no code platform and ADROSONIC’s insurance domain expertise will empower insurers with the agility to price risk in ways that meet the client’s needs in a changing post-Covid-19 world.
Delighted over the tie-up, Tim Hardcastle, the CEO & Founder of INSTANDA, said: “Partnerships play a key role in the insurance industry, not merely for the growth and expansion of the business involved, but also for the transformation of the industry. The new partnership with ADROSONIC is exciting as it provides capability to new markets in North America, India, Middle East as well as Europe.”
Mayank, CEO & MD, ADROSONIC, said that the tie-up would provide insurers with innovative digital product and customer propositions for new markets as well as liberate insurers from inflexible legacy tech and from high-risk, high-cost and multi-year change programs.
“Given the paradigm shift that the market is undergoing, partnership models need to demonstrate not just agility and flexibility but to do so with high quality execution. ADROSONIC and INSTANDA have an outstanding track record of delivery so I am excited at what we can offer insurers to realise their ambitions and bring new ideas to market.” Hardcastle added.
“An unprecedented event like Covid-19 has left a sudden yet profound impact on the Insurance Industry and their IT Systems, as they are now subject to rigorous scrutiny following the rapid shifting of entire workplaces online that was forced due to the pandemic,” Mayank said.
“As the key decision-makers respond to the new market demands and opportunities, they are starting to question the limitations of their existing processes and legacy systems, they also had to reassess the cost base turning to a more cost-effective and agile platform which enables them to provide quicker and more responsive service to their customers and clients. In such a scenario, INSTANDA’s no code platform coupled with ADROSONIC’s domain expertise along with a wide range of digital accelerators including RPA, Data Analytics, & CRM are key in liberating insurers from inflexible legacy technologies.
These accelerators will power transformation across organisations looking at improving their ROI by dramatically reduced product launch times, underwriting and distribution costs and an unrivalled customer experience,” he concluded.
INSTANDA works with the leading carriers, MGAs and brokers in UK, Europe, North America, LATAM, Africa, Middle East and Australia. INSTANDA is the Insurance Industry’s first no-code business platform and allows insurers to break into new markets as well as overcome the drawbacks of legacy IT systems and embrace the benefits of digital transformation.
James McLeod, EMEA Director, Faethm, the article looks at how AI and automation have come to be perceived as a threat to human employability much more than any other revolution-driving technology
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Technology, AI and societal change are the two major hallmarks of industrial revolutions. It would be remiss to discuss the first industrial revolution, for example, without reference to steam power and the migration of the workforce from the country to the city, or the third industrial revolution without reference to the internet and rapid globalisation.
Today, as AI/automation and the decentralisation of labour push the world toward the fourth industrial revolution, a core characteristic of these changes has become clear: an acceleration in the speed at which specific skills rise and fall in demand. Over the past 100 years or more, the length of these cycles has dropped from decades to just a matter of years, creating one of the biggest employability challenges for businesses and individuals alike moving forward.
To stay abreast of change, companies must fundamentally change the way in which they look at skills, training and career development. This isn’t just another story about technology and AI creating as many jobs as it invalidates, but rather a need to consider how existing roles will evolve and how people in at-risk jobs can easily transition into roles where they continue to add value on top of technology:
– What needs to happen? Career development must no longer be seen as horizontal (i.e. whereby individual workers refine a particular set of specific skills over the course of their careers and/or lives). Instead, careers must also follow a lateral trajectory, expanding not just upward, but outward into new skill areas.
– How can this be achieved? Each role will have a set of transferable and non-transferable skills. By identifying which skills sit across different roles, employers can corridor existing employees into new roles lessening the need to search for brand new talent.
– Why should employers do this? Trying to keep abreast of demand for new skills by constantly hiring new talent is a costly and unsustainable strategy. Moreover, by looking at how individual processes translate to value can help eliminate bloated processes and release capacity, making roles not only more relevant, but more efficient.
The ‘Financial Sector, Threat Landscape 2020’ report revealed five top security challenges that the financial sector are currently facing, the risks of future threats, and how to spot these risks before it is too late. Here, CPOstrategy takes a closer look…
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We are no stranger to the notion of cyber security, but one industry that suffers the most from cyber security threats is the financial secretary. Key security measures within the sector have evolved dramatically with the likes of key codes, two factor authentication, voice ID, behavioural analysis, one-time passcodes, protective messaging and digital fingerprinting.
1. Ransomware
Amazingly, the term “ransomware” was only added to the dictionary three years ago. In that time however, ransomware has increased dramatically in terms of the frequency of incidents and the range of methods used to conduct them. Let it be known that the attackers are extremely sophisticated. Once they have your data, who’s to say that your data will be given back or decrypted even if you pay up. Worse still what’s stopping them coming back to attack you again? The report found that once an attack is made, the bad actor will sell the details on to their associates to go after the victim again after deployment, because the payload can still be there, activated and deactivated.
2. Internal Threats
The report takes a look at the Verizon, 2020 Data Breach Investigations Report (DBIR) where it shows that ‘employees’ mistakes account for roughly the same number of breaches as external parties who are actively attacking’ the organisation. Now isn’t that terrifying? Misdelivery within the company, by which information has inadvertently been sent to the wrong person, stands tall as one of the most common issues when it comes to the notion of insider threats. Next time you forward an email or send one to the wrong person/recipient, click on the wrong mailing list, that’s a misdelivery. In the interests of fairness, misdelivery is almost always accidental and non-malicious, but the effects can be devastating. Especially if sensitive data is inadvertently shared to the wrong recipient.
3) App Developments
There’s an app for that. There really is. Apps in the investment and finance space have grown substantially in 2020 which is of course a good thing, as the ability to invest online is quick and easy, and accessible to all. But, with demand comes rushed development. Many of these apps were developed quickly and quite frankly are not ready for cyber-attacks. So that means no two-factor authentication, no protection from appropriate regulations, are not patched or maintained properly, and do not have contingency plans in place to mitigate the effects of a cyber-attack. What that means then is personal information of app users is relatively easy to steal and sell. This can be done by creating duplicate fraudulent apps to trick the user. On these duplicate apps, the imagery and language of the genuine app is mirrored. Once the personal information is supplied, all the money involved (real and virtual) is up for grabs. And so begins the circle of ransomware life.
4) Third-Party Risks
Few organisations work on their own. Quite rightly too. Think about third parties that they use. Vendors, partners, email providers, service providers, web hosting companies, law firms, data management companies, subcontractors. The list goes on. They are all essential to business operations and a lot of these third parties share IT systems and even sensitive information through legal teams so it goes without saying that third parties may very well be an open backdoor into your financial systems for attackers to infiltrate.
5) COVID-19
Yep, even cyber crime has been affected by COVID. It is that unavoidable. Cyber criminals are continuing to target the financial sector even during the pandemic. There has been quite the spike in cyber attacks on banks, financial organisations and the third parties connected to them. Going back to simpler times before COVID-19, if an attacker wanted to sabotage a company or steal data, they would target the business itself. They’d aim their sights at the website, the social accounts, the logins and all their vulnerabilities. In response, organisations had counter measures in place. But now, you just need to target a single remote worker and the house of cards comes tumbling down.
With virtually all companies looking at AI, what are some of the key risks they need to consider before implementation?
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Today virtually all companies are forced to innovate and many are excited about AI. Yet since implementation cuts across organisational boundaries, shifting to an AI-driven strategy requires new thinking about managing risks, both internally and externally. This blog will cover “the seven sins of enterprise AI strategies”, which are governance issues at the board and executive levels that block companies from moving ahead with AI. by By Jeremy Barnes, Element AI
1- Disowning the AI strategy
This is probably the most important sin. In this case, a CEO and board will say that AI is a priority, but delegate it to a different department or an innovation lab. However, success is not based on whether or not a company uses an innovation lab—it’s whether they are truly invested in it. The bottom line is that the CEO and board need to actively lead an AI strategy.
2- Ignoring the unknowns
This happens when companies say they believe in AI, but don’t reach a level of proficiency where it’s possible to identify, characterise and model the threats that emerge with new advances. Even if it is decided not to go all-in on AI innovation, it’s still important that there is a hypothesis for how to address AI within a company and an early warning system so the decision can be re-evaluated early enough to act. Being a fast follower requires as much organizational preparation and lead time as leadership.
3- Not enabling the culture
The ability to implement AI is about an experimentation mindset. That and an openness to failure need to be adopted across the company. Organisations need to keep in mind that AI doesn’t respect organisational boundaries. Most companies want high-impact, low-risk solutions that could simply lead to optimising, rather than advancing new value streams. It is hard to accept increased risk in exchange for impact but it will come as part of the continuous cultural enablement of an experimental mindset.
4- Starting with the solution
This is the most common sin. It’s important to be able to understand the specific problems you’re trying to solve, because AI is unlikely to be a solution for all of them, and especially not blindly implementing a horizontal AI platform. Have the conversation at board level to ensure that an overarching AI strategy, and not simply quick-fix solutions, is the priority.
5- Lose risk, keep reward
As mentioned in the third sin, it is natural for companies to want to implement AI without any risk. But there is no reward without risk. A vendor motivated to decrease risk will also decrease innovation and ultimately impact by making successes small and failures non-existent. AI creates differentiation only for companies that are willing to learn from both their successes and their failures. A company that doesn’t effectively balance risk in AI will ultimately increase its risk of disruption.
6- Vintage accounting
Attempting to fit AI into traditional financial governance structures causes problems. It doesn’t fit nicely into budget categories and it’s hard to value the output. The link between what you put in and what you get out can be less tangible or predictable, which often makes it harder to square with existing plans or structures. Model the rate of return on AI activities and all data-related activities. This demands that these activities affect profit (not just loss) and assets (not just liabilities).
7- Treating data as a commodity
The final sin concerns data and its treatment as a commodity. Data is fundamental to AI. If data is poorly handled, it can lead to negative impacts on decision-making. Data should be treated as an asset. The stronger, deeper and more accurate the dataset, the better models that you can train and more intelligent insights you can generate. But, at the same time, when personally identifiable information is stored about customers, it can be stolen, risking heavy penalties in some jurisdictions. You need to build towards data from a use case rather than invest blindly in data centralisation projects. So, now you know what not to do. Here are some of the simple things that you can do to move ahead. First, talk to your board about how long it will take to become an AI innovator, modelling it out, rather than simply discussing it conceptually.
Second, prepare for change and put in place monitoring. AI shifts all the time, so you’ll want to regularly check in to adjust and pivot your strategy. It’s important to develop a basic skill set so you can redo planning exercises with your board. Third, model out risks in both action and inaction. But don’t model them in a traditional approach, which is to push risk down to different business units and then compensate those units for reducing risk rather than managing trade-offs. Instead, view those trade-offs in terms of risks and rewards, and start to think about how you are accounting for the assets and liabilities of AI. Ultimately, you want to start to model what is the actual rate of return for all these activities that you are doing. Then benchmark it against what you see in other companies from across the industry, and that will give you a good picture of the current situation and where to go.
With a rise in immersive training and workouts on demand, connectedness matter most…
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In what is almost a redundant statement, due to the very obvious nature of it, technology has taken over every facet of the modern world. From the way we eat (ordering a takeaway or watching a YouTube cooking tutorial) to the way we purchase the very clothes on our backs (via H&M, Zalando etc.), technology is right there as an enabler. In fact, in 2020, global retail sales are projected to amount to around $26.tn dollars, with an estimated 1.9bn people worldwide purchasing goods (including food) or services online.
Go back just one year to 2019, and e-retail sales surpassed $3.5tn worldwide. The fact of the matter is, technology has made this possible and it will continue to drive these numbers to almost unimaginable levels. The really fascinating thing about this however, particularly in a year beset by lockdowns and restricted movement outdoors, is how many of these transactions were made from home and how much of that $3.5tn has been spent in the palm of our hands?
In all the talk of global markets and industry being disrupted and revolutionised by technology we often focus on those trillion dollar ones because they are the traditional ‘big hitter’ industries. Over the past decade however, one industry sector has seen incredible growth all over the world and technology (to no surprise) has seen that growth take on a whole new level. In 2019, the global fitness and health club industry exceeded $96bn. There are more than 201,000 health and fitness clubs worldwide and more than 174mn global members. It’s clear to see; the health and fitness space is not to be sniffed at. One of the biggest, if not the biggest, ways in which technology has redefined the fitness industry is through on-demand services. Like everything else in our lives, we want it and we want it now. But for Jean-Michel Fournier, CEO of Les Mills Media, it’s important to remember what people want with their fitness experiences before getting lost on working out how to provide that to them through technology.
“We are more and more connected,” he says from his home gym in San Francisco. “Connection in fitness is very important. Being able to be part of a community and believing in something bigger than you is way more motivating than exercising by yourself and not being able to share what you achieve or what you’re doing. It’s about trying to connect with people who have the same objective, or same experience or someone who can advise you. So that community is very important and with technology now you’re able to be engaged and supported by your community, anywhere, anytime.”
That sense of a shared community, through health and fitness, defines the very core of Les Mills. Headquartered in Auckland, New Zealand, Les Mills is on a mission to create a fitter planet not by making people work out but by helping people fall in love with fitness so that they want to work out.
Les Mills provides workouts that are licensed by 19,500 partners in 100 countries around the world and has a tribe of 135,000 certified instructors to deliver the likes of BODYPUMP, BODYCOMBAT and GRIT workouts to millions of members. With the future of fitness merging between physical and digital, the company has led the charge in delivering immersive training and workouts on demand. This is where Fournier, a fitness fanatic and a student of Silicon Valley, looks to continuously drive engagement with members and it starts with that sense of connectedness and love affair with fitness.
“Actually, I don’t really care about technology. Technology for me is an enabler. Technology’s here to help improve the life of our community,” he laughs. “It’s really my very first company where I’ve seen how we help people to live a better life. To feel better when they wake up in the morning, and do the exercise and fall in love with our classes, where people are doing body pump and body combat on a daily basis and they share their pictures, their achievements through the community. It’s so exciting when I see that and that’s what feeds me, honestly.”
The health and fitness space is notoriously costly and often seen as a luxury, pricing people out entirely. So surely technology and on demand services would simply follow suit? Fournier recognises this, recalling the unfortunate passing of his father over the past few years and how that had made him rethink the role of technology in fitness. “Before my father passed away, he told me that he wished he could go back and be in shape and feel proud of his physical fitness,” he says. “That really impacted me. It made me ask one question; how can we help people get better access to fitness services. The answer is through technology.”
Fournier believes that technology is the key to democratising fitness services, making it truly available to everyone. Les Mills offers all of its fitness programs and workouts, together with advice and FAQs, through a simple and easy to use mobile and tablet app. This app will capture all kinds of data from its members and their activity and feed it back to them in a way that is personalised to each user. While we are competitive by our very nature and we do crave the shared community that Fournier speaks of, we all have our own personal goals and our own achievements that we strive for. But how can an app provide personalised experiences for well over a million users all over the world? The answer is, again, technology. Specifically Artificial Intelligence and Machine Learning.
“The technology allows us to think about things that are perhaps within our subconscious that impact our exercise,” says Fournier. “When are we most motivated to exercise? How does our sleeping habits impact our performance? At what point during a day am I going to get the best results? These are all things that AI and Machine Learning will allow us to think about and understand better. It’s really opening everyone’s eyes and making that process of falling in love with fitness that little bit more seamless.”
Machine Learning, while not a new concept, is still in its infancy in terms of global implementation. Fournier believes that we are “at the beginning of a tsunami” when it comes to Machine Learning and that when it does become a norm, personalisation will come naturally. He compares the concept of personalisation in fitness to that of other streaming on-demand services like Netflix. Personalisation in those platforms can only stretch as far as presenting films that you like based on your activity, or personal lists you create. In fitness, the variables are so sparse and unique to each individual that a “one service to many” approach simply will not work.
“Technology in the fitness spaces creates a sense of accountability with both the community and the coaches” says Fournier. “You are starting to see more and more coaching platforms out there and we are doing some experimentation with this at Les Mills, where people have a coach in their pocket. Now they are connected with the coach and the coach is going to communicate directly and check on your performance. They look at the data and see that you’ve done the workout and congratulate you for it. Then you feel good about it.”
Fournier admits that it also works both ways, thanks to those extremely different variables; “Say you haven’t done it, the coach can ask you why. It’s because you’re tired, or you’ve hurt yourself. The coach can then work with you to adapt the workout. So that’s going to create this accountability and technology is going to help to create this connection between your data and your community. There’s going to be this golden triangle of information here.”
The benefits of technology are clear to see; the personalisation of the user experience comes directly from it, so Les Mills should just go ahead and throw all of its eggs into the technology basket right? Wrong. Les Mills, since the very beginning back in 1968, is a business built on the foundations of family and community. Right from the top with Phillip Mills himself, to his wife Jackie and children Diana and Les Mills Jr, there is a culture that looks at fitness services and exercises and marries that with technology that can spread that culture all over the world. The technology will never drive the business, the community will. This in itself brings an interesting challenge to the table, yes Les Mills wants to serve the world and help each and every one of us, but it’s also a business and a business will also be driven by revenue and bottom line results through innovation. “So how do you innovate? You need to be sure you have a good understanding of the mission,” says Fournier. “At the end of the day if there are people out there fleeting the next best tech thing in fitness and they’re being more successful, good for them. At the end of the day the mission for Les Mills is not to conquer the world, or to be a dominant company. At the end of the day, we are here to really help people.”
Les Mills is driven by people, for people. That is abundantly clear. Personalisation is one challenge that the company faces and for the most part succeeds in, but what about the actual user experience? How easy is it for someone to log in to the CMS, search through the copious amounts of workouts and then stream those workouts in a truly seamless experience? Les Mills, like many businesses right now, works to provide an omnichannel experience for users so they can indeed access it anytime and anywhere. But omnichannel is a word that has fallen into the trappings of many other keywords in technology right now. How does the company look to move away from simply following a trend and offer a true omnichannel experience?
“It’s hard,” laughs Fournier. “Not everybody has an internet connection at 100 or 200 megabytes. Not everyone has the same bandwidth and capabilities to stream. These days there are a number of successful platforms out in the world, which makes it easier. Having streaming capabilities and adding a strong architecture while working with the best CMS platform out there is critical. Around four years ago, coinciding with when I came into the business, we laid down a very strong and robust platform that can support millions of recurrences and millions of subscribers, to be sure we can provide the quality that our users need regardless of their situation.”
The lines between health and fitness and digital are increasingly blurring and reaching a point as to where we may not be able to think about exercise and fitness without a livestream, at home experience. As with any technological shift, there is also a generational shift running alongside it. It isn’t simply a case of older generations of gym users and fitness professionals suddenly pivoting to digital or being alienated as the world around them becomes an increasingly digital one. As we have seen in many other industries, it is not that black and white and it comes as no surprise that this is something that Les Mills understands more than most.
“If someone wants to enjoy our content on an app, they can. If they want to enjoy our content in a live streaming class, they can. If they want to enjoy our content in a live class with a real instructor they can do it as well,” says Fournier. “At the end of the day we are a content provider. What we do is create amazing fitness choreography linked to music and we do so in a way that is truly accessible to all and for all.”
In 2020, the world was forced to stand still as it became gripped by the coronavirus pandemic. With lockdowns and restrictions put in place to protect the lives of people the world over, this closed a lot of doors for the likes of restaurants, retail stores and yes; gyms and fitness centres. One could be forgiven for thinking that Les Mills, pioneers in the streaming on demand space for fitness, were well prepared for this and suffered minimal impact from this. “Our customers are those fitness clubs and the community centres that provide Les Mills classes to their communities,” reflects Fournier. “So we were hurt there. Everybody moved to digital, which was great and thanks to the great work we did in previous years in building a robust platform we were able to absorb the millions of recurrences into our platform and keep the right level of stability.”
For Les Mills, it has always been about the community and when that community is forced to stay indoors and to stay away from the physical connectedness, the focus changes slightly. Connected community has always been a cornerstone of Les Mills, but in these difficult times the company changed tact and became much more connected to its community than ever before. “I’m very proud of the Les Mills team because we really focused on what was important. The focus was really on responding to the customer needs,” beams Fournier.
“People wanted more connection, so we generated some live streaming classes. They wanted to talk with their instructors live, so we did a lot of live Q&As that were pretty amazing.”
Fournier points to one example where the Program Director, Glen Ostergaard, presented a live streaming class to over 25,000 people worldwide. Just a few short years ago, this would have been unprecedented even for Les Mills and yet here it was, leading one of the largest live streaming fitness classes in the world and exceeding all expectations.
Elsewhere, in the absence of being present in classes and under the watchful eye of a trainer, Les Mills needed to think about how it could leverage the 140,000+ fitness instructors around the world and enable them to connect with the people. “These people aren’t just the faces you see on our apps and workouts, they are the community who run the classes in centres and in gyms,” says Fournier. “They understand fitness, they understand health and wellness and they are a part of the whole community so we started to connect and to create a networking effect, connecting the expert to the community that has a need. It has been quite amazing to see this level of engagement and communication with instructors and seeing how they can exercise better.”
Right, the future and what it will look like for many remains uncertain. The last year has taught us to rethink our perceptions of how industries can and should operate and has forced a lot of businesses to rethink their operations. In some cases, this has created great opportunities and change for good. For fitness and exercise, which as we know was already going through it’s own evolution prior to 2020, this evolution and convergence of fitness and technology will continue at an incredible pace. As we talk of new norms, what does that actually mean for Les Mills? Can it ever go back to what it was before? “Some people enjoy exercising from home. Some people are enjoying working out more outdoors and hiking or going to the park and doing their exercise routines there. And you will always have people missing their fitness club,” says Fournier. “Human nature will always go back to convenience and people will want to go back to the convenience of a fitness club or a class.”
“I firmly believe that club operators need to evolve and they need to focus on their members.There are an increasing amount of members who are outside the club as we’ve discussed. You see the evolution right now, more and more are embracing digital, creating some challenges and motivating people to exercise outside of the club. It’s a pretty big shift and one that’s going to continue, so we have to continue to look at our offering and how we can continue to serve our community in the best way possible.”
ServiceNow research highlights opportunities for organisations to boost productivity as today’s new pace of working creates the perfect environment for innovation
The Work Survey gathered opinions from 900 C-suite leaders and 8,100 employees across 11 countries, including 100 C-level executives and 1,000 office workers in the UK. It found that, despite 96% of UK leaders and 87% of UK employees stating that their company transitioned to new ways of working faster than they thought possible during the initial lockdown, many departments would not be able to implement new digital processes within a month in the event of another major disruption, such as the one we are facing now. Only a minority of UK leaders believe that customer service (37%), finance (38%) and IT (39%) could introduce new workflows within 30 days.
This challenge is exacerbated because most businesses still have a digital disadvantage, with 98% of UK C-level leaders admitting to still using offline processes. These include:
“Organisations innovated rapidly, and initial sprints enabled them to react to the immediate COVID-19 challenges,” said Chris Pope, ServiceNow’s VP Innovation. “Some decisions made were knee-jerk and rapid, but at what cost? There may be good short-term gains, but are they ‘match fit’ for our new ways of working? For organisations still struggling to integrate and implement a fully integrated workflow system, the future of work will not arrive, and soon they’ll fall behind.”
Worker safety is paramount
The survey also showed there are doubts when it comes to workplace safety from both UK leaders and UK employees.
“The critical challenge for UK organisations will be balancing the immediate need for business continuity with the personal needs of their employees,” said Pope. “2020 has been a difficult year for a lot of people. Many have seen restrictions over the past several months, which look set to continue through the winter. Businesses need to lead with compassion and combine empathy with meaningful action to help their employees navigate the months to come. In this distributed working environment, how organisations handle the moments that matter, from when a hire joins to when they leave, not only determines talent retention but will also contribute to overall business continuity and success.”
Business leaders split on return to office preferences
UK business leaders are also divided on how to keep their company most productive. While 49% want to maintain new ways of operating once the crisis subsides, 51% are keen to return to business as closely as it was prior to COVID-19, indicating a divide in approach.
Despite 57% of UK employees feeling they now have a better work-life balance, both UK leaders (99%) and UK employees (80%) have concerns about how remote work will impact their business moving forward.
The research indicates that leaders are prioritising speed of business while staff care about the human side of working. In terms of the largest challenges posed by remote work, UK leaders are most concerned about extended timelines for new releases or innovations (48%). Conversely, UK employees see reduced collaboration (48%) as their largest worry.
More information about The Work Survey can be found by accessing the survey findings slide deck and infographic.
Survey Methodology
Wakefield Research fielded an online quantitative survey in September 2020 to 900 C‑level executives and 8,100 office professionals (employees) from companies of 500 or more employees in the following countries: United States, United Kingdom, France, Germany, Ireland, Netherlands, India, Japan, Singapore, Australia, and New Zealand. While Wakefield surveyed across industries, the findings highlight meaningful differences from employees in the following five key industries: financial services, healthcare, manufacturing, telecommunications, and public sector.
We catch up with digital strategist Dr Paul J Bailo, who reveals the third part of his digital transformation masterclass…
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I believe that our final chat within the Digital Transformation Trilogy is based around culture…
The first of our trilogy into what constitutes a successful digital transformation centred around leadership and this was followed by planning. But the glue to keeping this all together is the culture. And culture’s very hard to define for a lot of people, but it’s really the essence of what your organization is about.
It’s truly understanding what your value systems are. When we think of who we are and what we believe we bring to an organization – our beliefs, our religions, our upbringing and what mom and dad taught us – we bring in our feelings of how we see the world. These are basic perceptions, deep, embedded thoughts in our minds, shared beliefs, and even unconscious feelings, right? Who we are and what we are as human beings have developed through where we lived, what zip code we lived in, our friends, our family, religion and background. And these are the values we bring into an organization, which are fundamental to this idea of culture. So, you’re mixing all these different values in order to drive a digital culture, in order to set the right mindsets and behaviors that could be shared with all the members of the organization.
When we talk about digital culture, it’s usually about organizational change and transformation…
Historically, organizations talked about siloed use of digital, but now we’re talking about how every department needs to be digital. When you start talking about keeping everything in a small group and collaborating, we’re saying, “No, digital is everywhere in every aspect of the business.” These are traditionally very hard things for organizations to develop in their culture. And it’s rooted in this idea and belief of who this organization is and what they stand for. And this digital culture needs to be reinforced on a daily basis from the executive leadership down to the frontline people. The culture is the foundation for the business’ success in digital. It’s this stable environment in which organizations behave and hold everyone accountable. I think of culture almost like baseball in a sense.
Baseball? How so?
So, baseball is a set of rules and every player knows that these are the rules. There’s a first base man, second base person and third base person. There are rules and regulations on how you behave in the game of baseball, so when people, the players go out in the field, everyone knows what to do. With our digital culture we need to know the norms that we believe in, and the values we hold true, and the actions we expect. These actions have rituals and behaviors and routine processes that are digital, and there’s a digital culture, which basically serves their structure. These structures are a digital structure of org charts, and products, and mission statements that build the digital culture, in order for organizations to be very successful in the execution of digital initiatives. It’s this idea of the digital culture driving the actions, the mindsets, and driving the mindset at the root of the cultural change that must exist, in order for organizations to be successful in this current world that we’re living and the constant change.
The focus of digital is not just about the actions alone, it’s about the actions and the change that must happen in our heart, minds, and souls in these organizations that are transforming to be digital. It’s who we are and what we stand for, and consistently reminding ourselves and the employees, and the team members, and the shareholders of what we stand for in this digital culture. It is the mindset and behaviors that we agree to. and police, to hold everyone accountable. Understand that by doing this in our culture, they will reap the benefits of this digital change and digital landscape by agreeing that this is how we’re going to support each other in our overall digital culture: the values, the behaviors, how we talk to each other, how we behave with each other, how we execute as a team together.
What are the tangible benefits to this cultural approach?
It’s through minimal disparity and a sharing of the high risk of failure. Support is built into the culture. Taking a massive risk is built into the digital culture. It is extremely hard to change the culture because you’re truly trying to rewire people’s minds. And in legacy organizations, most people hate change, so you have to think about the power structure in this idea of digital culture, and this idea that decisions need to be made quickly, efficiently, very fluidly, and to constantly evolve in this idea of continuous improvement, which means that the culture will be evolving with it also. It’s the values and beliefs that the organization hold as one. It also is the emotional piece. It’s truly, how do you want to work? Is this a place that you want to belong to? Are your personal values aligned with the digital values of this organization? What are the values, right? The values that this organization holds true in this digital arena, are a critical part of the culture, absolutely critical.
Digital is forefront and the lifeblood of these organizations that must have a digital culture in order to survive. There’s no way companies are going to survive – banks, financial institutions, insurance companies – if they continue to behave in the way they’re behaving. Clients will not come to them, and will leave them in droves, if they are not bleeding edge digital organizations that have a culture pushing the envelope in transformation and change. Even the idea or ideas of decision-making, in a digital arena, are fast and furious. It’s not this big, long, legacy type of committee, in order to say these are now the decisions. It’s fast and furious in order to keep up with the marketplace. It’s the idea of strategy on a continuous, unending basis. It’s the idea that digital will change the way organizations conduct business.
It’s seeing the power shift within an organization?
Right! This digital culture is driven by the outcomes. And it’s this idea of digital culture which causes this power shift in the organization. And this is very egotistical, right? This idea of digital culture is a power grab for some people. It’s a mindset rewiring. It’s a behavioral rewiring. It’s an adjustment of values and behaviors. It’s a way of policing each other in a way that might make some people very uncomfortable. When we’re thinking about this, it’s this idea of culture which is one of the core pillars of a digital organization, and looking at these digital organizations in order to be much more efficient and effective in this brutal environment we’re currently in. It’s also building relationships, understanding that the idea of digital culture is a never-ending learning environment.
Apple doesn’t have the best products or the best services, but they react to the market extremely quickly. They react to it because they have a culture of learning, both on the soft skills and the hard skills. They understand the challenges of digital technology very quickly because their culture supports this idea of never-ending learning. A true digital culture within the organization is a learning institution. A digital culture in an organization is an organization that takes care of its employees and upskills them. It identifies the skills that employees need to be competitive, identifies the skills that organizations need in order to drive cultural digital change.
When we talk about digital culture, we’re discussing a massive shift in the way organizations think and behave as well as the organizational structure, the power structure, and executive mindset change. It’s really this idea that digital skills are required in every level of leadership, that training is necessary and the best practices of digital are required.
The new issue features exclusive content from Marsh UK, HPE, and Rim of the World Unified School District…
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Welcome to the latest issue of Interface Magazine!
This week’s cover star is Alistair Fraser the CEO of UK Corporate at Marsh who has given us an exclusive insight into the massive transformational change at the insurance brokerage, that seeks to help enterprises survive and thrive during a global pandemic…
The COVID-19 pandemic’s economic and social impacts are driving significant shifts in global political risk — introducing new dynamics and accelerating existing geopolitical megatrends, such as trade protectionism and the transition to a multipolar world order.
“We segment our service delivery to clients based on their size and needs around risk and insurance,” explains Fraser, from Marsh’s Bristol office. “Our role is to advise our clients on their insurance and risk requirements so that they can manage risk in a more controlled way, helping them to protect their business, roll out new products and services, and continue to thrive.”
Elsewhere, we speak to Erik Vogel, Global Vice President, Customer Experience at HPE to see how the global, edge-to-cloud Platform-as-a-Service company is transforming the customer journey with GreenLake to provide an ‘everything-as-a-service’ offering…
Plus, we have the third and final instalment of digital strategist Paul Bailo’s Digital Transformation masterclass, and an exclusive with Mads Fosselius, CEO and Founder, Dixa who reveals the secrets to succeeding in this ‘new world’. And we speak to Michelle Murphy, Superintendent of Rim of The World Unified School District, who explores how a digitalisation of the classroom begins and ends with the success of the student in mind.
A new study from Business Fibre reveals the best cities to be a tech student around the world
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A new index by Business Fibre has analysed 34 of the world’s Organisation for Economic Co-operation and Development (OECD) capital cities to find 2020’s best cities to be a tech student. The index has analysed each city according to metrics such as the number of universities offering technology and engineering courses, total tech companies and employees in each city, the monthly living cost and the top cities investing in tech-related research. See the index here.
The top 10 cities to be a tech student
To find the world’s top cities to study technology, we have ranked each city according to a series of metrics to find the overall winners for those looking to start their career in technology.
The metrics explored include budget spent on tech-related research, the number of people employed in professional, scientific and technical sectors, tech companies, monthly living costs as well as the number of top universities offering technology and engineering courses.
Introducing the top 10 cities to be a tech student…
London, UK
Berlin, Germany
Jerusalem, Israel
Bern, Switzerland
Seoul, Korea
Stockholm, Sweden
Paris, France
Canberra, Australia
Rome, Italy
Tokyo, Japan
Top cities contributing to tech research
Exploring Technology research spend, the study also finds the top cities who are consistently investing in technology research. This has been calculated by looking at the % of the total GDP spent on research.
Rank
City
Research Spend (% of total GDP)
1
Jerusalem, Israel
4.8
2
Seoul, Korea
4.3
3
Bern, Switzerland
3.4
4
Stockholm, Sweden
3.4
5
Tokyo, Japan
3.2
6
Berlin, Germany
3.1
7
Copenhagen, Denmark
3.1
8
Vienna, Austria
3
9
Helsinki, Finland
2.7
10
Brussels, Belgium
2.7
The highest-ranking city is Jerusalem, which ranks high across all metrics and is the 3rd best city for tech students overall. The top three cities for tech-related research also include Seoul, spending 4.3% of the GDP, followed by Bern at 3.4. All three cities also rank high for the best universities and overall top cities for tech students.
Top 10 universities to study technology worldwide
Based on the top 10 cities to be a tech student, we wanted to find the best universities in each city for aspiring students. To find the best universities BusinessFibre looked at metrics such as the total number of students, faculty staff and the number of international students. This alongside each universities global subject ranking for Engineering and Technology make up the top 10 tech universities in the world. The monthly cost of living has also been included so that students can be sure they’re studying at the best overall tech university.
Rank
University
Worldwide ranking (Engineering and Tech 2020)
City
1
Imperial College London
7
London, UK
2
Technical University of Munich
25
Berlin, Germany
3
Technion – Israel Institute of Technology
179
Jerusalem, Israel
4
ETH Zurich – Swiss Federal Institute of Technology
4
Bern, Switzerland
5
Seoul National University
22
Seoul, Korea
6
KTH Royal Institute of Technology
30
Stockholm, Sweden
7
Ecole Polytechnique
57
Paris, France
8
The Australian National University
71
Canberra, Australia
9
Sapienza University of Rome
127
Rome, Italy
10
The University of Tokyo
21
Tokyo, Japan
Comment from Ian Wright: “With technology arguably being the fastest growing and most profitable industry in the world, we wanted to find the best cities in the world to be a tech student as well as the top cities funding technology-related research.
It’s clear from the research that London, Berlin and Jerusalem are the best cities for students, while Seoul and Bern join Jerusalem at the top for investing in technology-related research.
For those who don’t want to spend a ton of money on their education, Seoul National University is a great option that offers a lower living cost while still having a good global university ranking.”
While the virus has presented many challenges, it has also opened up opportunities for increased industry security and customer relationships. Agnė Selemonaitė, Deputy CEO at ConnectPay, explains.
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1. Increased industry security
Banks and other financial institutions have been a major target for scammers since the beginning of the pandemic; in fact, cyberattacks between February and April alone spiked an astonishing 238%. The increased volume of threats has encouraged companies to face the situation head-on and implement new safeguards.
“Putting more safeguards in place will benefit market players long after the crisis has blown over, as market players will be better equipped to deal with the constantly evolving digital threats,” says Selemonaitė.
2. Growth of digital payments market
Alongside the World Health Organization encouraging us to go cashless, the crisis has stimulated the growing amount of e-payments. Selemonaitė notes Sweden’s example: amidst the uncertainty, Sweden’s central bank signed an agreement to gain access to EU TIPS platform, which will act as the basis for the country’s own platform for instant payments.
“Sweden’s approach shows that in order to be in a better spot to satisfy increasing demand for faster, more convenient services – you need to be proactive,” Selemonaitė explains. “We follow this approach too; having realised our clients’ needs for greater options amidst quarantine, we integrated more payment methods into our Merchant API.”
3. Accelerating digital banking development
As banks had to severely limit their working hours during the lockdown, digital banking picked up the slack to accommodate the financial needs of people working from home. “As the new wave of customers sieged the system, faster development of banking services took precedence,” says Selemonaitė. In the US alone, over 45% of people have changed the way they bank amidst the crisis, and according to a European customer survey by McKinsey, there has been a 20% increase in digital engagement.
4. Enhanced customer experience
The aforementioned McKinsey survey showed that people who are highly satisfied with their digital banking experience are two-and-a-half times more likely to open new accounts with their existing bank than those who are just just satisfied. The aftermath of COVID-19 is expected to continue down the path of developing simplified UX to attract and retain clientele.
“Although requiring meticulous work, constant UX evaluation can greatly benefit product credibility and client retention, for instance, our first UX update led to doubling our monthly conversions,” says Selemonaitė. “It is likely that we will see a more customer-focused approach in the post-crisis industry too.”
5. A catalyst for fintech companies
The ’08 financial crisis gave a boost for the fintech industry, as, at the time, people were losing trust in the system, and in legacy financial institutions. In the aftermath, some entrepreneurs parted ways with the concept of traditional banking, aiming to present the market with a more technologically sophisticated solution.
“This time, the crisis could have an even greater impact for fintechs, as well as regtechs, as they rely on solutions fintechs can develop,” adds Selemonaitė. “Unfavourable circumstances drive the need to innovate across interconnected sectors.”
Marius Galdikas, CEO of ConnectPay, explains the role of digital finance during a pandemic, and how it has changed society forever…
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Could you tell us a little about your background?
I originally come from the field of technology. I’m a physicist, and I’ve always marveled at engineering and technology – digital technology, specifically. Through the years, I shifted into products and then into fintech, which was very exciting to me, because fintech is about people and technology. It’s about good people that understand regulation, understand business and understand technology. I am now the CEO of ConnectPay.
Data shows that cyberattacks on financial institutions spiked enormously between February and April this year – why is that?
I think the main reason it happened is actually at the core of the pandemic; the pandemic means people are locked up at home, so you end up with many more users of digital financial services than there usually are. Cash is unusable at this time, when you’re locked up, so you have a lot of new customers in digital finance – some of them are tech savvy and others are not. There’s a lot of people that never used digital financial services, and now they must. So you have this influx of customers into the market, that’s number one. Number two, governments reacted and we had these stimulus programs released, which means there’s a lot of funds being distributed through different programs. And many of those funds are meant for relieving the consequences of joblessness.
So you have a lot of new funds moving around and, because all of it is happening in the digital finance area, I think that stirred up the whole fraudster community. Fraudsters are working hard, now, to try and use the situation to steal funds from people, which results in information security threats and cyber attacks. Cyber attacks are means of achieving the goals for fraudsters.
How has cyber security adapted to combat this issue?
It’s a very big challenge to tackle. Number one is, all of the financial services providers that already operate online, they have their assets online, they have the required technology and so on. Could that have been changed so fast? No. Information security requires a lot of work and insight, and it’s a lengthy process to deploy specific tools to combat that. So I don’t think much has changed, but I think a realisation came that fraud prevention is now a very important area.
As well as increased security, what have been some of the digital baking trends since the emergence of COVID-19? How have people changed the way they handle money?
The stride towards a cashless society has obviously been accelerated, forcefully. Some countries and some companies will do better than others, but I think majority of the change is yet to come, because the pandemic will result in economic hardship and economic hardship will result in changes, in innovation, just like we had in the 2008 crisis. That gave birth to Bitcoin crowdfunding, sharing economies – all of that was an outcome of financial crisis, and I think we will see something come up that we cannot even imagine right now. What is the driver for those changes? Previously in 2008, there was a huge loss in trust towards financial institutions. The financial sector was the reason behind the crash, and so trust was lost, and all of these instruments – crowdfunding, sharing economy, blockchain technology – were targeted specifically at, “Hey, we don’t trust financial institutions anymore; what can we do to exclude them from the economy altogether?”
So what will happen now, I think, will be the same, depending on the size of the downturn. I’ve been hearing that in the Western and European developed markets, countries have been hit very hard, financially, by the pandemic. This will continue; there will be financial problems. It’s different because, previously, everybody lost jobs and salaries went down. Now, there’s a different aspect to what the hardship will be like, and it will result in something new.
What are your thoughts on a cashless society? Do you think it’s inevitable or are there barriers? And if it does happen, how far away do you think it is?
I do think it’s inevitable. I think the entire world is going towards a cashless society at different speeds; for example, the Nordic countries are the biggest cashless societies in the world, whereas the UK is probably five years behind them. In the US, cash is still very important –people love cash in the States – so they’re about 10 years probably behind the Nordics. However, the direction is the same. It’s all going towards cashless. The reasons for it is obviously internet penetration and mobile phone penetration – those are the key factors towards how fast will we get to cashless society, country-by-country. But also, what we need to understand is that cashless society also sort of puts a strain on the society as a general, because elderly people might be excluded from this market or might have trouble or problems adapting to the cashless environment. However, sometime, we will all be there.
The push towards the cashless society is driven by two things: one is the new consumer. These are new people, the new generation, and exchanging funds should be as simple as messaging or using social media. So one driver is this new generation that drives the digital economy and the cashlessness, because they live in the digital world. The other part is the actual financial institutions that drive the cashless society, but their reasoning is different – it’s efficiency. They want to cut costs. They don’t want to have physical retail locations. Nobody wants to transport or count cash. There’s fraud issues related to cash, so the financial institutions are driving it from another perspective.
Do you think it’s safe to say that digital banking is no longer a luxury, but a necessity?
Absolutely. We see that the world is much more fragile than we thought. We are all forced to go online, work from home, access our financial instruments from home, shop online, get government funding and stimulus online without going anywhere, and so on. It is a necessity, it is definitely not a luxury and everybody will have to adapt to that. I just hope it becomes less painful for everybody to transition, and that people don’t lose out on their money through fraud.
We spoke to Carlene Jackson, CEO of Cloud9 Insight, about the transformative power of both technology and company culture…
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What led to you launching your business, Cloud9 Insight?
I started Cloud9 about 10 years ago, and it was an opportunity to support small businesses to deploy CRM in the cloud for the first time, because I saw a trend of more and more clients moving to the cloud. There’s an opportunity to help clients with making the most of their data in the SME space, plus they’re able to use Microsoft technology to get more insights – hence the name Cloud9 Insight. At the time, most of my competitors were still looking to sell on premises-software, but I saw a gap in the market.
Historically, what I’d seen with enterprise clients I had worked with, is that CRM projects had been at least a year long, and often you’d question whether the business had moved on since the definition stage of the project, and if it was still fit for purpose. I think projects these days need to be a lot more agile to support clients with business transformation; for me, working with cloud technology allows that agility.
There’s a quote on your website where you say you have a love of change and disruption – what does that mean to you, as a tech leader and expert?
I think it comes naturally to me. I’m moderately dyslexic, and some say that dyslexics are quite creative people. I find it hard to read anything without having a pen and paper in my hand, because I always got lots of ideas, and I think part of the reason that entrepreneurs have often been so successful as dyslexics is that we often think differently. If you look at tackling problems the same way they’ve always been tackled before, then you’ll probably come up with the same answers – but if you can address things differently, then maybe you might come up with a better opportunity.
When I started my business, I moved almost immediately to the Alps; I hadn’t worked in the Microsoft channel, and I had no preconceptions about what did a Microsoft partner selling CRM did. That meant my business model turned out very different to a lot of others. I also recruit a lot of young people into my business – which is why I’ve set up an apprenticeship programme, called Vantage Academy – and having them involved in the business has helped maintain that creative, disruptive model.
So is company culture very important to you?
Definitely. I used to work at IBM, and it was quite normal to travel around different offices around the country, visit your clients and just pop in and hot desk. Depending on which office you went to, some people were a bit more chatty and you got to hear a little bit more about what they’re doing. But what I noticed about my business, as it was growing, was it was becoming departmentalized and siloed in the same way that many of my clients complain about. I didn’t want that; I don’t want the salespeople not working with the support people, or projects people, and so on. There’s so much opportunity to learn when you have conversations with colleagues across different parts of the organisation, and I really wanted to make sure that we worked as a team.
I know you’re a big advocate for diversity in the workplace, and in the general realm of technology – what are some of the benefits diversity can bring?
First of all, organisations need to make sure that the demographics of who they employ reflects the demographics of who you’re selling to, because it’s difficult to understand them otherwise. Certainly in a B2C market, having representation across age groups in your workforce is really important. What I’ve found is that what really motivates the older generation is the ability to be a mentor and a leader to those that don’t yet have the experience. They want to give back.
As for younger people, they have energy, ambition and hunger to pass on to across the workplace, allowing great things to happen, and I think it increases the performance of my overall team. Diversity could also be gender; certainly in many sectors like tech and oil and gas, it is heavily biased towards males, and a lot of my staff do tell me that it’s nice to have a more balanced workplace.
I’m a lot more people centric than maybe a lot of my peers might be; I like to embrace the people and the value of people in businesses, both within my clients and within my own team. That’s really important to me.
You wrote a piece about how working from home is changing attitudes to work, specifically citing children gatecrashing video calls and how that represents how the life part of work-life balance can no longer just be hidden away – with technology supporting people really successfully to work from home, will things ever go back to ‘normal’?
I think there’s no going back to ‘normal’, for sure. The old way is not going to exist at all. There’s two types of businesses: those who are probably kidding themselves and just about surviving, and those who are probably a lot more agile and forward-thinking, who are going to look at the trends that have been happening, jump onto those trends and allow a lot more flexibility around people working from home.
The other great thing about this mobility of the workforce, is that maybe your team don’t even have to be in the vicinity of your office – maybe not even the vicinity of the UK. Maybe we can tap into where the best talent is.
How do you think female entrepreneurship can be encouraged in tech, and other STEM industries?
I love that question. One of the exciting things about me being able to set up an apprenticeship business is I’m definitely going to use my voice and position to be a great advocate for younger females to come into the tech sector. I think there might be a perception that you need to have technical skills, but having great leadership skills, having creative skills are also very important and greatly valued in the sector. It’s just trying to open the younger generation’s mind, especially for young females, as to the skills that they have inherently, in great abundance, how are they valued, and how can they use those skills to make a difference.
And for me, technology is a great enabler of change and making a difference. I’d like to see schools working more with younger people to help them feel confident about working with technology. When I hire people that are fresh out of school, I’m absolutely dismayed by how few skills they have in using technology. That crosses all genders, but it’s really sad to see the percentage of females attending degree courses that are highly attended by males. However, when you look overseas at places like Poland, they have a much greater balance, so I think we have a lot to learn about what is it that overseas countries are doing that we’re not. I suspect that starts at a young age in school, and if we could create more entrepreneurs, then our economy will be much more successful.
So it’s about encouraging STEM topics in schools, full stop, not just for girls but all genders, in order to fill that skills gap.
Yes, absolutely. I think that if there’s more integration between businesses and their involvement in schools, and that opportunities to learn entrepreneurship and problem-solving using technology exist, that might open their eyes.
deVere Group reports that enquiries for Vault, its global money app and card service, has experienced a jump in enquiries of 67% in Quarter 3.
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Growing demand for green, paperless banking and fears over post-Brexit rule changes have triggered a “monumental surge” in enquiries for money and challenger bank apps, reveals one of the world’s largest independent financial advisory and fintech organisations.
deVere Group reports that enquiries for Vault, its global money app and card service, has experienced a jump in enquiries of 67% in Quarter 3.
The cutting-edge app allows users to deposit, store, transfer and exchange money in most major currencies. The deVere Vault Prepaid Mastercard®️ can be used online, in-store and at any ATM location across the globe where Mastercard®️ is accepted.
Nigel Green, CEO and founder of deVere Group, which launched Vault in 2017, comments: “The monumental quarter-on-quarter surge for banking-style apps is, we believe, attributable to two main drivers.
“First, individuals and companies are increasingly embracing and expecting green, paperless banking.
“This is partly fuelled by the pressing need for us all to drastically reduce waste and better protect the environment – something the pandemic and issues such as raging wildfires has collectively focused minds on – but also because a paperless system is, typically, a more convenient and efficient one.
“Traditional banks have a long way to go to catch-up with tech-driven challenger banks and fintech [financial technology] firms, which are intrinsically much greener and are leading the charge to a paperless future.”
He continues: “The other major point driving engagement with e-money apps in Europe specifically is that many of the UK’s banks are set to abandon their customers, by closing their accounts and stopping use of their services across Europe within weeks unless they have a valid UK address.
“Under post-Brexit rules, it becomes illegal for UK banks to service customers living in the EU without applying for new banking licences.
“This will cause significant disruption for many individuals, families, businesses and other organisations.
“As such, people are flocking to firms that already operate under pan-European rules.”
The massive jump in enquiries, says Mr Green, underscores that “fintech is the future of finance” – not only for clients’ convenience and efficiency but also, in a large part, because it is more environmentally sustainable.
The deVere CEO concludes: “For Millennials and Gen Z clients especially there’s been a radical shift toward ‘less stuff, more impact’ in banking and financial services.
“And this is just the beginning of this global and far-reaching trend.”
Nell Walker talks to James Shanahan, CEO Revolut Singapore, regarding a new dawn of digital banking
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“By re-conceiving the infrastructure of a bank, the way that a bank delivers its services, you can take an order of magnitude off the cost and you can bring a level of experience to the customer that’s not hamstrung by old tech, by old thinking, by siloed approaches…” James Shanahan, CEO of Revolut Singapore
We spoke to Carlene Jackson, CEO of Cloud9 Insight, about the transformative power of both technology and company culture
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Interface Magazine hooks up with Carlene Jackson, CEO of Cloud9 Insight, who reveals the transformative power of both technology and company culture…
What led to you launching your business, Cloud9 Insight?
I started Cloud9 about 10 years ago, and it was an opportunity to support small businesses to deploy CRM in the cloud for the first time, because I saw a trend of more and more clients moving to the cloud. There’s an opportunity to help clients with making the most of their data in the SME space, plus they’re able to use Microsoft technology to get more insights – hence the name Cloud9 Insight. At the time, most of my competitors were still looking to sell on premises-software, but I saw a gap in the market.
Historically, what I’d seen with enterprise clients I had worked with, is that CRM projects had been at least a year long, and often you’d question whether the business had moved on since the definition stage of the project, and if it was still fit for purpose. I think projects these days need to be a lot more agile to support clients with business transformation; for me, working with cloud technology allows that agility.
There’s a quote on your website where you say you have a love of change and disruption – what does that mean to you, as a tech leader and expert?
I think it comes naturally to me. I’m moderately dyslexic, and some say that dyslexics are quite creative people. I find it hard to read anything without having a pen and paper in my hand, because I always got lots of ideas, and I think part of the reason that entrepreneurs have often been so successful as dyslexics is that we often think differently. If you look at tackling problems the same way they’ve always been tackled before, then you’ll probably come up with the same answers – but if you can address things differently, then maybe you might come up with a better opportunity.
When I started my business, I moved almost immediately to the Alps; I hadn’t worked in the Microsoft channel, and I had no preconceptions about what did a Microsoft partner selling CRM did. That meant my business model turned out very different to a lot of others. I also recruit a lot of young people into my business – which is why I’ve set up an apprenticeship programme, called Vantage Academy – and having them involved in the business has helped maintain that creative, disruptive model.
So, is company culture very important to you?
Definitely. I used to work at IBM, and it was quite normal to travel around different offices around the country, visit your clients and just pop in and hot desk. Depending on which office you went to, some people were a bit more chatty and you got to hear a little bit more about what they’re doing. But what I noticed about my business, as it was growing, was it was becoming departmentalized and siloed in the same way that many of my clients complain about. I didn’t want that; I don’t want the salespeople not working with the support people, or projects people, and so on. There’s so much opportunity to learn when you have conversations with colleagues across different parts of the organisation, and I really wanted to make sure that we worked as a team.
I know you’re a big advocate for diversity in the workplace, and in the general realm of technology – what are some of the benefits diversity can bring?
First of all, organisations need to make sure that the demographics of who they employ reflects the demographics of who you’re selling to, because it’s difficult to understand them otherwise. Certainly in a B2C market, having representation across age groups in your workforce is really important. What I’ve found is that what really motivates the older generation is the ability to be a mentor and a leader to those that don’t yet have the experience. They want to give back.
As for younger people, they have energy, ambition and hunger to pass on to across the workplace, allowing great things to happen, and I think it increases the performance of my overall team. Diversity could also be gender; certainly in many sectors like tech and oil and gas, it is heavily biased towards males, and a lot of my staff do tell me that it’s nice to have a more balanced workplace.
I’m a lot more people centric than maybe a lot of my peers might be; I like to embrace the people and the value of people in businesses, both within my clients and within my own team. That’s really important to me.
You wrote a piece about how working from home is changing attitudes to work, specifically citing children gatecrashing video calls and how that represents how the life part of work-life balance can no longer just be hidden away – with technology supporting people really successfully to work from home, will things ever go back to ‘normal’?
I think there’s no going back to ‘normal’, for sure. The old way is not going to exist at all. There’s two types of businesses: those who are probably kidding themselves and just about surviving, and those who are probably a lot more agile and forward-thinking, who are going to look at the trends that have been happening, jump onto those trends and allow a lot more flexibility around people working from home.
The other great thing about this mobility of the workforce, is that maybe your team don’t even have to be in the vicinity of your office – maybe not even the vicinity of the UK. Maybe we can tap into where the best talent is.
How do you think female entrepreneurship can be encouraged in tech, and other STEM industries?
I love that question. One of the exciting things about me being able to set up an apprenticeship business is I’m definitely going to use my voice and position to be a great advocate for younger females to come into the tech sector. I think there might be a perception that you need to have technical skills, but having great leadership skills, having creative skills are also very important and greatly valued in the sector. It’s just trying to open the younger generation’s mind, especially for young females, as to the skills that they have inherently, in great abundance, how are they valued, and how can they use those skills to make a difference.
And for me, technology is a great enabler of change and making a difference. I’d like to see schools working more with younger people to help them feel confident about working with technology. When I hire people that are fresh out of school, I’m absolutely dismayed by how few skills they have in using technology. That crosses all genders, but it’s really sad to see the percentage of females attending degree courses that are highly attended by males. However, when you look overseas at places like Poland, they have a much greater balance, so I think we have a lot to learn about what is it that overseas countries are doing that we’re not. I suspect that starts at a young age in school, and if we could create more entrepreneurs, then our economy will be much more successful.
So it’s about encouraging STEM topics in schools, full stop, not just for girls but all genders, in order to fill that skills gap.
Yes, absolutely. I think that if there’s more integration between businesses and their involvement in schools, and that opportunities to learn entrepreneurship and problem-solving using technology exist, that might open their eyes.
Sarah Doherty, Product Marketing Manager at iland discusses how a cloud-based infrastructure can accelerate IT initiatives.
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There’s no doubt about it, we are living in a cloud enhanced world. No matter what is happening in life, whether it’s uploading pictures of the family, keeping track of friends on social media, or working remotely, the fact remains that the cloud is a part of our everyday lives in one way or another.
So why are organisations so hesitant to adopt a cloud infrastructure? From speaking with customers, the reason extends across infrastructure, business as well as, let’s face it, an overall new way of thinking about what is the best way to mitigate risk.
When we talk to business leaders, the idea of moving from a CAPEX model to an OPEX model is appealing for pretty much everything but IT. They still look at IT assets and think about budget cycles and performance/capacity per the pound or dollar. This can put them into situations where they are purchasing hardware on three to five-year cycles, subsequently discovering after two years that the hardware they have invested in isn’t doing what it needs to do. However, at that point, the business is committed.
They may be locked into a certain vendor or platform and the pain of moving seems overwhelming or they may have concerns about moving to the cloud in general. In a nutshell, this approach is not compatible with the flexibility and scalability that many businesses need in their toolkit.
The tangible business benefits of using a cloud-based infrastructure have been heavily publicised of late, with the onset of COVID-19 necessitating a quick and efficient move to the cloud, in order to keep businesses moving. However, implementing a cloud strategy to future-proof an organisation can, not only have top-line operational benefits such as data security, business continuity, resilience, scalability, and accessibility – it can facilitate wider digital transformation strategies.
This will prove crucial to maximising business efficiency and time-to-market of these initiatives, in the event of another worldwide event where physical access to a building is not possible. After all, an organisation’s end users have become accustomed to receiving a faultless service – even during a global pandemic – and would have expected businesses to have learnt their lessons from COVID-19.
Organisations wanting to implement a range of IT initiatives have unarguably accelerated cloud adoption. However, when choosing a cloud partner, they normally express the following concerns around adaptability to the cloud, which cloud providers need to tackle head-on.
Security and Compliance
While it may not be the first thing that springs to mind for IT professionals looking to quickly enact digital transformation strategies, such as building applications that will streamline internal business processes, security practices must adapt as data moves to the cloud. While assets are normally well-locked down, it is easy to accidentally create vulnerabilities in the cloud since customers are responsible for setting many security controls around their apps and data.
All clouds have a different set of best practices and design principles. Therefore, knowing those practices up-front will help cloud admins avoid headaches later. Working with the right cloud partner to plan and then execute a cloud strategy will not only eliminate headaches now and later but will also help to grow the business for the future.
It goes without saying that vulnerabilities must also be addressed as soon as possible. Cybercriminals are currently stepping up their attacks to take advantage of remote employees. Phishing attacks are at an all-time high on small and large businesses, as well as public resources like hospitals and healthcare providers. Therefore, businesses must assign responsibility to an individual or group of individuals to look after the organisation’s data from the onset, especially during the migration period.
There is no time like the present to reinforce an organisation’s IT security and compliance guidelines, many of which include the relevance of when employees travel or occasionally work from home. This includes a refresher on password policies and how to identify and report phishing attempts. It’s important to help employees with securing their home networks, and all the other policies and guidelines they would typically follow at work to protect the company and customer data. This might also be an excellent time to train employees on document and data retention best practices.
Cloud Expertise and Management
Most IT teams are running at full throttle as it is, and the idea of learning entirely new jobs, alongside current tasks, can be daunting. Furthermore, IT managers may be wondering how to firstly move their teams to the cloud, and subsequently get them up to speed quickly and manage projects in the long run, minimising business disruption as much as possible.
A good first step is to implement a robust cloud migration strategy. This will help communicate a clear vision and change management plans to all employees within the organisation, including IT teams at the coalface, demonstrating how the move to the cloud will really help the business, and prove ultimately beneficial in the long-run. For example, key drivers are the need for greater availability, the desire to move from CAPEX to OPEX and the need for greater scalability as the company grows.
Furthermore, the progression from traditional server-based infrastructure to virtualisation and then to cloud involves several mental leaps. The cloud requires an adjustment of mindset and an ability to accept ways of doing things differently. However, this is the only efficient way to take wider business and IT strategies forward. Organisations should start their move with non-mission-critical applications, which are typically the easiest to migrate. The transition of refactoring some applications to function as cloud-native or distributed applications can take more time.
It goes without saying that organisations choosing a managed service provider to manage their cloud migration and ongoing support should lean on their partner as much as possible, especially in the first few months, to help teams get up to speed with new processes and workflows.
It’s all about short term pain for long-term gain.
Cost Control
Understanding all the factors that contribute to billing before an organisation makes the move to the cloud is a must, since cost management changes can lead to problems if they are not understood.
Cloud services are generally billed once a month or follow a pay-as-you-go pricing model. However, users must factor in hidden fees, such as data transfer costs, and additional support and training. These budget surprises can pose a challenge if not addressed proactively.
Organisations should choose the cloud partner that doesn’t spring any surprising extra fees; the best providers should have simple, easy-to-understand invoicing portals and support, where businesses have complete visibility of all costs in one place. This is increasingly crucial as businesses scale their cloud offering up and down – sometimes on a month-by-month basis – with differing costs to reflect this. When scaling in such a way, organisations need to be made aware of how these changes will be billed – i.e. immediately or on monthly terms. Not addressing the finer points of billing can unnerve an organisation who are not familiar with cloud models, or a SaaS approach.
It is important to look past the challenges and focus on the true advantages. The cloud provides a great opportunity to modernise IT infrastructure and gain operational efficiency through cloud-native design practices.
All clouds have a different set of best practices and design principles. Therefore, knowing those practices up-front will help cloud admins avoid headaches later. Working with the right cloud partner to plan and then execute cloud strategies will not only eliminate headaches now and later but will also help businesses to grow in the future through planned digital transformation initiatives that can be executed without the constraints of legacy hardware.
Gobeyond Partners and Webhelp surveyed 500 respondents at director level and above across a range of industries about the impact of COVID-19 on their businesses.
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New research from Gobeyond Partners, the consulting firm focused on customer journey transformation, and Webhelp, Europe’s leading provider of outsourced customer engagement services, has today revealed that over 60% of business leaders are re-evaluating how much they will be investing in change and transformation since COVID-19, yet only a third of survey respondents are committing to a higher spend in this area.
Gobeyond Partners and Webhelp surveyed 500 respondents at director level and above across a range of industries about the impact of COVID-19 on their businesses. By combining Webhelp’s expertise in customer engagement with Gobeyond Partners’ customer journey design and transformation capabilities, the two organisations were able to evaluate the impact of COVID-19 across a number of key areas and offer recommendations to businesses as they start to plan towards a post pandemic world. When it comes to the issue of transformation, the research highlights the value of an intelligent use of rightsourcing* which will be crucial for businesses to establish the most cost effective and relevant solutions to support the flexibility and speed needed during this transition period.
Change and transformation are two of a number of data points highlighted in the joint research and accompanying report by Gobeyond Partners and Webhelp which explores how consumers arenow demanding more human experiences, even in digital environments, and why organisations must balance agility and adaptability against a clear focus on maximising value from investment in transformation.
Mark Palmer, CEO of Gobeyond Partners comments on the findings: “As the urgency for change and transformation intensifies in our new reality, it raises some pivotal questions. How different willservice look and feel in the future? How will businesses and their operations need to adapt? And how can employers engage and support their colleagues to deliver on new customer promises? The engineering of an authentic human experience in the digital world will need a delicate balance, and companies will need to work hard to create service transformation that satisfies both these needs. This may expose a lack of capability and flexibility inherent in many organisations, due to a lack of investment. For brands to survive, leaders can no longer pay lip service to digital transformation and digital must be fully integrated into the overall operating model.”
Other key findings from the joint research include:
70% of businesses have seen a direct impact to their bottom line as a result of COVID-19, with more than half being negatively affected.
These financial impacts are expected to last, with more than 80% of respondents believing they will be financially impacted for six months or more and 50% expecting their finances to be affected for more than a year.
Companies that have been affected negatively by COVID-19 are twice as likely to expect cuts to their transformation budgets after the pandemic has subsided.
Craig Gibson, Chief Growth Officer at Webhelp Group continues: “Overall whilst budgets may reduce, spend on individual change and transformation programmes should not be reduced commensurately. Instead, the entire change portfolio should be reviewed and reprioritised. Now is the time to focus on and invest in a critical, clear and concise set of priorities, which the whole organisation can communicate and contribute to. This will ensure that the most critical agenda items will accelerate, without depleting vital cash reserves.”
One of the world’s largest independent financial advisory and tech wealth organizations is to launch a first-of–its-kind onboarding verification app amid “soaring global demand” for fintech solutions.
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deVere Group’s pioneering Ident Me app provides a secure identity verification system – as an alternative to traditional customer onboarding – and a notary services function when required, which is a first for the international financial services and fintech sector.
Of the launch of this new service, the founder and CEO of deVere Group, Nigel Green, comments: “We’re in an exciting new world. In recent months, the future has happened faster. There have been major shifts in the way we live, work, and manage our finances.
“Much of this is being driven by digital technologies, and our financial lives are no exception.
“There’s soaring global demand for fintech [financial technology] and it’s clear it is going to become an increasingly dominant part of our lives moving forward.
“Indeed, fintech is already the ‘new normal’ as we increasingly insist on immediate, on-the-go, 24/7 access to, use and management of our money. We demand personalised, on-demand services and lower costs.”
He continues: “Against this backdrop of growing demand, we decided that we needed to make the set-up process of onboarding to use our fintech apps as quick, easy and secure as possible.
“Ident Me is a hassle-free, simple and safe way for clients to provide identity verification for themselves via a KYC (Know Your Client) form.”
KYC is a financial services standard.
The Ident Me app consists of an easy three-step process.
First, proof of identity. This is done by taking pictures of the front and back of your ID card or passport.
Second, the capture of documents. This is undertaken by taking a picture of a document with your address on it, for example, a utility bill or rental agreement.
Third, the liveness test. A live selfie you take will get verified against your ID/Passport photo.
Once this has been approved, clients will soon be able to have access to and enjoy the benefits of deVere’s suite of fintech apps.
deVere is one of the very few financial advisory organisations that has been actively and consistently pushing into fintech and is now widely regarded as one of the leaders in the sector.
Currently, the organisation’s apps include deVere Vault, a global e-money currency app and multi-currency prepaid card; deVere Crypto, a cryptocurrency app to store, transfer and exchange major cryptocurrencies, including Bitcoin; deVere Core, an app that allows clients to monitor their investments in real-time, on-the-go, keeping them informed with news and events that impact investor returns; and deVere Catalyst, a low-cost investment and savings app that offers best-in-class globally diversified funds.
The deVere CEO concludes: “We believe that everyone should have access to and reap the benefits of cutting-edge fintech.
“Ident Me, the first-of–its-kind onboarding verification app, helps further democratise financial technology.
“Fintech is meeting growing demand for on-the-go service, it is speeding up the advance of global financial inclusion which helps social advancement around the world, plus costs are lowered and the client experience is enhanced.”
Digital transformation is laid bare with an insightful trilogy of podcasts from Dr. Paul J. Bailo…
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“I don’t see how any organisation in this current world could survive without a true digital leadership model.” Dr Paul J. Bailo, Executive – Digital Strategy, Data & Innovation
Dr Paul J. Bailo, a digital thought leader par excellence, takes us through the importance of leadership to a successful digital transformation programme
Over half [55%] of SMEs believe that their competitors have a better digital presence than they do, according to new research by leading creative agency, Sparkloop.
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The research, which questioned 500 decision makers from SMEs across the UK on how much time, budget and resource they have invested into their digital brand presence, also revealed that despite believing their competitors had a better brand presence, 45% of respondents had not reviewed the performance of their website in over 18 months.
In addition, 25% of respondents advised that they rarely, or only annually, make changes to improve the performance of their website to engage potential customers.
When questioned on the level of investment SMEs made into their digital brand, 46.3% advised they invested under £2,000, 53.7% invested £2,500 plus and 10.9% invested £10,000 plus.
However, a quarter [25.8%] of SMEs haven’t invested in their website and wider digital brand presence in over 2 years.
Other key take outs from the research include:
Only 31% of SMEs believe that they have a stronger digital brand presence than their competitors.
44.3% of SMEs have developed their website using ‘off the shelf’ platforms like Wix, Square Space or WordPress, with 31.6% opting for creative and technical input from an external agency.
A staggering 62.3% of SMEs have not taken advantage of tech features, like chatbots, blogs and feedback to increase stakeholder engagement or improve the performance of their website.
This new research comes as the majority of UK SMEs are forced to review and pivot their existing growth strategy following the impact of the current situation.
Gayle Carpenter, Creative Director of Sparkloop, confirmed: “This latest research is incredibly telling and effectively demonstrates that SMEs UK wide do not place enough value into both creating and maintaining a strong brand and digital presence, which could be damaging to their business.
Currently, SMEs are facing the significant challenge of survival following recent events. Those with the strongest brands, an engaging website and integrated digital presence will instil confidence and drive growth, both during and following this time of uncertainty.
For business owners looking to use this time to disrupt and develop, it doesn’t necessarily mean investing tens of thousands into your website and wider digital presence, but it does mean evaluating your brand by ensuring it represents your business and attracts the right target audiences. This is consistently overlooked by the majority of SMEs, as demonstrated by the research, but could be fundamental to future growth and success as we return to some form of business as usual.”
Established in 2004, Sparkloop has successfully delivered bespoke design and communication strategies for brands and businesses across the UK and overseas, with long-standing clients including Red Bull and HomeServe.
Founded by design and branding specialist, Gayle Carpenter, the firm is headquartered in Camden, London, with a South West regional office based in Bath, Somerset.
Since the outbreak of COVID-19, the agency has launched its Virtual ‘Spark-Up Sessions’ initiative, designed to help businesses quickly solve problems and identify achievable outcomes when establishing a clear and effective digital brand presence.
To find out more about this latest research, download a copy of Sparkloop’s SME Digital Brand Presence Report 2020 at www.sparkloop.com.
Chief Information Officer Philip Clayson is putting digital agility at the heart of the company’s strategic transformation plans for the future, following the recent acquisition of SSE Energy Services by OVO Energy.
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OVO Energy was founded in 2009 and redesigned the energy experience to be fair, effortless, green and simple for all customers. Following the acquisition of SSE Energy Services, today OVO Energy and its Retail partners serve nearly 5 million customers, all striving to deliver more affordable clean energy for everyone.
SSE Energy Services has been supplying power to millions of UK homes for decades. The technology infrastructure within the company had been built and maintained with dependability and assurance at its core.
Clayson is now empowering the 1,000 strong IT team to adopt a learn-fast, fail-fast culture and mindset, while at the same time maintaining the performance and quality of their outputs. Key to achieving this has been extending the company’s partnership with Expleo. Through the adoption of Expleo’ automated testing solutions, SSE Energy Services can now bring new products to market faster, without sacrificing quality.
With customers’ digital engagement increasing and the introduction of smart metering within homes, SSE Energy Services knew it had to focus on digital agility and innovative product offerings.
In order to accelerate this direction, SSE Energy Services appointed Philip Clayson as CIO in August 2019, bringing experience of driving fast-paced digital transformation for companies including News Corporation, BT and TalkTalk.
Clayson said: “With increasing numbers of new digital enabled products to deliver to market, at an accelerated pace, we needed to leverage technology and expertise to help us drive up our competitive advantage and increase our agility.”
SSE Energy Services formed a strategic partnership with Expleo, a leading technology and engineering consultancy. As the two companies previously worked closely together, SSE Energy Services had trust in Expleo’s expertise to help with a key part of the programme. This would help SSE Energy Services maintain performance and quality, but crucially boost agility, shortening product and system releases from several weeks to just a couple of days, by providing a pioneering approach to automation.
Automation first
Expleo was in an excellent position to advise the company on how to best move to a framework that automated the entire testing lifecycle for all of its complex and integrated retail systems.
Julie Heneghan, Client Director at Expleo, said: “Many companies use automation on low-risk, fringe applications and as a result deliver limited value to their organisation. However, our in-depth understanding of SSE Energy Services’ systems meant it was clear to us that an automation-first approach would deliver the biggest possible impact in terms of value.”
To help achieve the transformation, the relationship moved from a standard services delivery model, to a strategic and innovation-led partnership, with SSE Energy Services entrusting Expleo to deliver best-in-class testing and assurance that would reduce the cost and frequency of system defects.
Expleo helps SSE Energy Services to enable mass testing of the software deployed to customers for smart metering. This includes testing the smart meter itself before it’s installed into customers’ homes, to testing the app on the in-home display which helps customers see how much energy they are using.
“Now, instead of a traditional services supplier model, SSE Energy Services works in partnership with us to map out the future IT change roadmap safely in the knowledge that Expleo automatically delivers the quality assurance they need without any effort on their part.” says Heneghan.
Innovation to the fore
To best deliver the benefits of automation and other improvement initiatives in the future, SSE Energy Services and Expleo have created a joint innovation board with dedicated funds to formalise the creation of new ideas and concepts and ultimately put them into practice.
Combining the best of technology and engineering, Expleo is a digital partner for the future for energy and electric vehicle companies. As energy and mobility markets converge, Expleo provides clients with end-to-end expertise in the design, development and implementation of a seamless customer experience. Its track record of delivery in smart energy billing solutions, battery charging technology, electric vehicles and the wider smart grid puts it in a unique position to help its clients innovate for the future.
“Innovation is at the heart of what we do at Expleo,” says Stephen Magennis, Managing Director of Expleo’ s Technology business in the UK. “But for us, it’s about making incremental changes, on a continuous basis, to drive bigger overall gain. This also allows us to monitor and measure each innovation and work out what it’s actually achieved for our client’s business, so we can take a swift decision on whether to keep it or move onto something else that could potentially have even greater impact.”
SSE Energy Services has continuous insight into the progress of testing and innovation through Expleo’s Quality Intelligence Platform (QIP), part of its innovative AI and analytics offering. It monitors execution and results, demonstrating release on release productivity and efficiency gains by aggregating the data into a dashboard, giving a real-time and predictive view of progress, quality and velocity.
Tom Little, SSE Energy Services IT Delivery Manager, who played a leading role in the technical transformation, says: ‘’We want to get our solutions to market quickly, but we can’t sacrifice quality. There are critical journeys where customers rely on us to deliver every single day. Our automation-first approach and partnership with Expleo has helped us to deliver quality to our customers.”
Exceeding expectations
In applying the new automation tooling, SSE Energy Services is already seeing compounded benefits. These include smoke-testing new environments in near-real-time and a reduction in manual test effort of up to 65 per cent. “This enables the SSE Energy Services technology team previously involved in this area to have more time to focus on new initiatives for the company to accelerate the pace of change”, says Clayson.
The direct result for SSE Energy Services is that new customer offerings can be pushed through faster – helping it set the pace in the market. In fact, the speed of output is now 2-3 days, rather than 2-3 weeks or months with an overall cost saving of 60 per cent.
Technology + people + culture = pace
Having the right technological tools is a vital part of any digital transformation. But in order for the investment to be a success, there needed to be an internal shift within SSE Energy Services toward a highly engaged, learn-fast fail-fast culture and mindset.
To this end, SSE Energy Services invested in upskilling staff, including introducing formal accreditation in delivery management techniques such as Agile as well as technological disciplines to increase agility from the bottom up. Expleo aided this programme by providing Scrum Master training to key SSE Energy Services team members, including project managers and product owners.
Industry leading digital transformation for growth
With the acceleration of digital and agility at SSE Energy Services, it is now much more nimble when it comes to dealing with change. This proved crucial with the unexpected arrival of Covid-19. The fact that both internal and external partner teams were able to quickly pivot to operating virtually, with no impact on services, demonstrates that its transformational journey has brought additional benefit to SSE Energy Services and ultimately its customers.
“Our digital transformation means that IT is now an engine for growth and competitive advantage. It enables SSE Energy Services to swiftly respond to change. The team and our partners including Expleo should be proud of being part of what must be the biggest digital transformation the sector has seen due to Covid-19.” says Clayson.
The company’s successful digital transformation, underpinned by its pioneering adoption of automation in partnership with Expleo, means that it is continuing to set the pace of change in the industry.
Dan Jelfs Senior Vice President of Global Sales at Mobica, discusses how we are on the cusp of a connected digital revolution, making technology more pervasive and a key driver of strategic change to businesses and models
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Tell us about your career journey and your experience
I’ve worked in the global technology industry for about 25 years now. I landed in it so by accident, more than design, straight out of university. I’m not an engineer by trade. I went through Business School at university and my first role was at AT&T. I worked a lot in mobile communications and wireless networking in the 1990s. What I found very fascinating, and enjoyed was the way that technology changed people’s lives, usually in a positive way. I also liked the globallness of the industry and the opportunity to work with so many bright minds with different perspectives from around the world. I think fairly early on in my career, I realised I had a passion for innovation and that the large corporate culture that I was in wasn’t going to satisfy that.
I made quite a radical decision around the early noughties to leave a large corporate and move to a venture capital funded startup. It was really looking at the evolving mobile data services market, and what sort of content services could generate viable business models. I really spun through a number of other startup type businesses during the noughties and then joined a software services business in 2009.
I’ve really been doing software consultants and software services now for about 10 years. The reason I made that change is because the mobile devices world which I’ve been very focused on up until then, was to open source with the launch of operating systems like Google’s Android, most prominently in the battery. At a structural change within the mobile communications market that would drive demand for software services within that, I thought it’d be a very interesting journey to go on.
I’ve also got a huge passion for British technology companies. I think there’s not enough British technology success stories within the global technology market. So I joined Mobica about 18 months ago as a vehicle to try and do my bit to change that.
How does that make you the right person to bring about change?
What we move into now is a world of everything being connected and data science and artificial intelligence applications off the back of those things being connected. So I have that core experience around connected software, and then I’m able to help C-levels in companies in other industries that aren’t familiar with connectedness and digital, and bring all that experience to bear to help them on their transformation.
How has the technology conversation changed?
10-15 years ago, I thought the technology industry was far more discrete and defined. And in fact, some industries and many companies really didn’t need to dip any more than their toe into it. I think we’re on the cusp of a revolution now where everything’s connected, and through that the things that are connected we’ll be able to acquire artificial intelligence over time.
I just don’t think there’s any industry or there’s any company within an industry that has been great at embracing that now. I think that’s the fundamental difference for me. There were the technology industries that were more disruptive and defined. Now it’s totally pervasive and it’s a driver of strategic change to businesses and business models and industries. You just, you can’t avoid it, wherever you’re working.
How has the traditional customer changed?
There are more customers that are, as a legacy, not so technically proficient and need support to really understand the potential for strategic change the technology is bringing and how to implement that within their business.
Where does Mobica fit into this technology conversation?
We support customers in two areas, either modernization or transformation in relation to enabling technologies.
Modernization is probably not quite as strategic in context of the transformation piece. Now, a good example would be cloud applications which are quite a trend. In recent years, we’re really moving apps to the cloud. We help companies deal with the technical challenges that this new type of technology brings to the transformation. Part of the work we do is where there’s a combination of new technology that facilitates a fundamental redesign of the business model, and potentially of the structure of the company too. We help them think about the way to design that transformational change/
How do you define transformation?
In the transformation paradigm when you talk about strategic design, you look at what your brand might be in a digital environment or what the business model might be. Often the scenario is that companies are moving from tech non/digital to digital for revenue generation. That can fundamentally change the way they address the customers, the way the brand reaches out. So in many ways, the starting point for me is strategic design and non technical. The outcome of a strategic design process, though, becomes a very technical software engineering implementation.
What are the challenges?
Sometimes I can end up in a conversation and maybe the executives of the company aren’t quite sure, from a business case point of view, when to pull the trigger on a digital transformation… There’s an internal discussion that happens; maybe it’s in two quarters’. 12 months’ two years’ time. I think you could be kind of wrong. If you look at the end destination, you may as well just start into digital straightaway, don’t delay. But I think some internal wrestling around understanding the return on investment is sometimes apparent.
I also think about the cultural change within the technology environment, or the engineering environment of the company. I’m seeing the needs change from very established businesses whose technology hasn’t changed much over a couple of decades to suddenly needing speed, digital and agile. Culturally, from a software engineering point of view, like a Silicon Valley startup, that’s not easy in that it’s quite a barrier to affect change.
How do you go about changing mindsets and enabling a cultural change within a business?
We bring a lot of our learnings from the way we work with companies around the world, anonymized into the discussion to help realise that even though they don’t think they’re on the same page, they’re on a cliff edge. The future is digital, we were able to see some success stories of some really positive digital transformations as well, that you could point to that are often powerful in terms of changing the minds of executives as well.
How important is it to look outside your own industry?
It’s fundamental and there are enough of those kinds of stories in different industries to use already. It’s very helpful within that discussion to point to some very successful digital innovation stories.
It’s important to also look at where things haven’t worked to look at the failures and look at the mishaps as well, as much as you look at these case studies in the success stories.
Is tech replacing people?
Effecting that cultural change with the state in relation to the status quo is just too difficult, will take too long and costs too much. What we need to do is sort of start over and I’ve seen some companies create what are essentially new legal entities and new ventures, and build from the ground up. I’ve seen other companies create digital innovation and disruption units alongside their existing organisational structure and start to see that digital DNA move into the company, but from within what’s exists today.
I’ve also seen others who strategically partner with software services firms to bring that digital agile culture into the mix of their overall software, software engineering and technology capability to drive and effect change in the established culture and established engineering.
How has the supplier relationship changed?
We’re in a process ourselves of moving from a tactical partner to a strategic partner increasingly, and our strategic partners. The different dimension is the buyer is two or three levels higher in the organisation and therefore, either in or close to the C-suite, that they’re looking for long term collaboration and the souls of strategic challenge to their business.
What makes Mobica a partner of choice?
Within our engineering team, we create the space in terms of time invested into internal innovation projects that are really aligned around strategic technology bets that we make in regards to what’s going to be important in the future. If we do that correctly, that keeps us ahead of the curve.
Technology buzzwords?
I talked about strategic design earlier. It’s really that design and planning thing it’s really looking at, where are you and where are you trying to get to and what’s important on that journey. There’s always careful thought and planning before you scale out engineering projects.
Marketplaces change so much that it’s not going to be a straight line, so how do you account for things that aren’t going to go according to plan?
We propose an agile development process and you’re constantly iterating and constantly changing. Whilst you know the general direction of where you want to get to but you don’t necessarily take a stroll along together. So it allows for bends in the road and iterations to design as we go through.
Talk to me about the dynamic between incumbents and start-up companies?
I think enough large established companies have suffered and gone by the wayside. They’ve been cannibalised by a startup coming from nowhere. For everyone to be aware of these larger organisations, they need to create an innovation strategy of their own.
Ideally, you know, if anyone’s going to cannibalise their existing business models, they’d prefer that it was them. So I think there’s a lot more effort and thought put into that and less destruction caused by startups. It doesn’t stop the startups being acquired by some of these companies to complement their digital transformations.
What advice would you give in order to succeed?
Don’t underestimate the value of strategic design before you head out on the engineering journey that follows good design.
Welcome to another packed issue of Interface Magazine!
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This month’s cover exclusive features Dan Jelfs, Senior Vice President of global sales at Mobica, who discusses how we are on the cusp of a connected digital revolution, making technology more pervasive and a key driver of strategic change to businesses and models.
“In the transformation paradigm when you talk about strategic design, you look at what your brand might be in a digital environment or what the business model might,” he tells us. “Often the scenario is that companies are moving from tech non/digital to digital for revenue generation. That can fundamentally change the way they address the customers, the way the brand reaches out. So, in many ways, the starting point for me is strategic design and non-technical…”
“Sometimes I can end up in a conversation where maybe the executives of the company aren’t quite sure, from a business case point of view, when to pull the trigger on a digital transformation… But often, when you look at the end destination, you may as well just start into digital straightaway, don’t delay.”
Elsewhere, SSE Energy Services reveals how its pioneering adoption of automation is underpinning an industry-leading transformation that is setting the pace of change in the energy sector. Plus, we have exclusive insights from business leaders at Union Bank, Radius Networks, DeKalb County and Sij Group. And we outline 5 industries predicted for growth post-Covid…
Paul Bailo, PhD, MBA with a clinical degree in social work is a graduate professor at Columbia University and an executive working on combining digital transformation, digital strategy and data analytics into one powerful solution.
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How would you describe your work?
I like to say 90% of my job is saying no in a very nice way (ha ha) so organisations really get to the point very quickly and understand new models in this digital world. Because what has worked in the past, will not necessarily work in the future. It is a completely different paradigm with organisations in the financial world. And in the insurance world and in the government, and in fintech and banking. They all need to actually start thinking differently. My world is really like a Venn diagram, where I have my academic Columbia University educational world, where I’m pushing really hard trying to build a future data scientist. And my executive world, where I’m trying to educate executives and help them with their corporations and companies to be more effective.
How would you describe a digital transformation?
I think we first have to define digital for a company. And I think digital really is that heart of why a company exists, and what really matters. And it’s really not about the company, but it’s how you perceive the client you’re working for. And how do you make that customer experience greater in a very transformational stage. Looking at that customer journey, and how you make the person’s life easier, simpler and better. Because I think when you start talking about digital and digital transformation, I think everyone has a different definition of it. Neither are they right, neither are they wrong. I think it really comes down to the customer, and how you use digital. And when I say digital, I mean digital data, innovation, transformation, pushing forward in order to help organisations make unbelievable customer experiences, which then makes a happy customer, which then allows the organisation to build a loyalty bond with that customer and then drive revenue. My fundamental belief is, feelings drive actions, actions drive productivity, productivity will drive revenue. And if you don’t have a happy customer then the whole system falls apart. How do you look at data digital transformation to make your customers’ lives a hundred times better?
The customer journey has become a massive buzzword in recent years and certainly influences many digital transformations…
Oh yeah. Andrew, you make a really good point. It’s all about the competition, but it’s all about the new people, your new customers. I mean you have millennials, and young people and they are transforming every industry on earth. They’re not putting up with things that maybe you and I would put up with. The minute they don’t like something, they’re gone. One extra click, one extra step. And also, if the companies aren’t loyal in making their lives easier for them, they’re gone. When you look at the data, millennials hate banks and insurance companies. It’s terrible. They would rather bank at Google, Yahoo or Facebook to have a greater allegiance to the tech companies than the traditional banking corporations. When you look at the data, these large monolithic companies aren’t really engaging in the digital arena with these digital natives. Their customer base is dying off rapidly. And the only way you’re really going to get them back is to really understand that customer and how you make their lives easier.
So legacy institutions need to start being less risk averse?
Yeah, definitely. You’re better off making a wrong move than no move. Right? You’re going to have to start thinking about it. I think you really have to start thinking about this idea of a digital leader. And the first idea is that a digital leader is a human being. And how do you make someone’s life easier and better? But now I think you have to make sure these organisations have a culture that’s really supporting this idea of digital transformation throughout the enterprise. Sometimes you may have the will and you want to have the skill. So if you have the will you could always buy the skill or get the skill, to understand the version of a digital leader and what is it going to take to mastermind this cultural transformation. Or you have the skill, and don’t have the will. And that’s what I see a lot of, where people just don’t want to do this. Because the world is tough and most people don’t want to change. And we’re talking about a fundamental paradigm shift in the thinking of how most organisations behave. If you take banks, imagine you grew up in a bank, you spent 20 years at a bank and now you’re saying why are you even building a branch? This morning, I went to the bank four times today, I never even left my office. I don’t think this idea of a bank and branches exists today. You don’t need branches to do what you need to do. And these are fundamental paradigm shifts that have to occur in the world. And millennials, mobile technology, 5G… I mean the world is shifting drastically. And the underlying business models don’t hold true anymore. The things my parents told me to do, or not do, are exactly the opposite of what people do today. My mom would say, “Hey Paul, don’t go into a stranger’s car.” And what do we do now, we use Uber and Lyft and we go into strangers’ cars. “Don’t stay at a strangers house.” What do we do now, you have Air B&B. The models have shifted drastically.
How important is the customer journey and trust?
Make it easy for the customer, and then behave in a proper manner, and then actually build the trust and be transparent. Look, you don’t have to be all things to all customers. And if you can’t do what you want them to do, the fair answer is we don’t do that. It’s just simple, just don’t do it. If you’re looking for an electrician and you’re a plumber, don’t try to be an electrician. You’re just going to get yourself electrocuted. It doesn’t pay.
Talk to me a little about your ideal digital leader…
When you start thinking about digital transformation, it’s about having the right digital leader, and having a digital leader who’s actually human. You have to understand human behaviour and embrace that, and then make a bridge between human behaviour and the digital world, that’s the first thing. The digital leader has to be this visionary. You can’t just have these ideas of where you want an organisation to be, you want them to be able to share. And grab people in the organisation to share this vision, and this belief and get people excited about it. To actually feel and taste this vision of digital. And then you have to walk the talk. You can’t just be saying, “Here’s the vision, let’s go do this.” You have to show people, and you have to define it for the organisations. And what does it really mean for people in the organisation to be a digital organisation. American Express had this model and behaviours of what they wanted for an executive and this was transcended down to every person. This is what it looks like, this is the behaviour. This is what the digital leader has to do in order to transform and get a company ready for digital transformation. And when we talk about transformation, it’s really rooted in this idea of change.
And change is really one of the hardest things in the world do…
But the funny this about digital transformation/change, is we change every minute, every day. Change is a constant in our lives, but we sort of deflect it, and we’re afraid of it, as opposed to embracing it. Obviously within leadership you have to be a change agent and understand that this is not going to be easy, and don’t sugarcoat it. You have to be with the people, understand the people and hear them out. Make sure you have their heart, minds, and souls, and then build that plan, build that vision. Share in that. Talk the talk, walk the talk. And then really inspire people and make sure that you’re holding hands and walking forward together in the dark. The simple task of harnessing this brain power, and then winding people up and letting them go is so important. Why are you hiring really good people if you’re not going to really trust them and let them do their thing.
Leadership is so important isn’t it?
Yeah, you have to be bold and get a person who sees the company differently and who has the experience as a digital leader and understands human behaviour, innovation, technology and the customer experience. And that could lead and change the organization. You have to be a change agent. If you’ve been in the company 20 years, you’re going to think a certain way. And that’s the same way you always have. You have to radically change the way you’re thinking, and deal with the fact that this will not be easy. And be clear in terms of what you want. The DNA of digital has to be part of everyone’s mindset in order to make this work. Digital’s in the corner right there. And then you have technology in the corner over there. And then you have marketing over there. They all have to be digital. They all have to be under one roof and playing the same game. And having the right objectives is integral and identifying what those objectives are. Is it the enhancement of the customer experience? Is it digital transformation business processes? Is it the simplification of a service management system? Is it the optimisation of infrastructure? Is it the insights and the analytics that will drive competitive advantage? You really have to focus in on what you’re trying to do. You can’t just paint with a broad brush; you have to have these identifiable objectives attached to your long-term vision in order to transform these organisations. The elephant in the room here, is of course, the technology… You really want to make sure you have the right technology in order to enable this transformation. And what I’ve see a lot of times, is that people are selecting the wrong technology stack. I think a lot of it has to do with the fear of change and the fear of failing. Failure is critical piece that you have to embrace. Because you will fail, you’re going to have problems, this stuff’s not easy. The quicker you can embrace this, the quicker you can get over it, and move the organisation forward.
Interface Magazine talks to Vladimir Arshinov, IT Director at steel producer SIJ Group regarding the company’s massive digital transformation
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Going into 2017, SIJ Group (Slovenian Steel Group) – Slovenia’s biggest steel producer and one of the largest manufacturers of stainless and special steels in Europe had typical IT structure with semi-independent IT departments on each plant. And like many modern enterprises, SIJ was at work drafting a strategy to transform its operations, systems and processes into a more unified structure in a bid to improve productivity, safety and the all-important bottom line.
Vladimir Arshinov is SIJ’s IT
Director and his initial focus in 2017 was trained on the digital
transformation of SIJ’s IT department to a more transparent organization with a
clear workflow. Previously, IT was a department of innovation with each individual
plant having its own independent function, none of which connected with each
other, often across varying geographies. “This meant that lots of efforts were wasted
solving the same issues with different solutions,” Arshinov reveals.
At the end of 2017, SIJ
established a Project Management Office. PMBOK was selected as a master
methodology and the Head of PMO received PMP certification and developed
internal regulation documents, rules and methodology. After finalizing the
initial establishment phase, hiring project managers and the organization of
the operational work, SIJ came to the conclusion that to raise the scope and
complexity of the projects program, they needed a tool. The MS Project
Management Server was duly selected and implemented allowing SIJ to simplify
observation of the progress of projects and control, while ultimately reducing
duration. Project team meetings were almost eliminated, and the distribution,
control and execution of project tasks, were assigned to the project team
members who managed and controlled projects including budget consumption. Each
project member would then be measured for effectiveness.
Turning the IT department
into a leaner function was a massive first step for SIJ as it needed a firm
foundation upon which all future innovation could sit. And so, the next step in
SIJ’s internal IT transformation was aimed at the most sensitive and critical
area: software development. As with many metallurgical companies SIJ had a bulk
of different IT systems, which were supplied or developed in the past and had
to be either permanently supported, or, due to the business requirements,
changed. One concern with the legacy system was the reliance on locally based
productive software developer engineers developing new solutions and then,
after, supporting them, resulting in a massive drop in development speed, as
development and the subsequent support increased. This situation was causing
overloading, burnout and frustration, triggering a desire to change something;
sometimes resulting in employer change. However, SIJ IT considers people as its
major asset and were determined to break the vicious circle of “one system
– one person – forever”.
“What we did from an organizational point of view was to unify all geographically distributed developers from 4 different companies into the several virtual groups in each department,” Arshinov explains. “Each group has a Team Leader role, who assigns tasks to the group members and controls the execution of each individual task.”
Development
at SIJ is now organised according to an agile approach using scrum boards and
Microsoft Project Server to control all the time sheets of the people involved
in the projects, plus their schedules and budgets. SIJ uses
Microsoft Azure DevOps Server for unified storage of inter-company source code
and Change Request Scrum board monitoring and control. Process and technical
solutions now allow SIJ to involve external software development partners into
the development process while controlling their activities, deliverables and
costs. Developers can now use the Azure DevOps Server
with the scrum board and are now able to register change requests in their
system by themselves, where they see the progress of all individual change
requests coming through the process with the integration of the IT Director
informing the exchange and updating the status of the task development.
In October 2019 SIJ revamped
and migrated its Corporate Business Intelligence system to a new MicroStategy
platform. The project took six months and provided SIJ with an extensive
corporate Business Intelligence system with more than 180 different dashboards
covering production, finance, sales, procurement, HR, Legal and investment
functional areas. The overwhelming majority of the data now uploads
automatically and the business intelligence tool has
created a unified reporting system across the group utilizing the same source
of data in order to integrate it. “There was huge involvement of the business
customers with Oracle BI and this year, we moved to this new platform,”
Arshinov explains. “The front end of the system was changed (from Oracle BI) to
MicroStrategy for usability and a unified interface. Now, SIJ has a system that
looks the same no matter the device it’s accessed from. This project allows us
to organize and develop the team that tests the trial usage and develops the
processes of the PMO (Project Management Office) inside the IT function.”
The BI System contains the
entire spectrum of corporate data and allows SIJ to move quickly and
transparently when taking a management decision, while reducing the number of
mistakes, misunderstandings and time-consuming meetings.
The next system to be unified across the group was the Salesforce CRM system, which is now fully integrated. Then, an Oracle supplier portal followed, which opened the possibility of organizing tenders, thus massively simplifying the purchasing process. Oracle Innovation Management is another successful implementation, which, although a relatively small project, has had a big influence on the business transformation and innovation through increased flexibility. “It is also used to motivate people to suggest improvements and new innovative ideas,” he says.
So,
what have been the major successes, according to Arshinov, following the
ongoing digital transformation at SIJ? “The main difference between now and
then was that each individual company was living alone, and I see now that the
IT function in this case is unifying the people and allowing them to speak in a
single language. It doesn’t matter if it’s a steel center or a big plant,” he
explains. Costs have been dramatically reduced too, outsourcing being a prime
example. In 2016, SIJ was spending more than 70%
annual budget for operational external services.
For 2020, that part of budget reduced to 40%. Meanwhile, the capital investments part of the
budget has grown from 4% in 2016 to 56% in 2020.
The
implementation of a Supply Chain Planning system (from Quintiq) incorporating
the Oracle Business Suite, has improved the delivery, safety and performance of
SIJ’s plants. “We improved Delivery Performance OTIFF (on time and in full) of
a stainless steel plant by 12.8% in six months,” he enthuses. “And we shortened
the production cycle by 15,4% from ordering to shipping, which is a brilliant
result within six months of going live.”
In
SIJ Matal Ravne has replaced the melt shop technology system and entire plant
manufacturing execution system to replace the obsolete legacy system – which
had zero planning functionality – with PSI Metals. “First of all, we’re increasing the level of understanding
and the knowledge of the internal IT team, while dramatically decreasing
project cost by involving internal specialists into the supplier team. That
allows us to save several hundred thousand Euros of project budget and it’s a
win-win situation for the supplier as well. First of all, the supplier is
receiving our team, which knows the production and the limitations and has
extensive inside knowledge. At the end of the day, the commercial value, in
this case, is the cheaper price. Cheaper than anybody else is able to receive.”
Another
and no less important project for Sij Metal Ravne is the joint development work
with Comtrade Laboratory Information Management System (LIMS). Laboratories in
metallurgy companies are complicated and highly demanding environments with
unique processes required for quality control of all products and this solution
covers and improves core laboratory processes and will be highly integrated
with the PSI manufacturing execution system from one side and Oracle ERP on the
other.
Through this massive digital transformation, SIJ has also managed to increase quality control through sophisticated AI, which has massively impacted its operations. The acquisition of scrap metal, a major influence on SIJ’s bottom line, can now be influenced through advanced detection systems that can detect impurities, thus representing huge savings when it comes to procurement. “The conservative saving is €1.4m,” he says.
The
digital transformation at SIJ is touching every aspect of the company’s growth and
is certainly an ongoing journey rather than a destination. “We are not an IT
company, that’s understood,” Arshinov says. “But we are supporting services
inside the business, and of course our main concern will always be supporting
the production of steel. But we’re not there yet.”
Leveraging Radius Networks location technology for curbside pickup, in-store order delivery, and payments.
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Technology has and always will be used to solve problems. At the very basic level, technology is developed and used to make things simpler. Just look at our day to day lives and the way that technology has, for the most part, made our experiences simpler and this has changed the way we as consumers engage with retailers and restaurateurs. We now expect and outright demand that the businesses we enter and purchase food and items from offer the same level of seamlessness that we experience in our own homes. The interesting thing however, is that this isn’t necessarily a new challenge for restaurants and retail stores; these businesses have been looking to enable the most seamless and effective customer service since the very beginning. The only real thing that’s changed is the tools that they have at their disposal.
“At the end of the day, I think this goes for business philosophy in general, you really need to understand the problems that your customers have, and then solve them,” explains Marc Wallace, CEO and Cofounder of Radius Networks, a location technology service provider. “In our case, customers are businesses, such as restaurants, grocery stores, retailers or casinos; so we are targeting very specific problems. In most cases, those problems are taking wasted time out of the equation.”
Picture the traditional, and maybe even stereotypical, restaurant environment, where a food order is ready to go to the table and the service staff has to locate and identify the corresponding table to that order. In some instances, more than most, they may even walk throughout the entire restaurant before arriving at the right table with the right customer. Through wireless-enabled location technology, Radius Networks has transformed the customer experience by allowing businesses to track customers, improve profit margins and ultimately increase customer retention.
Customers have, and will always, vote with their feet, and in order to retain those customers, businesses need to be able to remove the pain points. As Wallace noted, wasted time is one of the single biggest pain points in customer service. Radius Networks offers location-based curbside pickup, in-store and table service solutions, as well as mobile payment technology to remove not only the one pain point, but multiple pain points. “We’re addressing other key problems, such as payments. When you dine-in at a restaurant and are in a hurry to leave, trying to get your server’s attention to pay for your bill can be frustrating for the customer. It leaves a bad taste in their mouth at the end of their dining experience,” says Wallace.
“We’ve developed solutions for making payments remotely without contacting the server. The server is notified when the bill is paid, and they can focus their attention on real problems that other customers have instead of shuttling credit cards back and forth.”
At the time of writing, the world has been gripped by the COVID-19 pandemic, a truly unprecedented event that has completely devastated lives and economies all over the world. It has also completely ripped up the rulebook when it comes to food and retail, with lockdown restrictions forcing businesses to either close down entirely, or pivot to delivery services. Radius Networks’ FlyBuy curbside pickup solution was actually launched over 12 months ago, but it has fast become a key technology offering that is solving an unforeseen problem. By automating the curbside delivery service for customers, FlyBuy provides a turnkey, end-to-end solution that uses the customer’s location for a faster, easier order pickup experience. “There was already a pre-existing return on investment (ROI) with FlyBuy because we were reducing the wait times for customers when ordering for pickup, which results in more frequent visits” says Wallace. “Throughout this pandemic, curbside delivery has become the only channel that people can do, so the importance of it has risen dramatically. It was once within a business’s top ten things it needed to consider, and has now risen to the very top of their to-do list.”
Radius Networks is currently offering a free version of both its FlyBuy curbside and buy-online-pick-up-in-store (BOPIS) software for restaurants, retailers, and non-profits during the COVID-19 crisis.
By its very definition, location tracking technology appears to be very intrusive. It is tracking locations and using that data to inform decision making, after all, and naturally that can cause a little fear and a hesitation. Wallace acknowledges these concerns and understands them wholeheartedly. “We had a decision to make early on in the company whether we were going to harvest data and use it for marketing purposes or whether we were going to be a privacy-centric company and focus on providing a solution,” he says. “We chose to be a privacy-centric company, mostly because all of us as individuals wanted that for ourselves.”
“When it comes to us as a location company, are very transparent with our customers and our businesses, so that they can be transparent with their consumer customers about what we’re doing with their location data, what we’re using it for, and how long we’re keeping it.”
This transparency is built into the very DNA of the company. FlyBuy will only ever use the location data to alert restaurant/retail staff that a customer is on the way and onsite to pick up their order, and only after the customer has opted-in to sharing that information. After a period of time has passed, they will then delete that data entirely. Its policy dictates that it does not, and will never, share that data with any third party, giving customers peace of mind that their data is safe and used only as agreed when they opt-in. Wallace believes that, while the reluctance and fear is understandable, consumers have access to services’ policies and can ‘do some homework’ in order to allay them. “I think, given the amount of options we are given today, customers can no longer just assume every location company is tracking or doing something devious with their information. They need to be aware when they approve location usage and when they don’t,” he says. “If they can be sure that sharing their location brings value to them, whether it be to have a car service come to their exact location, or their groceries meet them at their car immediately upon arriving in the pickup zone, they will happily share their location. Once they have established a level of trust in the people that are requesting location permissions, and see the benefits it brings to their lives, there is no problem.”
Radius Networks was founded in 2011, and for the best part of a decade, it has grown from strength to strength as a business, working with the likes of McDonald’s, Five Guys, and Coca-Cola, as well as being recognized in the INC 500, the Deloitte Fast 500, and the CIO Magazine’s Most Promising Digital Experience Solution Provider. But none of these successes would have been made possible, without a solid and sound foundation within the business. “I’ve been told by people ‘wow you guys got really lucky.’ Luck had absolutely nothing to do with it. Our mission is to solve problems for businesses, and right now businesses need our help more than ever. There were a lot of really difficult times over the years where we worked hard and earned the right to stay in the game, and we are once-again earning it right now,” says Wallace.
“Take FlyBuy as an example. I’ve been asked as to whether I thought this piece of technology that we developed over the last few years would ever be as important as it is right now. Yes. Yes I did, and so did everyone else on our team, and that’s key to our success as a company. Every single person at Radius Networks is engaged and believes in what we do.”
In these times of crisis, the spotlight has shifted significantly onto those business fundamentals and Wallace is extremely proud of the business he has built and the people within it. “The business principles that we’ve been practicing over the last few years have paid off. We are a strong company with sound fundamentals and sound financials. We haven’t over extended ourselves, either from an investment perspective or from an expenses perspective and that’s paying off for us now,” he says.
“It is tough in the current environment to point to positives, because you almost feel ashamed to do so. I think we’ve done a lot as a company to help others; we’ve given our product away for free to hundreds of small businesses, thousands of locations, with no obligation, and it’s a testament to the work we have done to get to this point. A lot of companies are doing a lot of good work to help each other right now and they can do so because they are built on solid foundations.”
Those foundations start from the very top. Wallace is a key advocate in communication. Much like Radius Networks communicates in an open and transparent way with its customers, the same rules apply from within. He admits that the pandemic has, ironically, made that communication better in some aspects, but it has always been a key part of what makes Radius Networks tick. “We’re talking to our customers all the time. My team is the best team in the world. They’re working in overdrive right now, communicating at such a high level, and listening to customer needs, because their needs have changed dramatically,” he says.
“As the CEO, I try to have frequent hands-on-deck tag-ups with everybody to give them an update and try to be as transparent as possible about the status of the business and what’s happening. I do this so they can feel comfortable that they have a job today, and they’ll have a job tomorrow. We work together to come up with our team goals, and stay aligned and upfront about everything that may come up along the way.”
Listening to the customer is key. That much is no secret. But when it comes to technology, listening to customers is absolutely essential when ensuring that what you’re offering is what the customers need and what they want. Wallace’s role as the CEO is not to sit at the top of the business and leave it to everyone else. He is very much active and engaged at every level to ensure that everything Radius Networks is doing is driven by the customer. Wallace is proud of the culture within his business and often finds himself sitting on a call with a major customer and beaming at how well his team listens and understands the customer’s needs and how Radius can successfully address them. “I’m so proud that we, as a team, have a culture that takes so much pride in their work,” he says. “Our people have always been solid employees, pre pandemic, but they have become absolute rockstars today.”
The world as we know it has changed forever and we cannot begin to predict what this new world will look like post pandemic. One thing is for certain, communication, and the way in which businesses engage with their customers, will never be the same again. Radius Networks has enjoyed success after success over the past ten years, and as we all experience great uncertainty, the goal for Wallace is to continue providing valuable location technology for many years to come. The key to succeeding, regardless of such uncertainty, remains the same for Wallace and his team. “Persistence,” he says. “It’s about persisting through the bad times, just like the good times, and trusting your business fundamentals and experience. Being transparent with employees and having a good team around you is key.”
Mercedes aren’t just luxury vehicle engineers, they’re innovators. This should hardly be surprising given the fact that Karl Benz, back…
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Mercedes aren’t just
luxury vehicle engineers, they’re innovators. This should hardly be surprising
given the fact that Karl Benz, back in 1886, was patented with the rights to
the development of the first ever car, a three-wheel vehicle, titled
Motorwagen.
A leading car brand in
the automotive industry, the German manufacturer, Mercedes, have mastered the
art of luxury engineering. It’s unsurprising that this brand, originally from Stuttgart,
are the creators of some of the most premium models of vehicles we’ve been
graced with.
After Benz’s successes
over the years, they have certainly been on the frontline of technological
innovation which allowed them to perform better than their competitors. If
you’ve had your Mercedes A Class for example in for a service, you’re probably
aware of the main features these beasts have to offer. However, in this
article, we take a look at ways the German manufacturer has kept a distance
between themselves in and other automotive companies in the industry,
maintaining the title of tech leaders.
Popularly known as the
G-Class, the Gelandewagen is a SUV like never before. Initially built as a
military vehicle back in the late 70s, it has become synonymous with the
affluent members of society throughout the world. Sharp edges and a bold frame
sit outside the natural smooth ergonomic design of Mercedes-Benz. However,
there is no denying that this is a fan favourite —the six-wheel model even
became popular with the Pope. Meanwhile, the 300 SL model, recognisable from a
movie series featuring a certain Mr Bond, was the car that helped bring Benz
back after the Second World War.
Without a doubt the
most iconic vehicle in the Mercedes lock up, despite astounding capabilities on
the race track and an exterior design which makes it look like it belongs on
the winding roads of the French Riviera accompanying a Stella Artois advert, it
wasn’t that that made the car so memorable. Gullwing doors, opening up as
opposed to out, were a first — but, despite what one may think, this wasn’t a
style choice. In fact, the shape of the car’s chassis prevented conventional
doors being included.
When Imagination Becomes Real Life
The F200 model was
initially introduced as a concept prototype with a wide range of technological
augmentations. Helping form the basis of the design used in the S-Class and the
CL-Class, the F200 imagination, interestingly, didn’t include side mirrors or
your standard rear-view. Instead of these features that aid visibility, the
F200 included four cameras mounted in the corners of the roof, and one
additional camera fixed to the rear bumper.
Output from the
cameras was fed to a digital screen where the mirror would typically be
located. Despite the fact cars in 2019 are still using mirrors, quite
remarkably, the F200 started a revolution that would see parking cameras
included in the vast majority of vehicles. Meanwhile, ambience was high up on
the list of priorities of the F200, with an industry first lector-transparent
glass roof, which, with the touch of a button, would morph from see-through to
opaque.
Anti-lock Brakes
The concept of the
anti-lock brakes was originally created by Gabriel Voisin in 1929, which
prevents wheels from locking. However, it wasn’t until the 1970s when a joint
venture between Bosch and Mercedes saw the system introduced into production
vehicles. Now, ABS, which helps the driver maintain control of the vehicle, is
a standard feature on every vehicle following the introduction by Mercedes. The
safety in vehicles was rapidly enhanced as a result.
Creation of the Airbag
It’s hard to believe
that airbags weren’t always a necessary feature of cars. Back in 1981, after
more than a decade of development and testing, undoubtedly the world’s most
crucial safety feature was finally introduced. Becoming a common feature in all
Mercedes vehicles as of 1992, two years before the passenger side airbag was
introduced, there is no denying that the airbag has transformed automotive
health and safety.
Implementation of Touch-Sensitive
Controls
A concept which has
completely revolutionised motoring is ease of use,
Ease of use is an
increasingly important aspect of motoring, for example consider cruise control
and how this has drastically enhanced the everyday driving experience. Back in
2017, Mercedes unveiled the tech features available on their next generation
E-Class, one of which being an innovative system which lets the driver control
the infotainment system from the steering-wheel using finger swipes. Not only
is the system effortless and considerably safer than the alternatives, it was
also an industry first when Mercedes rolled it out.
It is undeniable that
Mercedes are an industry leader in the automotive industry. From innovation in
safety to amusement, Mercedes have truly thought of it all. One step ahead of
their competitors, we can’t wait to see what other advancements they have under
their sleeve.
As a result of the COVID-19 pandemic, we are witnessing an unprecedented increase in home working, which requires remote access for tools and communications to conduct our daily jobs. This disruption is putting IT infrastructures at risk, while validating much of the industry’s investment in business continuity, resilience, scalability, accessibility, data protection and security.
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With a global at-home workforce now entirely in place, what can IT professionals and CIOs do to ensure their private and public clouds can keep up and remain safe? And what steps and tests should they take to support a protracted change in the way we work? According to a recent Gartner survey, more than 74 percent of CFOs and business finance leaders expect at least five percent of their workforce will never return to their usual office workspace — becoming permanent work-from-home employees after the pandemic ends.
Even in the face of a global pandemic, we continue to promote a culture that requires easy and instant access to our tools, information and each other over cloud collaboration tools like Slack, Google Drive, Office 365, Microsoft Teams, as well as in-house applications.
This demand on IT requires private, public and hybrid clouds to have the agility, scalability and security to support entire workforces no matter where they are. IT leaders who have planned for this worst-case scenario are ready to scale at a moment’s notice. Likewise, they’ve already considered the impact on licensing, vulnerability and added traffic from employees working at home over personal devices and unsecured networks.
IT professionals who support an at-home workforce need to understand the difference between employees “running” applications and “accessing” applications. When technology is set up and configured correctly, it should be easy to access. That’s the whole idea of SaaS and cloud. The challenge is, how do you administer it? How do you run it?
Organisations that maintain private clouds onsite, which might not be accessible during stay-at-home orders, need a plan to make repairs physically — like swapping hard drives, replacing switches or cables — when their employees are home.
Likewise, whether at home or work, the end-user experience should be the same. If all apps and tools are optimal in an office environment, how do you make those adjustments ahead of time, so remote employees still have the same access and capabilities as if they’re working in the office? And how do you maintain your security and IT compliance obligations?
Where and how to start?
The easiest advice might be to avoid trying to boil the ocean all at once. If your applications and data aren’t on the cloud already, it’s possible to mobilise secure VPNs and encrypt applications for mobile devices. If you’re on the cloud already, you’re several steps ahead of others. But you still need to work with your cloud service provider to review your workloads, applications, and data requirements.
At the same time you’re focusing on accessibility, remember to address your vulnerabilities. Right now, cybercriminals are stepping up their attacks to take advantage of remote employees. Phishing attacks are at an all-time high on small and large businesses, as well as public resources like hospitals and healthcare providers.
Now’s the time to reinforce your organisation’s IT security and compliance guidelines, many of which include the relevance of when employees travel or occasionally work from home. This includes a refresher on password policies and how to identify and report phishing attempts. Help employees with securing their home networks, and all the other policies and guidelines they would typically follow at work to protect your company and customer data. This might also be an excellent time to train employees on document and data retention best practices.
COVID-19 will create additional security threats as attackers attempt to take advantage of employees spending more time online while at home and working in unfamiliar circumstances. Some of the biggest threats associated with the pandemic include phishing emails, spear phishing attachments, cybercriminals masquerading fake VPNs, remote meeting software and mobile apps.
Above all, you must have the same level of resilience and redundancy plans in place for home working as you do for onsite, even if you are 100 percent in the cloud. It is important to recognise that the same problems that happen on a day-to-day basis when you’re in the office can also occur when the office is vacant.
Prepare for the new normal
Going forward, all businesses should plan for an eventuality like COVID-19 happening again. This means understanding data security, business continuity, resilience, scalability, accessibility and so much more. For example, you may not need extra capacity and compute power now; but you need to know that within minutes you can get to that number. And, as I mentioned earlier, a lot of organisations have internal-only networks to manage power supply, fans, cooling and switches. What if you can’t get into the building?
Futureproof and understand the boundaries between personal and company devices and assets. Understand what you need to put into place to protect your business and your employees.
And finally, companies that are leveraging cloud services need to communicate frequently with their providers to address future needs and concerns. Make sure you know what they can do ahead of time to keep your remote workforce operating. Hopefully, these circumstances will be short-term, and life will return to some normality soon, but my advice is to always plan for every eventuality and what may now be the new normal.
Traditional banks will fall even further behind in market share and customer experience due to the global coronavirus pandemic, warns the CEO of one of the world’s largest independent financial advisory organizations.
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The comments from Nigel Green, founder and chief executive of deVere Group, follow research that the use of financial apps is up by 72 per cent since mid-March.
Mr Green observes: “The pandemic has accelerated those trends that were already shaping business. These include greater inclusion of tech into our every day lives.
“Coronavirus has ushered in a new world, with digitalization and new technologies fuelling the changes. This can be seen by demand soaring for video-calling platforms such as Google Hangouts, Skype, FaceTime and Zoom amongst others, as more people than ever work remotely.
“It’s also underscored by the increasing use of fintech apps which allow users immediate, on-the-go, 24/7 access to, use, and management of their money.”
He continues: “There’s a historical precedent for what’s happening now.
“Banks and other traditional financial services providers were, in most cases, spectacularly caught off guard by the 2008-2009 financial crash.
“As they found their way into a new world with a new regulatory landscape and new customer expectations, business and tech developments were way down their to-do list. They were in survival mode.
“This is when agile, tech-driven challenger banks and fintech firms swooped in to fill the void left between what traditional financial services companies, especially the traditional banks, were offering and what customers were expecting, especially in terms of customer experience.”
Mr Green goes on to add: “The fintech firms, which offer mobile banking, savings and investment apps, and peer-to-peer lending, amongst other services, now have a decade of development, experience and expertise over many traditional banks.
“As even more people are now embracing fintech due to Covid-19-triggered social distancing, isolation and lockdowns, and as the apps are growing in popularity due to their convenience, increased security, and as people become ever-more tech-savvy, it’s likely that ‘bricks and mortar’ banks will fall even further behind in market share and customer experience.”
The deVere CEO concludes: “Coronavirus is going to further disrupt the wider banking sector. It will act as another catalyst for people to seek fintech alternatives to access, manage, use, save and invest their money across the world.”
Carlo D’Alanno, Executive Creative Director at Rufus Leonard explores how the integration of your brand and your people with your technology is the secret to delivering meaningful and game-changing disruption.
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What makes a truly transformational
and disruptive idea? The answer is two-fold. Firstly, these ideas understand
and respond to new behaviours while leveraging new or underutilised technology.
And secondly, they often come from ambitious organisations who understand how
to integrate the right people and skills to stretch a vision and deliver on a
single, motivating purpose or mission.
In short, game-changing ideas create
real-world impact for people and businesses. And this happens when creativity
and technology come together. After all, companies that harness technology to
deliver their promise grow 4X faster than their competitors.
Carlo D’Alanno, Executive Creative
Director at Rufus
Leonard explores how the integration of your
brand and your people with your technology is the secret to delivering
meaningful and game-changing disruption.
Your brand is your difference
Brands that
dominate have a credible offering delivered in a way that others can’t (or don’t
think of first). Think Nike+ turning a footwear brand into a premium fitness
provider. Zipcar proving the sharing economy can work with real stuff. Or
Kickstarter connecting bedroom entrepreneurs with investment. Find your
distinct position and build around a mission that your people can buy into and
your customer experience can deliver on.
It’s about
identifying and investing in hero moments along the journey – specifically
where your brand could credibly provide a unique experience – which will create
a memorable experience for your customers. Let’s take a look at a few examples.
Threads – customer journey mapping and digital ecosystem design at its best
The idea: Personal, luxury fashion shopping through Instagram and
WhatsApp/WeChat.
The stretch: For a sector that’s build around appearances, Threads have
understood that so many customers now engage with brands via social and avoid
retail spaces when in ‘research mode’. They have taken a seemingly vital
channel out of the mix.
The transformation: Pioneers in chat-commerce, they’ve built a platform where
someone sees an item on social, starts a chat with an adviser and completes the
purchase in the app. This means integration into social platforms, and
retailer/manufacturer inventories, as well as secure payment technologies.
The impact: With an average transaction value of $2.5k per-spend, and a
recent funding round of $20m, they have become a significant partner in the
fashion retail mix.
Squarespace – democratising a previously closed world
The idea: A website-building tool for anyone with a computer and an idea.
The stretch: They democratised the previously closed world of website
creation, giving the tools to the people with the business idea, but not the
design and code skills.
The transformation: Building code into templates transformed the way sites can be
built without the need for training or expertise. Complete with a user
interface that champions their own principles of simplicity, and accessibility.
It’s a rare thing – a beautiful piece of software.
The impact: 2m+ subscribers, valued at $1.7bn, hosting circa 350k websites
with 22% market share (self-editing and publishing plus hosting). These big
numbers speak to their success in growing a previously untapped niche: entrepreneurs
and small-scale start-ups looking for a cost-effective and beautiful route to
market.
R2 Data Labs – from manufacturing to a data analytics powerhouse
The idea: A data innovation catalyst inside Rolls Royce.
The stretch: Improving the way customers operate by delivering untapped value
and insight from aggregating a myriad of data sources.
The transformation: Utilising new technology in Machine Learning and AI, they’ve
moved the company from a product-based to a service-based model. Working in
partnership with other Rolls Royce business units using manufacturing and
design to build a virtual environment for experimentation that will give
customers unparalleled insight and the ability to understand their data in new
visual ways.
The impact: These data analytical capabilities improve efficiency,
productivity and risk management. New data insight is impacting the ways Roll
Royce design and manufacture their products and has opened up new revenue
stream in aftersales care. R2 Data Labs is building data innovation
communities through skill sharing, accelerator programmes and partnerships.
Creating a culture of shared creative leadership
To embed game-changing thinking into
your organisation, it’s important to nurture the integration of passion and
profession, encouraging your people to be the driving force behind shaping your
business. So ask yourself and your employees these questions:
Passion: how might we help people find the ‘one thing’
that motivates their work?
Purpose: how might we identify the common goal that
brings individual passions together?
Flow: how might we create a way of working and
environment that lets a team get immersed and motivated and, be supportive
and honest?
Risk Taking: how might we make it possible,
and acceptable, to stretch our clients outside of their comfort zone?
Your key takeout
How you
answer these questions will be unique to your business, culture and sector. The
common thread that all successfully, strategic and creative brands share is a
willingness to integrate and delegate. To bring together people with diverse
talents, passions, backgrounds and skillsets and to support them to solve the
company’s biggest problems for themselves.
The end of the Wild West of digital advertising is nigh: data is the new black gold, and advertising has been mining it recklessly. That can’t go on.
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While the glory days of data harvesting were great for ad-tech, they were less great for advertising. Data-breaches, Cambridge Analytica, and “stalker ads” that overuse targeting have all helped to undermine consumers’ trust. Back in April 2019, Kantar’s ‘Dimension’ study showed 54% of UK consumers objected to being targeted based on their past online activity (a figure I suspect their 2020 iteration of the report will demonstrate has gone up, given consumers’ growing awareness of the implications of online targeting), 70% of consumers said they see the same ads over and over again and only 11% said they actually enjoy advertising. Wow. Those findings, and many others like them since, underline the crisis of trust digital advertising is facing.
Private – Keep Out
There is a complacent view held by some in the ad-industry, that privacy concerns can be ignored as “this year’s storm in a teacup”. Pay lip-service to the law, and carry-on as before. But that’s of course missing the point – long-term trust erosion – and hiding the real cost to the industry.
I agree that most of the public don’t care deeply about privacy. Joe Public is unlikely to switch off Facebook or use the Tor browser. But that doesn’t mean they’re happy.
People don’t like feeling powerless or taken advantage of. Today, that’s exactly how they feel, and they’re becoming more vocal – with those voices starting to carry weight. In Ipsos-Mori’s survey last month (commissioned by the Centre for Data Ethics and Innovation and Sciencewise, and forming the basis of the UK Government’s official Review of Online Targeting), almost all participants felt that change was required to the way in which online targeting, in particular, currently operates, with many saying that they were sufficiently concerned about aspects of the process, or about the potential harms that could occur, that they remained unsure whether the benefits outweigh the harms.
But it’s not all bad…
That said, the same study revealed that the majority of people also felt that if steps could be taken to resolve these concerns, they would likely advocate that overall online targeting makes a positive contribution to society. So, there we have it – a window of opportunity, a second chance for adtech, for advertising as a whole, and for brands willing to make integrity a core part of how they advertise specifically, and operate more broadly.
Remember, that same Kantar study also demonstrated the power of targeting when it
is done right, with 44% of respondents saying they do enjoy ads that are directly relevant, 45% agreeing that the ads tailored to them are more interesting than other ads, and 61%
saying they prefer to see ads relevant to their interests. It is not relevant ads that people dislike — it’s the surreptitious targeting. So as an industry, we need to change the model from treating people as “targets”, to treating them as partners.
Time for a reset
First off, we have to begin with a commitment to genuine transparency about what customer data is held and how it is used. The bombardment of consent checkboxes may help to provide legal cover, but it is harmful to the deeper purpose of building trust and a brand-customer relationship. Asking “what is legal?” is the wrong approach. Instead, we should start with respect for the customer, and put them at the centre of engagement design. Other parts of the B2C world of course already understand that the customer is at the centre of everything – creative agencies being one obvious example. That understanding and acceptance now needs to extend to the infrastructure of advertising.
Policy change and tech advancement must go hand in hand
Positive change here requires both policy and technical development. We do need new tools. Tools for users to easily manage their profile data — to make it easy for them to both block and allow data-use, without fighting through a swarm of in-human checkboxes.
Part of that will be establishing standards for users (via their browsers and phones), publishers (via the SSPs), and brands (via the DSPs, and their own data) to work together.
The key piece will be making it easy for users to setup an enforceable data policy that reflects their attitudes. A data policy would say what you reveal, and how and to whom. A good tool would make it easy for people to manage that, and stay informed and in control without spending much time at all. That will in turn need a data ecosystem, where data can be used without losing privacy.
Enabling personalization, gaining trust
With a better data ecosystem, there is still untapped and valuable data — for example the CRM and other customer-history data that brands hold — which could be brought in.
For the public, a trustworthy data ecosystem would unlock many benefits. Consumers find personalization useful. Whilst they are somewhat concerned about their privacy, as Gartner’s study showed, 62% of consumers said personalized attention is important when it helps them get a better deal, and nearly half said they valued it for saving time and making the purchase process easier. Findings which pretty much match those from the Ipsos study last month.
The end of the Wild West could ultimately be good for the industry. If brands are fair and transparent when they connect with the public – through all touchpoints, online ads included – there is certainly an opportunity to build more valuable engagement.
After all, the Wild West of gunslingers was not nearly as productive as the modern California that today makes movies about gunslingers.
By Daniel Winterstein, CTO & co-founder at Good-Loop
As UK businesses look towards the cloud to enable digital innovation, more than half (58%) say the move has been…
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As UK
businesses look towards the cloud to enable digital innovation, more than half
(58%) say the move has been more costly than envisaged, according to new
research from Capita’s Technology Solutions division.
However, the
research reveals that cloud migration (72%) remains the top transformational
priority for most organisations, ahead of process automation (45%), big data
analytics (40%), and artificial intelligence/machine learning (31%). This is a
further indication that organisations see cloud as a core component to
effectively enabling these next-generation technologies.
The ‘From Cloud Migration
to Digital Innovation’ report, which surveyed 200 UK IT decision
makers, cites reduced cost (61%), improved speed of delivery (57%), and
increased IT security (52%) as the main reasons for organisations to move to
the cloud. However, 90% of respondents admitted that cloud migration had been
delayed in their organisation due to one or more unforeseen factors. Issues
such as cost (39%), workload and application re-architecting (38%), security
concerns (37%), and skills shortages (35%) all point to a process that is more
complicated than expected.
“Cloud adoption is a critical foundational step towards opening up real
transformative opportunities offered by cloud-native technologies and emerging
digital platforms and services. While some forward-thinking organisations are able to keep their eye on
the goal, the complexity of the migration and application modernisation process
tends to introduce delays and cost-implications that slow down progress,” said
Wasif Afghan, head of Cloud and Platform at Capita’s Technology Solutions
division.
A more
complex and costly migration than expected
On average,
those businesses asked had migrated 45% of their workloads and applications to
the cloud. However, this did correlate to organisation size as organisations
with more than 5,000 employees have further to go, with less than a third (31%)
of workloads and applications migrated. This could be the result of having
larger, more complicated systems.
Nearly half
(43%) of respondents found security to be one of the greatest challenges they
had faced during their migration. A lack of internal skills (34%), gaining
budget approval (32%), and progressing legacy migration solutions (32%) were
other significant challenges organisations had faced.
In fact, half
of respondents found their organisation had to ‘rearchitect’ more workloads and
optimise them for the cloud than they had expected. Further, only just over a
quarter (27%) found that labour/logistical costs have decreased – a key driver
for moving to the cloud in the first place.
“Every migration journey
is unique in both its destination and starting point. While some organisations
are either ‘born in the cloud’ or can gather the resources to transform in a
relatively short space of time, the majority will have a much slower, more
complex path. Many larger organisations that have been established for a long
time will have heritage IT systems and traditional processes that can’t simply
be lifted and shifted to the cloud straight away due to commercial or technical
reasons, meaning a hybrid IT approach is often required. Many organisations
haven’t yet fully explored how they can make hybrid work for them, combining
the benefits of newer cloud services whilst operating and optimising their
heritage IT estate,” said Afghan.
A platform
for innovation
Despite some of
the challenges outlined in the report, the majority (86%) of respondents agree
that the benefits of cloud are compelling enough to outweigh its downsides. For
more than three-quarters (76%) of organisations, moving to the cloud has driven
an improvement in IT service levels, while two-thirds (67%) report that cloud
has proven more secure than on-premise.
Overall,
three-quarters of organisations claimed to be satisfied with their cloud
migrations. However, only 16% were ‘extremely satisfied’ – indicating
that most organisations have not yet seen the full benefits or transformative
potential of their cloud investments. In addition, 42% of respondents currently
believe that cloud had ‘overpromised and underdelivered’.
“It’s no longer enough to think
of cloud as simply a way to benefit from initial cost savings or just another
place to store applications and data. Today, the move to cloud is driving a
spirit of innovation right across the enterprise, paving the way for advanced
digital services to be rolled out in a highly accessible, faster and more
cost-effective way – whether that’s AI, RPA, complex data analytics or machine
learning. Only through the alignment of IT and lines of business leadership –
in terms of goals, vision, direction and mindset – can organisations fully unleash the potential of cloud to
address their key business objectives, whether that is improving business
agility, delivering an enhanced customer experience or enhancing business
efficiencies.” said Afghan.
Airport chaos, banking glitches, cancelled surgeries, data loss; the potential consequences of IT faults are well known, far-reaching and the…
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Airport chaos, banking glitches, cancelled surgeries, data loss; the potential consequences of IT faults are well known, far-reaching and the subject of frequent headlines. Still, fewer than half of the UK’s SMEs are prepared to cope adequately in the event of IT disruption. This is according to the latest research* commissioned by full-service IT consultancyILUX.
The survey, which canvassed the opinions of over 500 UK-based SMEs, revealed that just two fifths (42%) of those polled had an IT disaster recovery plan in place. This is despite the fact that a significant proportion (24%) had already experienced damage or loss due to an IT fault.
Of the proportion who have experienced damage and / or loss:
• 43% experienced the loss of important data
• 40% experienced a drop in staff productivity
• 29% suffered a loss of sales / transactions
• 24% experienced data breach / GDPR implications.
Data loss can potentially have very serious consequences for companies, especially if the loss involves personal data protected under the General Data Protection Regulation (GDPR)[1], as was the case for almost a quarter of respondents. Failure to comply with GDPR can lead to significant financial penalties, as the recent heavy fines issued to airline British Airways and hotel chain Marriot bear out.
James Tilbury, Founder of ILUX, comments: “Although a significant proportion of UK SMEs have experienced serious problems as a result of IT disruption, it seems that the majority are still failing to take adequate steps to prevent or mitigate faults.
“This suggests that preparing for the risk of IT disruption is still treated as more of an afterthought than an essential aspect of business planning by the majority of SMEs. I would urge caution to any firms thinking in this way. Businesses today tend to be critically reliant on technology to power their everyday processes and keep operations running smoothly, securely and efficiently. Not only that, the right technology-driven processes can also set them apart, delivering innovation, improved customer experiences, a competitive edge – and ultimately growth.”
These findings are explored in more detail in the ILUX Whitepaper “Business Worries Keeping You Up At Night?” which can be downloaded here https://www.ilux.co.uk/just-relax.
When Malta-based construction and property enterprise Vassallo Group embarked on a company-wide digital transformation, it looked to CIO Carlo Aquilina…
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When Malta-based construction and property enterprise Vassallo Group embarked on a company-wide digital transformation, it looked to CIO Carlo Aquilina to build the entire infrastructure, operations and innovations at the group…
Walk through the streets of the
beautiful island of Malta and you will not be able to escape the work of the
Vassallo Group. Property, hospitality, education and healthcare, the Maltese
construction and property company completely reshaped Malta following the
devastation caused by the Second World War. Indeed, Vassallo Group embarked on
a mission to ‘rebuild the nation’ to its former glory and beyond.
Building on its strengths, the Group carries a legacy that is over 70 years old, and over the years has diversified its operations that have brought about expansion and investment. Today, Vassallo Group, stands at the forefront of several different sectors in the local market that include property and construction, furniture and interiors, elderly and disability care, catering, hospitality, architecture and education. The Vassallo Group is a large, complex enterprise and represents a unique challenge to its IT function, which provides technological solutions and support to all of the companies and their users.
Vassallo Group talks to Interface Magazine
Carlo Aquilina was approached to take on the
role of CIO at Vassallo in 2015, having spent a while building up an IT team at
a manufacturing enterprise. “When I started in manufacturing, IT needed lots of
work. We started from scratch. We built up the whole IT department and the
whole team. When Vassallo approached me, they offered me that challenge again
as they really lacked IT. It was a real challenge, but I built my team and we
started on what needed to be done.”
Vassallo Group previously had a shareholding in
an IT company and this sister company was providing IT, but the level of
support was not sufficient for their local clients, thus Aquilina was asked to
build the IT function that would serve the 1,900-plus employees and its
extensive client base. “When I joined, I was tasked with the project: to start
from scratch. I gave the board of directors a number of options. Should we go
on premise, should we go with another hosting company, should we go hybrid,
should we go cloud? The main ambition was very simple and I was given six
months to come up with a solution where we gave our clients, our clients,
meaning our users basically, a brand new environment with zero downtime. It was
all firefighting in that first year.”
Vassallo went 100% cloud with Microsoft Azure, which Aquilina believed to be the best short-term, and long-term solution. “We’re a Maltese company. We’re not an IT focused company. IT is here to provide service to the business. Our business is not IT. We’re not a gaming company. All of our products are Microsoft, and so it was an obvious choice to move to Azure.” Vassallo agreed to go 100% to the cloud, having drawn a blank against the large capital expenditure associated with on-premise. “With cloud, you don’t invest in anything and everything is top of the range. Of course, it also helps to be paying operational costs and not capital costs. That was the way forward and then they (the board) embraced it. There was a number of partners who approached us to do this, to help us with this migration. I chose CyberSift, which was a start-up, actually.” An advantage to working with a start-up is that they’re not encumbered by a large kind backend and can move audaciously and quickly and this was certainly an appeal to Aquilina and his team. “I knew one of the technicians; a brilliant engineer and that helped. Plus, the price we were given was also from a start-up perspective.”
Vassallo Group. A Maltese institution
CyberSift viewed the chance to work with
Vassallo with similar relish and the then start-up provided a specific engineer
to be onsite with the IT team at Vassallo for the full duration of the
migration. “Whatever I was asking, I was getting,” Aquilina explains. “‘Okay,
we’ll do it for you, but you’ll have to promote us, after.’ Now I’m promoting
them. So, we had engineers working for us and I didn’t need to grow my team. In
fact, we’re a very small team.”
The key thing Aquilina and his team built in
that crucial first year was ‘trust’. “I had the trust of the board of directors
because every time they asked me something, I satisfied their request. So,
there was trust. At the end of the day, it’s a family-owned company. Trust is
very important.”
Aquilina and his team were given six months to
deliver the project and took 2-3 three months to design and implement the
infrastructure. The following three months, they contacted suppliers, before
moving the software. “If it’s on premise or on cloud, there was remote access.
It was teamwork, everyone pulling the same rope. Whenever one of the suppliers
told us, ‘Listen, we’re not available this week. Let’s do it next week. We’ll
slot in someone else. We’ll set meetings. We’ll explain what we are doing.’ All
they needed to know is that we were moving from server A to server B. They did
it for us because it was their software, their app, their solution.”
With any large-scale technological transformation there are challenges although Vassallo seemed to evade many of the pitfalls through great organisation. “I don’t think we had actually the biggest challenges because it was all planned out. We used to meet every day with the engineer who used to work for us and my team. It was a case of ‘What happened yesterday, what happened today, what is going to happen tomorrow and why? Are we on track? Yes. If not, why? What can we do?’ We worked late at night so that we could achieve it. It was all based on trust and teamwork. It was a case of open-heart surgery because the business wanted to work. The business kept on working even though we were doing open-heart surgery. We had that support from everyone. Everyone understood that this needed to be done. We had support from everyone, from all the partners, from Microsoft, everyone.”
Even though digital transformation involves technical infrastructure, software, servers and cloud, people are still integral to a successful outcome. “Yes, they are extremely important,” Aquilina explains. “There are the users, the customers and the IT team. We are a very small team and that really helped, because a huge team would require lots more organisation and more hand holding. It was me who was both sponsoring and managing the project. I had the lead engineer who was doing the actual work, remotely. They had an assistant administrator who was assisting. People are so important.”
Vassallo Group holds an annual internal awards
and in 2016, the IT department was awarded ‘Best Customer Focused Department’
even though it had been, in Aquilina’s terms, firefighting. We were there
constantly, anytime, any day of the week. The team and I were presented with
this trophy, which proved my theory that the company had move to something much
more stable.”
Now Vassallo Group is reaping the benefits of
this transformation. “IT-wise, we are working on a business intelligence
project. Now we have the infrastructure ready and a solid base or foundation, I
want to give something back to the business. We implemented an ERP solution,
which Finance, Logistics and Operations are using. I don’t want the directors
to go into board meetings with huge amount of papers. I want them to go in with
just a laptop. The data is live. We’ve already done that for one of the
companies and it’s working. You can connect to the TV to project live data.
That is business intelligence. We’re working on the other companies too. Now
that they know what they can get, everybody’s bombarding us with requests. Of
course, we’re taking our time and that is ongoing.”
From BI, Aquilina wants to harness the power of
AI in board meetings. “I want to give them the facility to project live data,
but I also want to give them the facility to change the data accordingly. They
will see the results with AI.” Recruitment could be a big beneficiary of these
initiatives too. “What if we employ 100 people? AI will work out the costs,
work out the benefits of employing that many people. Then you can take an
educated decision. ‘Should we employ 100 or 200? Let’s put in 200 more
employees. What’s the cost?’ AI will work out the costs as well as the
benefits. That’s all in progress. However, these are very sensitive tools that
we need to use and if the tool gives you the wrong information, then you will
make the wrong decision. I explained this to the board and they gave me the
time needed to do it properly. We have to be very meticulous. They understood
and told me, ‘Whenever you’re comfortable, we can start using.’ The CIO has to
have 100% trust from the board of directors, because if there’s no trust, they
keep on asking, ‘But why and how?’ That is the way forward.”
Providing technological infrastructure, new
software and cyber security for such a large company means that Aquilina’s
hands are certainly full. “We support about 1,900 employees and 500 users. I
can afford to have a relatively small team because we have a solid base, and a
solid infrastructure. I have a wonderful team. I recruited everyone from
outside the business. I didn’t find anyone here, so they all respect me. We’re
all friends at the end of the day, although I am their manager. We talk about
anything and I help when needed. So, there’s trust from them and the senior
management, which I believe is extremely important. It’s a wonderful place to
work.”
As UK businesses look towards the cloud to enable digital innovation, more than half (58%) say the move has been…
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As UK
businesses look towards the cloud to enable digital innovation, more than half
(58%) say the move has been more costly than envisaged, according to new
research from Capita’s Technology Solutions division.
However, the
research reveals that cloud migration (72%) remains the top transformational
priority for most organisations, ahead of process automation (45%), big data
analytics (40%), and artificial intelligence/machine learning (31%). This is a
further indication that organisations see cloud as a core component to
effectively enabling these next-generation technologies.
The ‘From Cloud Migration
to Digital Innovation’ report, which surveyed 200 UK IT decision
makers, cites reduced cost (61%), improved speed of delivery (57%), and
increased IT security (52%) as the main reasons for organisations to move to
the cloud. However, 90% of respondents admitted that cloud migration had been
delayed in their organisation due to one or more unforeseen factors. Issues
such as cost (39%), workload and application re-architecting (38%), security
concerns (37%), and skills shortages (35%) all point to a process that is more
complicated than expected.
“Cloud adoption is a critical foundational step towards opening up real
transformative opportunities offered by cloud-native technologies and emerging
digital platforms and services. While some forward-thinking organisations are able to keep their eye on
the goal, the complexity of the migration and application modernisation process
tends to introduce delays and cost-implications that slow down progress,” said
Wasif Afghan, head of Cloud and Platform at Capita’s Technology Solutions
division.
A more
complex and costly migration than expected
On average,
those businesses asked had migrated 45% of their workloads and applications to
the cloud. However, this did correlate to organisation size as organisations
with more than 5,000 employees have further to go, with less than a third (31%)
of workloads and applications migrated. This could be the result of having
larger, more complicated systems.
Nearly half
(43%) of respondents found security to be one of the greatest challenges they
had faced during their migration. A lack of internal skills (34%), gaining
budget approval (32%), and progressing legacy migration solutions (32%) were
other significant challenges organisations had faced.
In fact, half
of respondents found their organisation had to ‘rearchitect’ more workloads and
optimise them for the cloud than they had expected. Further, only just over a
quarter (27%) found that labour/logistical costs have decreased – a key driver
for moving to the cloud in the first place.
“Every migration journey
is unique in both its destination and starting point. While some organisations
are either ‘born in the cloud’ or can gather the resources to transform in a
relatively short space of time, the majority will have a much slower, more
complex path. Many larger organisations that have been established for a long
time will have heritage IT systems and traditional processes that can’t simply
be lifted and shifted to the cloud straight away due to commercial or technical
reasons, meaning a hybrid IT approach is often required. Many organisations
haven’t yet fully explored how they can make hybrid work for them, combining
the benefits of newer cloud services whilst operating and optimising their
heritage IT estate,” said Afghan.
A platform
for innovation
Despite some of
the challenges outlined in the report, the majority (86%) of respondents agree
that the benefits of cloud are compelling enough to outweigh its downsides. For
more than three-quarters (76%) of organisations, moving to the cloud has driven
an improvement in IT service levels, while two-thirds (67%) report that cloud
has proven more secure than on-premise.
Overall,
three-quarters of organisations claimed to be satisfied with their cloud
migrations. However, only 16% were ‘extremely satisfied’ – indicating
that most organisations have not yet seen the full benefits or transformative
potential of their cloud investments. In addition, 42% of respondents currently
believe that cloud had ‘overpromised and underdelivered’.
“It’s no longer enough to think
of cloud as simply a way to benefit from initial cost savings or just another
place to store applications and data. Today, the move to cloud is driving a
spirit of innovation right across the enterprise, paving the way for advanced
digital services to be rolled out in a highly accessible, faster and more
cost-effective way – whether that’s AI, RPA, complex data analytics or machine
learning. Only through the alignment of IT and lines of business leadership –
in terms of goals, vision, direction and mindset – can organisations fully unleash the potential of cloud to
address their key business objectives, whether that is improving business
agility, delivering an enhanced customer experience or enhancing business
efficiencies.” said Afghan.
Mike Dargan, Group CIO of UBS, the world’s largest wealth manager discusses how UBS is shifting its digital strategy and…
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Mike Dargan, Group CIO of UBS, the world’s largest wealth manager discusses how UBS is shifting its digital strategy and transforming itself into a truly digital bank through agile transformation, engineering culture and how this is changing the way UBS is delivering technology for its clients.
Can you tell
me a little bit about what’s been going on within UBS’s technology division
when it comes to that shifting of team culture?
At UBS, the focus on the culture of our
technology team has been something that’s really been huge. We see culture as the
platform on which we ultimately do everything else. If we have the right
culture, we can deliver on strategy, we can innovate, we can execute. We can
therefore deliver great products and services for our stakeholders, and
therefore for our clients. Like any platform culture needs to be tweaked,
maintained.
What kind of
challenges come from cultural shifts? No two people will respond the same way
to any form of change, so how do you factor that into this transformation?
In some ways I wouldn’t call it a transformation. I think culture is something
that is precious. The culture at UBS is good and special, but I think we’d
always look to evolve a culture. So what we’ve done over the last couple of
years is we’ve stepped up the focus on our engineers. So we’ve designed
programs to raise that profile within firm. We’ve developed a technical career
track. We’ve given them much more responsibility.
g)
How does
that approach tie into a wider vision of UBS becoming something of an
engineering powerhouse?
We’ve launched a Distinguished Engineer Program.
It has three levels, distinguished engineers, distinguished fellows, and then
certified engineers, which really lets engineers progress along a technical
career path, if you like, rather than a managerial one.
It also recognizes technical achievements with
things like badges. In the first 24 hours of launch we were really overwhelmed
by the demands. We had 600 people register on the first day, and things like
that show us that there is massive demand by our engineering talent and that
they want to focus on building things and solving problems.
Technology at UBS is critically important. It’s
a very large part of UBS overall. Now the core of UBS is and will continue to
be banking, but I think banking will transform more and more to be digital
interaction, technology enabled, et cetera. So the importance and power of what
the engineers do directly and in the background will become more and more
important.
What does
agile mean to you, and what kind of things are you doing to take this agile
approach?
In some ways, I dislike the word, but in some
ways, I love the word. So we need to, as an organization move more and more to
being agile. But what does that mean? We want to have expedited delivery done
in combination with our partners and really having teams of engineers sit with
business product owners and really drive things together. So they need to sit
together under a shared vision for that product, understand the same challenges
and opportunities and then build the best possible solution for our clients.
Now, we’re doing that in different ways. In the
investment bank we’ve got hybrid pods, which is a model that puts
co-development with business and technology together. And really, I mean I
think the way this has been launched is pretty cool. So it does away with the
concept of us in tech and them in the business, but it’s really about shared
ownership to deliver products. It’s working. Teams are happier, outcomes are
better, new products are emerging faster and driven improvements are happening
effectively all the time.
In the digital factories, which we have across the globe, these are really well established across a lot of industries, but we’re seeing a lot of success with the adoption of this model in wealth management. And the proof point is, we’ve done almost a hundred thousand releases to prod through this year, which is over 10% more than last year. So we are getting more done, better, faster, cheaper.
Group CIO, UBS, Mike Dargan
I understand
that UBS took part in a hackathon event, can tell me what exactly a hackathon
is?
The hackathon here at UBS had a little over 600
global participants as people coming together over a very short time period,
focusing on the solution, bringing the solution together, spinning up a
solution overall. Now these are done in different industries, different
environments. They can be done for hiring, they can be done for just cracking
up a solution. But these are something that I think is a really cool way to get
people focused, involved, and bring that culture, if you like, almost back to
the day to day.
How are you
working to empower your workforce and prepare for the future workforce of UBS?
the most important piece around a culture is how
it evolves and how people learn and adapt. Now that I think it’s important
almost at any age. Empowerment I think is increasingly important.
We are due to see a lot of change powered by
technology within banking overall. I mean, we’re seeing it in all areas. The
banking landscape is evolving fast and we need to make sure that our digital
strategy enables us to stay competitive.
I think the onus for every individual, for every
leader, for every participant is evolving and learning. So I think there are
many aspects where the industry will change. There are many aspects we know
about, there are many aspects we don’t know about. There will be new
technologies and/or ways to use those technologies. So I think it’s also, you
know, not to get too buzzwordy, but being very nimble and flexible is the most
important.
On a
personal and professional level, how do you continuously challenge yourself and
challenge your way of thinking so that you stay ahead of the changes in the
market?
I’m lucky and privileged that I get to meet many
people. I get to listen to many people and learn from many people, both within
UBS and in the broader market. So I think recently we’ve been obviously hiring
a number of people who have brought in new perspectives and expertise. There’s
a whole bunch of people within UBS who I think day to day bring in that
expertise from what they do, and what they do day to day, as well as market
participants that we meet
What do you
think is the key to achieving success in a transformation?
I think there’s really two parts. The first is
be curious. Find out what you can learn, what you can experience, what you can
do or you can question about how you operate and how others operate and how you
can bring that into what you do. And the second, and I give this advice a lot,
is to understand how do you continue to be a better version of yourself? Not
someone else, but yourself. Challenge yourself to question how you can
continually self-improve the person you are, and the one you want to be.
Our cover story this month features an exclusive interview with Jon Davis, CTO of Village Hotel Club, who reveals how a digital transformation future-proofs a technology infrastructure. Village Hotels is currently undergoing a major digital transformation journey in order to better serve the modern guest and offer a digital ready experience like no other. Village Hotel Club operates 30 hotels across the UK and by its own admission, its hotels are “much more than a bed for the night – they are a place to meet, socialise, work and get fit” – a clear sign that the business understands that the guest experience has changed massively.
We also have a revealing interview with Bill
Barry, Vice President of Procurement and Sourcing at Access, one of the fastest
growing paper and digital
document services and storage providers in the world. Barry, upon joining the
company in 2018, was tasked with a vision of building out a best-in-class
sourcing and procurement function, developing and implementing the policies and
procedures in order to achieve that vision.
Elsewhere, we catch up with UBS CIO Mike Dargan
and Carlo Aquilina, CIO of Maltese construction giant Vassallo Group. Plus, we
list all the top events and conferences from around the world and highlight five
top tech innovators to look out for in 2020.
Peltarion, leading AI innovator and creator of an operational deep learning platform, today announced the findings of a survey of…
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Peltarion, leading AI innovator and creator of an operational deep learning platform, today announced the findings of a survey of AI decision-makers examining what they see as the impact of the skills shortage, and suggestions on how to overcome it. The research, ‘AI Decision-Makers Report: The human factor behind deep learning’, presents the findings of a survey of 350 IT leaders in the UK and Nordics with direct responsibility for shepherding AI at companies with more than 1,000 employees.
The
report finds that many AI decision-makers are concerned about the business
impact of the deep learning skills shortage. 84% of respondents said their
company leaders worry about the business risks of not investing in deep
learning, with 83% saying that a lack of deep learning skills is already
impacting their ability to compete in the market. These companies are exclusively
focusing on recruiting data scientists (71% of AI decision-makers are actively
recruiting to plug the deep learning skills gap), and this is already impacting
their ability to progress with AI projects:
Almost half (49%) say the skills shortage is causing delays to projects
44% believe the need for specialist skills is a major barrier to further investment in deep learning
However, almost half (45%) say they are struggling to hire because they don’t have a mature AI program already in place
“This
report shows that companies can’t afford to wait for data science talent to
come to them to progress their AI projects. The fact is, many organisations are
already starting to lose their competitive edge by waiting for specialised data
scientists. The current approach, which relies on hiring an isolated team of
data scientists to work on deep learning projects, is delaying projects and
putting strain on the talent companies do have,” explains Luka Crnkovic-Friis,
Co-Founder and CEO at Peltarion. “In order to solve the deep learning skills
gap, we need to make use of transferrable talent that can be found right under
companies’ noses. Deep learning will only reach its true potential if we get
more people from different areas of the business using it, taking pressure off
data scientists and allowing projects to progress.”
Less
than half (48%) of respondents said they currently employ data scientists who
can create deep learning models, compared to 94% that have data scientists who
can create other machine learning models. This shortage is having a direct
impact on teams: 93% of AI decision-makers say their data scientists are
over-worked to some extent because they believe there is no one else who can
share the workload. However, with the right tools, others can make a serious
impact on AI projects.
“Organisations
need to move projects forward by bringing on existing domain experts and
investing in tools that will help them input into AI projects. This will reduce
the strain on data scientists and lower deep learning’s barrier to
entry,” concludes Crnkovic-Friis. “We need to make deep learning more
affordable and accessible to all by reducing its complexity. By
operationalising deep learning to make it more scalable, affordable and
understandable, organisations can put themselves on the fast track and use deep
learning to optimise processes, create new products and add direct value to the
business.”
Companies undergoing digital transformation need to map out the path. Responsibility for driving digital transformation across the enterprise lies with the C-suite. The CEO, chief marketing officer (CMO), chief human resources officer (CHRO) and chief operations officer (COO), among others, must work together to make the transformation happen. However, this can be difficult to achieve as certain members of the C-Suite are more proficient with technology than others. This article will look at how to overcome resistance/challenges at a senior level to any digital transformation strategy.
I find the interesting aspect of the rapid development in technology is
that it has little to do with ‘digital’ but it is instead fundamentally driving
businesses away from linear based workflows to neural programs where all parts
are interconnected.
The challenge for any business embarking on a digital transformation
project is moving away from a business culture where siloed work streams could
deliver their parts of the project at specific points in a pre-ordained project
plan. This would be mapped out using
project management techniques such as the use of visual Gantt charts which gave
clarity over the breakdown of every item required for delivery within a
transformational project with the business owner and/or team members expected
to deliver this portion of the plan at specific times.
Digital transformation has taken this well-worn methodology and crumpled
it into a ball and created change where nothing can be done in isolation and
every action has consequences on all areas of business. The result of consumers becoming ever closer
to brands and brands striving for authenticity and purpose to deliver to their
consumers means production, sales, marketing, technology, finance, human
resources and any other function within a business all need to deliver with
‘joined up thinking’ or in real terms, the same focus and goals.
As such, companies have realised that their
processes, their products and even the reason for their entire existence needs
to change in order to survive this revolution. However, the C-suite are
struggling to adapt because this isn’t a clearly defined problem and there
isn’t a historical precedent to follow.
So, what does this mean for those C-Suite executives who had their
fiefdom, where they, with their teams controlled and implemented the strategy
in order to deliver the objectives of their sphere which would feed into the
wider business objectives?
In days of old, a business problem would have
been identified and a decision would be made to implement a technological
solution. With the recommendation
approved, the C suite, usually the Chief Technology Officer, would be tasked to
deliver the project. This suited all the
C suite members as it meant that the expertise of each member of the executive
were clear and there was a clear delineation between their roles and
responsibilities.
Now any change or decision has consequences that affects other areas of
the business and similar change in other areas of the business affects
them. The fourth revolution has bought
the historical business divisions closer together, technology has meant that
when discussing strategy or plans, the decision makers need to understand the
effect across all areas of the business.
Every business needs to operate as a single collective, it could be said
they need to operate with a start-up mentality, with entrepreneurial spirit
where the focus is the end goal not immersed in the process to achieve it.
The business needs to have that drive where everyone is focussed on the
overall strategy and interested in delivering it together for the benefit of
the business, not for the benefit of their specific expertise.
The C-Suite need to understand this doesn’t mean they need to know the
answers or become far reaching experts in areas they have limited to no
knowledge of. They have to have their
personal goals aligned with the right questions and be open minded to
understand their responsibility as leaders is to create the environment where
the people within the business can deliver for the success of the business not
for the betterment of the division they are part of.
This moves the discussion at a C Suite level
away from a technological based discussion, away from a place where there might
be reticence due to an individual’s relationship with technology to either be
part of the discussion or even worse, not commit to their viewpoints as they
defer to other who they view as experts.
It moves the transformation away from digital to strategic.
But digital transformation is nothing to do
with the build and delivery of the systems, it is nothing to do with the
evolution of the business processes to work with the new transformed business, but
it is everything to do with the strategic path that the company needs to
take in this new era.
The fourth industrial revolution, where change
is happening at an ever increasing pace, requires the C Suite to have a clear
understanding of critical milestones from a business perspective, with
diversity of business views based on expertise and experience, to ensure large
scale digital transformation programs stay on track to deliver the requirements
to deliver the survival, growth and success of their business.
Now in its eighth year, the Tech Trailblazers Awards, the first independent and dedicated awards program for enterprise information technology…
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Now in its eighth year, the
Tech Trailblazers Awards, the
first independent and dedicated awards program for enterprise information
technology startups, has revealed its shortlist of the most innovative entrants
and concepts in enterprise technology. The shortlists, selected by the Tech
Trailblazers’ panel of
leading IT industry experts, are now open to public vote to add to the
opinions of the judging panel and help determine the winners in all categories.
To view the shortlists, and
vote for your favourites, please visit http://www.techtrailblazers.com/shortlist
before 23.59 Pacific Time on Friday, 14th February 2020.
Tech Trailblazers Awards
comprises the best startups across a wide range of enterprise tech categories
including:
Artificial
Intelligence
Big Data
Blockchain
Cloud
Container
FinTech
IoT
Mobile
Security
Storage
Firestarter
Award
Female
Tech Trailblazer of the Year Award
Male
Tech Trailblazer of the Year Award
Rose Ross, founder of the Tech Trailblazers
Awards, said “Each year the judges are faced with the increasingly difficult
challenge of selecting shortlists in a wide range of tech categories from some
of the most innovative enterprise tech startups from around the world. Huge thanks
to our judges who, once again, have taken on this difficult task. The Tech
Tech Nation, the UK network for ambitious tech entrepreneurs, today reveals the 30 companies joining its prestigious Upscale programme for…
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Tech
Nation, the UK network for ambitious tech entrepreneurs, today reveals the 30
companies joining its prestigious Upscale programme for the UK’s most exciting
and fastest growing scaleup tech companies.
Now in
its fifth year, the Upscale 5.0 cohort reflects the maturity of the tech
landscape in the UK with considerable growth in key company statistics. Most of
the companies on the programme have already raised a Series A round, and the
average raise has increased from £4.2m in 2017, to £7.2m in 2020. Average
revenues have also increased by 64% from £1.1m to £1.8m over three years, while
the average number of employees when joining the cohort has grown by 48% from
31 to 46.
Some of
the biggest success stories of UK tech, such as Monzo, Bulb, Improbable and
Bloom & Wild, have been through the programme, and the 30 new companies
represent the next generation of digital household names.
This
cohort reflects just a small part of the UK tech scaleup ecosystem – in total,
there are almost 5,000 UK tech scaleups which add £17.2bn to the UK economy and
employs almost 200,000 people. UK scaleups outperformed their peers in 2019,
with companies raising £10.1bn, more than France (£3.8bn) and Germany (£5.4bn)
combined, and are spread right across the UK.
The
Upscale programme is designed to support the UK’s leading scaleups by tackling
the leadership challenge in UK tech. A recent report by Zenger/Folkman found that management and leadership skills are
lacking in just over half of all leadership teams, and organisations that
invest in developing leaders are 2.4 times more likely to hit their performance
targets and almost double their profits.
Upscale
sessions include addressing how to scale yourself as a leader, and how to scale
internationally. The programme aims to create a peer-to-peer network of
companies on their scaleup journey, and includes sessions led by tech
entrepreneurs from some of the UK’s most successful companies, including Nilan
Peiris, the VP of Growth at Transferwise and Will McInnes the CMO at
Brandwatch. Companies are selected through a judging process of tech
entrepreneurs and established VCs, including Anthony Fletcher, CEO of Graze and
Cherry Freeman, CEO, Lovecrafts as well as entrepreneurs who have gone through
the programme themselves, such as Aron Gelbard, CEO of London-based Bloom &
Wild.
30% of
companies joining the programme are from outside of London, and are based in:
Manchester, Cardiff, Cambridge, Leeds, Brighton, Belfast and Newcastle.
Companies hail from all different tech sub-sectors – showing the depth and
breadth of technology in the UK today. 17% of companies on the programme this
year are in the healthtech sector, 17% are in SaaS and 17% are in E-commerce.
Cloud computing, fintech, legaltech, AI, edtech, proptech, tech for good and
adtech are also represented on the programme. While E-commerce and SaaS are
evidently still pivotal to UK tech, the makeup of the programme also represents
the rise of companies applying technology to societal issues, including
healthtech, which has seen an increase in scaling companies of over 473% over
the last decade in the UK.
Nearly a quarter (24%) of UK IT companies believe their customers are less happy in January than any other month,…
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Nearly
a quarter (24%) of UK IT companies believe their customers are less happy in
January than any other month, according to new research.
The
survey, by quality assurance and improvement platform, EvaluAgent, also found that 24% of IT businesses
reported their lowest levels of customer service in January.
This
reflected the responses from tech sector customer service employees themselves,
with 43% confessing that their standard of service tends to drop around the New
Year and into January.
Worryingly,
the survey also revealed that 39% of customers have come to expect the customer
service they receive from companies to drop throughout December and January.
This annual slump in customer satisfaction can be directly linked to employee
engagement, which also falls in January.
According
to the report, 35% of IT businesses find their customer service employees are
unhappiest in January, while more than two fifths (43%) believe employees are
at their least engaged.
While
75% of customer service employees said they struggled to stay motivated
throughout the year, 40% admitted to January being their least productive
month, pointing to a huge opportunity for businesses to increase employee
motivation and customer service levels.
When
asked whether they thought their business could do more to increase staff
motivation during January, 91% of those surveyed agreed. This shows there’s
scope for employee engagement and motivation to be dramatically improved during
this crucial period, in turn driving higher-quality customer service.
Jaime
Scott, CEO and co-founder of EvaluAgent, commented: “It’s very clear from the
research that employee engagement takes a severe hit throughout January.
“This
can have a really damaging impact on employee performance and explains the low
levels of customer satisfaction reported by both businesses and their
customers.
“With
so many customers now having come to expect poor customer service levels in
January, there is a huge opportunity for businesses to break the mold and
properly motivate teams, improving customer service and gaining an advantage
over their competitors.”
It’s clear that technology is evolving across every business, allowing companies to become more productive and efficient. Computer systems, such…
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It’s clear that technology is evolving across every
business, allowing companies to become more productive and efficient.
Computer systems, such as CRMs and warehouse management
systems, can help you plan out your workload as efficiently as possible to
increase productivity of staff, while analytics allow you to judge what updates
are needed and when.
Bodysuits
It was announced in 2017 that line workers in the plant
would pilot exoskeleton suits — wearable technology that can help support a
worker’s arms while they undergo tasks above their heads. Ford’s Michigan plant
is also using innovative technological developments to help its workforce.
These suits can also be adjusted to support different weights, depending on the
wearer’s needs.
While such suits were more likely to appear on the big
screen in movies such as Iron Man
just a few years ago, the creation is having positive feedback from its users
in the real life world.
Printing techniques
In any manufacturing company, human error can be extremely
costly. That’s where 3D printing can come into play. While it’s still early
days for the technology, digital
printing has the potential to have a massive impact on practicality. It’s
expected that this invention will transform nearly every industry as it changes
how manufacturers will do business and will impact material costs, the
traditional assembly line and product pricing strategies.
They are particularly handy as automated printers, like
those used by Voodoo Manufacturing, don’t need to be manned anymore and can
continue working 24 hours a day. The use of robotics isn’t aimed at replacing
humans, but more so making employees’ jobs easier.
Drones
Drones can impact a company massively, saving almost 12
hours on each inspection and reducing the time it takes to check the equipment
from 12 hours to 12 minutes. Not only can drones provide a quick and thorough
inspection, but they eliminate the health and safety risk of someone needing to
scale up to 150 feet to look at gantries. They have started to use drones to
help perform risky inspections on the factory’s equipment in it’s Dagenham
engine plant. The company is benefitting massively,
Another advantage of drones is that they are particularly
good at providing the company with video and still footage that can be stored
to allow the plant to compare its findings over a period of time to monitor any
changes or patterns that are noticeable. This has become an indispensable tool
for the factory, with the drones greatly improving productivity and efficiency.
What does the future have in store?
The process of quality control can’t be too reliable, as
faulty parts may well be produced in a batch and slip through after the checks.
That’s why the ever-improving embedded metrology will continue to help
manufacturers produce a better product. This quick and convenient solution is a
lot more accurate and requires little human interference.
This process can traditionally be a very time-consuming and
expensive project. There would be randomly selected machine-made parts that
would be individually tested, and if they passed the test, the batch it came
from would be validated.
To summarise, it’s anticipated that this human aspect can be
removed completely, with technology helping to provide a fully integrated and
fully automated form of quality control. While some of the public are concerned
that jobs will be lost as it keeps progressing, it can only be a good thing for
manufacturing companies as it continues to help improve productivity and
efficiency. It will be interesting to see what we welcome to factories next!
Technology is continuing to amaze us in all walks of life.
The automotive industry is no different, either, taking
advantage of new inventions. It’s not only our cars that are benefitting from
technological advances, though — the manufacturing industry is, too. Lookers, who
offer a variety of cars such as the used Ford C Max, are
an example of this too!
New research suggests the UK is at risk of widespread ‘digital amnesia’, as it revealed 23 per cent of UK…
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New research suggests the UK
is at risk of widespread ‘digital amnesia’, as it revealed 23 per cent of UK
employees don’t know their own mobile phone number.
The research1 by
CRM specialist Capsule found more than two thirds (69 per cent) of workers
don’t know their partner’s number off by heart, whilst 63 per cent don’t know
their best friend’s birthday, and 73 per cent don’t know their booked holiday
dates without using tech to check.
Dependence on modern
technology to carry out everyday tasks in employees’ personal lives was further
highlighted in the survey, with two thirds (64 per cent) saying they rely on
tech for directions, 45 per cent for shopping, 39 per cent to access transport,
and 38 per cent for times and dates of events.
“In an increasingly digital
age, many people are using technology to store and access information instead
of memorising it,” said Duncan Stockdill, Capsule CEO.
“Those surveyed admitted that
they reach for their devices to carry out simple, basic tasks, such as maths
calculations and spelling.
“As technology has become
more connected, accessible and easy-to-use, we have become progressively more
reliant on it to help organise our lives and remember for us – giving rise to
‘digital amnesia’. Essentially, we are storing more information and
memories in the ‘cloud’, not our brains.
“With this in mind, it’s essential to trust the software you use and
ensure it keeps your data secure like enabling two step login and using strong,
unique passwords. We know passwords are easily forgotten though – around eight
per cent of our users reset their password each month. Tools like 1password are
useful as they’ll remember them all for you.”
According to the survey,
almost one in three (31 per cent) workers describe themselves as disorganised –
and 29 per cent said this has negatively impacted their performance at work,
such as missing deadlines and arriving late to meetings.
One in four (24 per cent)
have been late for appointments in the past 12 months, 23 per cent have missed
birthdays, 21 per cent have forgotten to pay bills, and 15 per cent double
booked or missed social events, respectively.
The link between technology
and being organised was clear from the research, with two-thirds (64 per cent)
of all respondents saying they use technology, such as online calendars,
digital to-do lists and reminders, to keep their lives in order.
Stockdill added: “There has
been a significant shift in how we function and operate, and the gulf between
the past and the future is set to become more pronounced as technology becomes
even more advanced.
“Reliance on tech is showing
no signs of slowing down and the business world needs to adapt to these changes
in order to stay ahead of the curve and help their employees reach their full
potential.
“Companies should consider
taking steps to ensure that their employees have the tools they need to support
well-organised and effective working practices.”
Capsule is a cloud-based Customer Relationship
Management (CRM) software platform. The system helps businesses stay
organised, in control of their sales process and build strong customer
relationships through its simple but powerful integrated solution.
1Research conducted among
2,000 permanently employed respondents
By Luca Ravazzolo, Product Manager, InterSystems The last year has seen a gradual evolution of DevOps as the approach has…
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By Luca Ravazzolo,
Product Manager, InterSystems
The last year has seen a gradual evolution of DevOps as the
approach has matured and continued to be adopted more widely. Since its
introduction, DevOps has changed mindsets, encouraging organisations to be more
agile and making concepts like continuous integration and continuous delivery more commonplace. A major
reason for the popularity of DevOps is that it allows organisations to capture
all processes in an auditable and replicable way. Further to this, it adapts
quickly, resulting in a low cost of change, and allows businesses to add cross-functionality
collaborations and results in working at a much higher speed.
Thanks to a similar
evolution in the cloud world, more intelligent tools are becoming available,
allowing developers to follow up DevOps processes with more discipline and
efficiency. This has led to the next iteration of DevOps: DevSecOps.
What is DevSecOps?
The issue of security is
one aspect of DevOps that, until recently, has been largely overlooked, often
due to the underlying pressure for the rapid creation of solutions and for
these to be deployed quickly. Consequently, this has meant that security hasn’t
always been a priority as including this at development stage hinders speed. Instead,
security tended to be retrofitted after a build – an approach that makes the
process more difficult. As developers and organisations have begun to realise
that this isn’t the most security-conscious or optimal way of going about it,
we are now seeing some integrate security into DevOps from the outset. This
approach means developers can alleviate any security issues at the time of
development.
Implementing DevSecOps
Currently, DevOps breaks
down any barriers between developers and operations teams, but adding security
into the picture requires there to be greater collaboration and
knowledge-sharing across the organisation. For DevSecOps to be successful,
developers and organisations must embrace a collaborative culture and recognise
that they require input from other individuals within the business with
different expertise. This requires organisations to adopt the right mindset in
which they realise the transformative power of security in the development of
solutions and collaborate with other departments. Traditionally, developers have
been focused purely on logic and algorithms, for example, and security is an
afterthought. So, if they are to embrace a DevSecOps approach, it is crucial to
involve security experts from the beginning and for the different parties to
collaborate on the development of solutions. By doing so it will be possible
for enterprises to create secure, stable and resilient solutions which will be
hugely beneficial for both the organisation and end-users.
Further to this, DevSecOps requires
continual security reviews covering everything from compliance monitoring for
PCI and GDPR to determining what the process is if security senses a threat.
Therefore, organisations should establish a review process from the moment they
think about architecting a new solution. Then they should also determine
processes for the ongoing monitoring and management of security as the code
progresses through every stage, from the developer desk to the building of the
solution and the testing of it. It’s also critical that developers receive
adequate training to ensure they are aware of security throughout the
development journey.
What’s next for DevOps?
While what the future may
hold for DevOps isn’t clear at this time, there are two prominent schools of
thought:
Firstly, it is thought
there could one day be NoOps. This is the idea that solutions will feature everything
they are required to from the outset, such as code standards, security,
libraries and legislation protocols, and that things will be completely automated,
therefore requiring people to just monitor and raise questions as they verify
the software. Technically, as everything would be automated within the software
provisioning pipeline, there would be no need for manual, human-based operations.
This could potentially guarantee a higher level of security and resilience as
everything would meet a particular standard.
The second prediction is
that instead of DevOps disappearing altogether, different types of Ops may be
developed. This could lead to the emergence of MLOps to form a machine
learning-driven operation that would be able to certify the standards that
organisations want software to be written with and even flag issues with it.
As demonstrated by the
introduction of DevSecOps, the evolution of DevOps is underway. In time, this
is likely to mean that DevOps will begin to encompass new technologies and multiple
aspects of building a new solution. Eventually, this will lead to all of the
requirements of development being brought together and an increase in
collaboration across departments. Ultimately, the end result will be new
solutions that meet the required standards and security from the outset.
Withers tech, working with experienced VC legal teams in France, Germany and Switzerland, has carried out the first analysis of…
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Withers tech, working with experienced VC legal teams in France, Germany and Switzerland, has carried out the first analysis of how venture capital deals are structured across Europe. The survey has identified that with more similarities than differences in deal structures between the jurisdictions, investors should have confidence about embarking on cross-border transactions.
Withers tech worked with Schnittker Möllmann Partners (SMP) in Germany, Viguié Schmidt & Associés in France and Wenger & Vieli in Switzerland to analyse active Series A deal terms used in each jurisdiction. The research identified 53 separate terms, which can be condensed into 14 key deal terms covering the categories of economic, control, and reps, warranties and remedies.
These three categories centre around future financing; exits and IPO to control terms like founders’ vesting, founders’ non-compete/solicitation; veto-rights; and control over the group of shareholders across the four jurisdictions. Any differences in these areas can often be accounted for by the different systems of Civil (France, Germany and Switzerland) and Common law jurisdictions (UK), which still remain key considerations.
James Shaw, head of Withers tech, comments: “The most significant message this survey sends is that we all speak largely the same language when it comes to transactions and legal documentation, so investors should have confidence in deploying capital across borders, particularly in these tech-savvy jurisdictions.”
“Of course, care and expert advice is still required though, as the difference between Common and Civil law approaches to deals can cause issues. In particular, governance structures in the UK are likely to differ from other European practices, including the structure and authority of different functions on company’s boards.”
“We decided to undertake this review due to the growing volume of cross-border tech VC deals within Europe. In addition, given the large volume of overseas capital looking to invest in European tech start-ups, we also felt it would be useful to explain the nuances of these four key jurisdictions to help overseas investors better understand the risks in each jurisdiction. Our next aim is to expand this review into other tech-active European jurisdictions.”
A copy of the report, including discussion of the 14 key deal terms found across all four jurisdictions, can be found here and all 53 deal terms are set out here.
By Alistair Laycock, Custom Solutions Director at Haulmont ‘Digital transformation’ has an obvious appeal. Invest in a technological solution that…
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By Alistair Laycock, Custom Solutions Director at Haulmont
‘Digital transformation’ has an obvious appeal. Invest in a technological solution that has the potential to streamline your business’s operations, reduce costs, and ultimately widen profit margins. What’s more, when your competitors are undergoing such a transformation, the pressure to invest in a solution to avoid being left behind is significant.
However, more so than the technology, and even the choice of technology partner, the main priority for business leaders looking to undergo a successful digital transformation can be found internally. In a word, it’s culture.
Many continue to invest in one-off, off the shelf solutions without putting technology at the heart of their business; a company whose board is open to consider and push technological change will be the one that separates itself from the pack.
People, partners and pilots
While throwing caution to the wind is the right approach, you needn’t strip out your legacy systems overnight. Before the implementation of new technology comes selecting the technology partner to deliver on the vision, and the right choice is paramount to achieving a successful digital transformation.
When choosing a tech vendor to deliver a digital transformation project, ensure that your business’s cultures are aligned. Their ambition, communication style, attention to detail and proactivity are all key indicators, and it’s paramount that you ensure that your team can work smoothly with theirs. In the worst-case scenarios, miscommunication on deliverables and expectations leads to an increase in costs and a poor end product, undermining your original objectives.
Do also plan for the future. The right technology partner will offer more than one solution, with alternatives proactively proposed in the long term. Propose that you begin by investing in a small project first. A pilot project – that is still bespoke and easier to develop – allows your potential technology partner to prove they understand your objectives and can quickly develop an appropriate solution. Critically, it also allows you to test the profitability of the solution and whether its success can be replicated at a greater scale.
A successful pilot project provides the basis to scale operations, including the replacement of legacy systems, safer in the knowledge that the new solutions will pay dividends. The final step is to work with your partner to carefully and methodically plan the implementation of these new systems.
Becoming a technology-first company
Once you’re settled with your partner, it’s paramount that you maintain the same risk tolerance that led you to this position; technology is a continuous solution, not a one-off investment. With new technologies come potential new customers – each with their own needs – and various new data points from which you can derive greater insight. To fully take advantage of this, be sure to invest in your staff. Look to retrain existing staff or employ a network of universally tech-skilled staff who are able to work in tandem with your technology partner, assess your own internal technology, and make suggestions on what other technological improvements would best serve the business moving forward.
When it comes to recruitment, don’t be afraid to invest in youth. A recent report* suggests that 73% of B2B tech buying committee members are millennials, while under-35s make up 40% of those making the final decisions on technology purchases.
Analysing the data is key in ensuring continuous success; it’ll tell you what to automate, what to cull, and where there’s scope for growth. Getting this right will ensure reduced costs and increased growth and revenue.
Tangible impact
At Haulmont, we’ve worked with various partners to assist in a range of digital transformation projects. The Keyholding Company, providers of keyholding and alarm response services, is a prime example of embracing change and thriving as a result. Answer times have reduced drastically, their entire service has been streamlined, and in the last year alone costs of sales are down 10%, while business growth is up by 15%.
The company has evolved from its specialism in security and is now a technology company first, with 98% of its 500,000 jobs each year handled by automation; previously, a human used to touch every job. As a partner, we’ve become an extension of the business, but it’s something that wouldn’t have been possible without the forward-thinking and risk tolerant approach adopted at the outset.
The right technology is important. The right technology partner is important. But the success of a project is at risk if the teams delivering on objectives are not on the same page. A willingness to embrace change must trickle down from the top if a digital transformation is to be truly transformative.
Retailers know how important the customer experience is – and this can’t be forgotten around the busiest shopping period of…
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Retailers know how important the customer experience is – and
this can’t be forgotten around the busiest shopping period of the year. In
fact, in 2018 UK shoppers spent £4.75billion in Boxing Day sales and £1.4
billion on the last Saturday before Christmas, known as ‘Super Saturday.’ With research showing
that improving the customer experience and investing in new ways to engage
customers is critical to the ongoing success of retailers, the retailers who
are able to create a seamless, convenient experience for customers will have
the upper hand. To do this effectively, they’ll need to bring together physical
and digital while offering an amazing product selection that’s readily
available and can be delivered fast.
Philip
Hall, Managing Director Europe at CommerceHub, shares his top three tips to give
retailers an advantage during this year’s peak shopping season.
1.
Embrace the Physical and Digital for More Consumer Convenience
With the
adoption of cloud-based software and smart mobile devices, retailers’ ability
to connect their physical and digital presence has become significantly easier,
as shown by the rise of click and collect and more return options. Every
consumer has a different purchasing pattern – which is largely driven by
convenience – meaning that retailers need to focus on having the right products
in the right places.
Because
convenience plays a large role in customer satisfaction, retailers need to take
action. According to a recent survey, 68% of consumers said they preferred
click and collect when making purchases. When consumers elect to pick up their
purchases in-store, retailers are not only able to reduce their shipping costs,
but also to sell even more product, as 85% of these consumers tend to make
additional purchases once they come in-store to retrieve their orders –
something that could easily feed into holiday sale buzz.
2. Put
an End to Cancelled and Out of Stock Messages
“Right time,
right place” in today’s consumer speak actually means “right here, right now,”
– something that is only becoming more ingrained in retailers’ strategies. It’s
not uncommon for consumers to have experienced the frustration of hopping
online to purchase the perfect gift and getting hit with the “out of stock”
message – a challenge that typically ends in an abandoned cart and searching
for the product elsewhere.
Retailers stand
to miss out on nearly $1 trillion in sales because they
don’t have what customers want to buy. And while this problem stirs agitation
and causes stress for consumers, it is something that retailers can easily
avoid with the right approach. By tapping into virtual inventory enabled
through drop shipping and executing on proper resource planning and logistics
execution, retailers could potentially have no sell outs at all, enabling them
to keep customers happy and maintain their brand promise. And some retailers
are already recognising the potential, with research from CommerceHub showing that
46% of retailers value the fast shipping and delivery of drop shipping and over
a third acknowledging the better customer experience drop shipping will bring.
3. Meet
and Exceed Delivery Expectations
A final key to
success as we enter the UK’s busiest shopping period will be perfecting
shipping and delivery. Gone are the days when getting packages a week or longer
after an order is placed is acceptable. New and improving technology is giving
retailers the ability to strategically expand product ranges, fulfil
orders faster than ever before and track deliveries to better meet customer
needs and expectations. By implementing these advanced back-end processes,
communications between retailers and fulfilment/shipping centres have never
been more seamless.
Technology is
also giving retailers more visibility into fulfilment processes, which is
enabling them to create routine efficiencies and capture data to drive their
businesses forward year after year. What’s more, these insights can help drive
real-time decision making, allowing retailers to keep consumers aware of the
status of their orders and stay ahead of delays in ways that couldn’t be
managed before, which supports retailers’ growing need to stay ahead of customer
expectations.
Conclusion
Retailers need
to ensure that the customer, and their satisfaction, is at the core of every
strategy – especially in the coming months when the sales potential is so high.
Whether it is a newly implemented or enhanced approach, a retailer’s ability to
carry out a seamless crossover between physical and digital retail, minimise
out-of-stock cancels and meet and exceed delivery expectations is essential to
their success. And with this success comes happy customers, who in turn, will
only be coming back for more.
By Joonas Jantunen, CEO Cloudia Middle East & Africa, Cloudia. Former Hewlett-Packard CEO, Lew Platt, once famously said: “If HP knew…
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By Joonas Jantunen, CEO Cloudia Middle East & Africa, Cloudia.
Former Hewlett-Packard CEO, Lew Platt, once famously said: “If HP knew what HP knows, we’d be three times more productive.”
Managing
knowledge, or knowing what you know, and being able to apply it to core
decision-making is key to business success now and in the future. In
procurement, knowledge management already has the potential to drive
productivity gains across the business. And emerging technologies like AI and
RPA look set to play an outsized role.
What do we mean by knowledge management?
Every day, every
moment, organisations and their operating environments are creating, using and
sharing, huge amounts of information, or knowledge. Knowledge management, most
simply put, refers to the process of collecting, maintaining and managing
everything that a company ‘knows,’ in all
its forms. But knowledge management is also about using that knowledge to help
leaders make more informed decisions. In this article, we are considering
knowledge management in this wider sense.
In any
organisation, knowledge is power but only when it is well managed and usefully
applied. In procurement, knowledge becomes power when it’s effectively managed for the
purpose of driving decision-making. That means, identifying what information is
critical to operations, analysing it, then sharing the findings with key
decision-makers across the company.
What does this mean in practice for procurement?
In procurement
today, knowledge management typically begins with process automation, aimed at
reducing routine administrative work and freeing up procurement people to focus
on innovation and productivity. Automation also equips organisations with the
capacity to adapt and take advantage of new technologies as they develop.
The vast
majority of data management applications currently available focus on storing
and presenting historical data – telling us ‘what
happened’. Naturally,
it’s important to know
about past events to aid future management strategy, but all too often the data
analysis and interpretation itself is left entirely to humans, with our limited
capacity for processing large amounts of information. Also, it’s not possible to effectively exploit
even the most basic historical data in practice unless the organisation’s
procurement systems and processes have been digitised, and an adequate amount
of historical data accumulated.
Emerging technologies assist knowledge management in
multiple ways
When artificial
intelligence (AI) is mentioned, often the first thing that comes to mind is
robots making decisions on our behalf or undertaking roles previously performed
by humans. Indeed, it has been predicted that robots are likely to replace many
service-sector jobs, among other things. However, it’s worth remembering that predictions are based
on assumptions of what might happen in terms of
advances in AI and it’s
challenging to predict the pace at which these advances would take place.
In the short
term, the situation looks less exciting. At the moment, the most significant
strength of AI is its ability to handle huge amounts of data from various
sources and to establish links among different factors. Another remarkable
aspect of AI is the speed at which it is able to identify and produce text,
sound and image. As it stands, AI is best suited for optimising existing
processes and behavioural models on which an organisation already has plenty of
high-quality data.
AI helps manage, cultivate and discover procurement
knowledge
AI and its
various applications, especially robotic process automation (RPA), can
significantly speed up data collection and assembly. In addition to the
information that’s
entered into the system and generated during the daily procurement activities,
RPA is also able to cultivate new information. Useful information can be
gathered about various relevant factors, such as the market, operating
environments, pricing, currency fluctuations, any changes to contracts or
suppliers, as well as other operators or events within the same business
sector.
With the help of
automation, the data can be assembled, categorised according to context, and merged and stored
without human interference. As a result,
the process of data discovery will be significantly quicker and more
straightforward. Technology can also be harnessed to keep different levels of
management up-to-date with the latest information regarding, for example,
various organisational
units, or changes to contracts or consignments. As a result, management will
always have access to real-time knowledge of any breaches of contract or
disruptions in the supply chain.
The next level
of knowledge management is reached when technology is exploited to help
understand the causes of events and certain behaviours. Diagnostic analytics
examines data or content to answer the question ‘Why did this happen?’. When there is a better understanding of what
happened, information can be used to find and detect a variety of recurring
formulas and patterns, which help control and redirect operations more
accurately.
For example, if
the same suppliers always succeed or fail to fulfil the terms and conditions of
specific product categories, the valuable information provided by diagnostic
analytics can help target investment toward the most reliable suppliers.
Similarly, understanding the changes in supply and demand, under certain
conditions in different product categories, will help schedule the procurement
process more efficiently. Diverse procurement procedures and market
fluctuations have an impact on the price level of bids, but by analysing trends
and past events, it is possible to get both the procedure and the timing right.
Predictive analytics explains what’s going to
happen
Any organisation wishing to succeed needs to
have foresight. Predictive analytics is a level up from analysing the past, as
the focus is on developing and automating forecasts and probabilities based on
current events. Those in charge of procurement can use the knowledge to predict
and prepare for various outcomes and direct their actions accordingly.
Once the
analytics has discovered why something happened, it will be able to draw
conclusions and predictions about what is going to happen next. As an example,
it’s possible to
predict that when certain changes occur on the market, certain suppliers will
perform better (or worse) in relation to certain contractual terms, or if the
price or availability of a certain product category is projected to reduce.
Prescriptive analytics explains what should be
happening
A high level of
procurement knowledge management is achieved when technology can be employed to
tell what should be done next. AI and its various applications can efficiently
simulate human behaviour and learn to make draft measures and proposals based
on predictions. Even the decision-making process can be fully automated with
the help of various approval stages.
Based on facts
and probability-weighted projections, the system can give recommendations to
management about different areas of procurement. For example, it might be
advised to avoid certain suppliers at certain times of the year due to
projected shortages in supply, or to order extra goods in advance to prevent
stock from being exhausted.
Choose an experienced and competent partner
AI is a very
useful tool for optimising performance and streamlining processes where the
cost of human error can be high. In order to make the best use of technology in
procurement knowledge management, it’s essential to be able to identify and collect the type of data that
matters most to your organisation. Since the projections and recommendations are based on existing
data, the sooner the process of data collection and storage in your organisation commences, the better.
John Rossman, managing partner at Rosman Partners, explores the concept of digital transformation and his book Think Like Amazon. With…
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John Rossman, managing partner at Rosman Partners, explores the concept of digital transformation and his book Think Like Amazon. With companies constantly referring to the Amazon effect, John calls upon his time working with Amazon to lay out 50 and a half ideas that businesses and organizations should consider as they look to transform their operations, embrace innovation, and enter the next era of business. By Dale Benton
Talk us through your career and your work with Amazon
In the 2000s, I had the opportunity to be a leader at Amazon. I got to launch the Marketplace business at Amazon so that’s third-party selling at Amazon.com. Today that’s 58% of all units shipped and sold are through that platform. And then I also ran the enterprise business where we ran other large retailers’ e-commerce infrastructure for them. That included target.com, ToysRUs, Marks & Spencer in the UK, and a number of other great brands. I left Amazon in late 2005 and got into consulting, where I started to see the impact of all the strategies and tools and approaches we took at Amazon to get the types of results we did. I started to use those with my clients. Several years after I left, one of my clients at the Bill and Melinda Gates Foundation came to me and said, “John, I’ve seen how you put the little anecdotes and manoeuvres from Amazon into our business. It’s very impactful. I think you ought to write a book about it.” That’s what really started me down the path of writing the books. So, today I do a number of keynote speaking and advisory work where I work with leadership teams over a long period of time as an advisor to their team, and help others figure out their digital strategy. That’s been my career arc.
We hear about the Amazon effect, but you’ve been on the inside of that, can you give us your perspective?
I mean I was there from early 2002 through to late 2005. It was a fascinating period at Amazon because that’s really when we started to develop the strategy of Amazon really being two types of businesses. One is a retailer, and the other is a platform company, and a platform company builds core capabilities that both Amazon and the retailer could use as well as third parties. So, we started to get super clear and work through our leadership principles, our approaches for how to operate as a platform company. It completely changed the way that I think about problem solving and about situations, and opportunities. I didn’t develop all of these techniques. I just paid attention in class, and it was really then through my repeated practice of inserting them into my client’s business at the appropriate point with the appropriate approach that really inspired me to write, Think Like Amazon, 50 and A Half Ideas To Become A Digital Leader. That was really my inspiration for the book; to pass on to others what all the little moves are that you can take from Amazon and put them into your business to help make change happen.
What does it mean to digitally transform? You’ve described it in your book as an introduction to mission impossible
I think part of the essence of being digital or digital transformation, is there are lots of good definitions. There’s no one right one. I believe that being digital is really the combination of two, what sounded like athletic attributes, but they’re really organisational attributes, which are speed and agility. So, if you think of what speed is, speed is about being able to do a repetitive motion extremely efficiently and extremely predictably. That’s really operational excellence, right? So on the one hand, being digital is about operational excellence in the relentless pursuit for driving out inefficiencies in the business, and for perfecting the customer experience. The other attribute of a digital organisation is agility, and agility is really the ability to both sense and make change happen, right? And that’s both small change and big change. So really, that’s the ability for an organisation to innovate within itself, right? So, it’s really that combination of speed and agility, operational excellence and systematic innovation that really makes a digital company. A lot of what I work with teams on, and speak to audiences about relates to being deliberate, right? In both your operational excellence and your innovation. Every leader would say that being innovative is critical to the success of their company going forward, but 95% actually don’t have a systematic approach for how that happens. It happens on an accidental or one-by-one basis. So much of the framing of this book and the ideas from Amazon are how to be planful and systematic in both your operational excellence and your innovation.
Is there a challenge of balancing the need to perform while transforming?
This isn’t about pausing what you’re doing now, but it really does set the basis. In fact, the first idea in the book is reset your clocks. Your journeys will not be a short or straight line. If I think about what’s the understated secret of Amazon’s success? Right? It’s a 25-year-old company now. There were the first 15 years of; it was struggling to survive and to make a name and a brand. It’s really just the past 10 years that this vortex of an organisation has come into being. So patience is, I think, an underlying and underappreciated skill set of leadership and management and boards. Amazon has forestalled and pushed out profitability in order to build the infrastructure, and to do these experiments, and to build their business, they’ve pushed out profitability. I think it is that addiction to quarterly profit results that creates the challenges in both being able to reinvent your business and deliver those quarterly results. Sometimes part of the journey is about reshaping how you’re taking profits and investing it into the business. You do have to invest in the business if you truly want to transform, and it’s not a predictable path, and it is certainly a long path. So, it’s almost irreconcilable to say, “I want to have fast transformation results,” right? Those things are almost irreconcilable. It’s oxymoronic in nature.
Is there still inherent risk averseness towards technology?
I think it’s actually because the technology is becoming simpler and easier to operate. Because the obvious need to innovate is becoming higher and everything, what’s being pushed to the forefront is a company’s capability of managing change. This gets to a big essence of the book, and in particular idea nine is called making the elephant dance: portfolio strategy and governance for innovation. It gets back to that observation which is most companies don’t have a deliberate systematic approach for innovation. This idea is just about one aspect of that systematic approach for innovation, which is about a portfolio strategy. A portfolio strategy just helps to understand and outline where are your investments going, and what type of risk versus return are you expecting across those. What most companies are good at is low risk, low reward types of projects and investments, right? Basically, if we execute well, we should have a return, but these are things that are not game changing types of endeavours. What most companies are not good at is the high risk, high reward types of investments, and this is really where you need to think big but bet small. You need to make these types of high risk, high reward investments as nimble and small and hypothesis-driven as possible. But just simply having a portfolio understanding of your investments is one key element for really understanding how am I making deliberate change in the organisation. And as your question tees up, technology is rarely the key challenge. The key challenge is in how we envision the future, how we run change initiatives in our organization, not just the technology component but the business model component, and the organizational change components to it, and the ecosystem and stakeholder management component to that. And those tend to be the things that get in the way of innovation.
With transformation comes a rebuilding of existing cultures and mindsets, what challenges does this present?
Idea number three is called move forward to get back to day one: change the culture of status quo. It really is about the essential awakening that leaders need, which is: are we playing offense? Are we about creating the future or are we about defence, and maintaining the status quo? Bezos frames this up by his quick little saying around we are a day one company. In one of his recent shareholder letters, he talks about what’s it mean to be a day one company versus a day two company? If you are a day two company, meaning you’re probably healthy, you’ve been around for a while, but you’re struggling with innovation and reinventing yourself, and you see some competitive threats coming from non-traditional competitors. He gives some advice relative to creating a day one culture, and some of that advice is about don’t manage through proxy. Proxy is those abstraction mechanisms that we put in place to help manage the business. Things like surveys and abstracted metrics. The key way to get away from that is understand the exact customer experience, have transactional metrics, and set a high bar relative to the perfect order, the perfect customer experience versus looking at it in an aggregate, and really about making sure that you’re dedicating time to work in the future. As a leadership team, we probably need to be more deliberate about working in the future. It’s amazing because people are not systematic about it. People and leaders hesitate to put time into actually working in the future. So, many of the ideas are about, ‘Whoa, what are the things I do to actually work in the future?’
What advice would you give to a company embarking on a digital transformation?
At the end of the day, it’s really about not the organisation transforming around me, but it’s about, well, what am I personally willing to do differently? What am I willing to learn? How am I willing to take on new practices, spend my time differently, prioritise my business results and my schedule, and my hiring practices too? What are you willing to do differently? What changes are you willing to take out of this and make happen as part of your personal habits?
Becki Hyde, Practice Lead, Agile Practice Leadership Enablement and Sean Olszewski, Practice Lead for Agile Practice Leadership Enablement, Pivotal Software…
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Becki Hyde, Practice Lead, Agile Practice Leadership Enablement and Sean Olszewski, Practice Lead for Agile Practice Leadership Enablement, Pivotal Software
The benefits of a successful digital transformation project will manifest across entire organisational structures: teams make and act upon decisions faster than they have in the past, products and services are being delivered to users faster, employee morale is on the rise, operational costs are decreasing, and legacy systems are being upgraded or retired far quicker than many in the business can keep pace with. However, once change gets into full swing, it’s typical to see some employees begin to question their roles in the company, or whether they want to remain at the company at all. Things are changing fast—technologies, processes, expectations—and that can make for a difficult adjustment. Understanding why employees feel the way they do is crucial–not just to keep great people, but as a gauge to understand if the business is transforming in the right way.
There are different types of people within an organisation that are at risk of becoming alienated or otherwise unhappy during transformation periods. Here are some traits to look out for and some advice for keeping those people not just around, but also happy.
Frustrated converts
The frustrated convert gets exposure to a new way of working and is then forced to go back to the old way – to what is often perceived as cumbersome process, wasted time, dead ends, and a lack of autonomy. These blockers often occur due to senior leadership being bought into an effort but failing to cascade the intent and importance of this to middle management. Because of this breakdown in communication, middle management doesn’t allow individual contributors the flexibility they need to deliver effectively, creating frustration and ultimately causing them to leave.
To prevent turnover of otherwise engaged and excited employees, work toward support for the change at all levels of your organisation and provide air cover until that is achieved. Having one or two key allies at the manager, director, and vice president levels goes a long way toward preventing converts from ever becoming frustrated. By knowing they have direct leadership support, employees will be able to weather the challenges of introducing change for much longer than if they feel they are doing it alone.
High achievers
High achievers are employees who thrive in an agile environment, becoming so effective at what they do that they begin to be courted by other companies, or seek promotion opportunities elsewhere. Time and time again, we see this issue come up as companies undergo change, and the strongest way to combat it is to have a strong, protected culture of learning, with a fair and competitive compensation structure.
But supporting high achievers isn’t just about salary and benefits. The most engaged and motivated participants in change can become disengaged if they aren’t given opportunities that align to their interests and professional development – and have a measurable impact on the business. After seeing success on their teams, some employees naturally want to spread the principles and practices they’ve become so passionate about. This gives them an opportunity to grow professionally, and to have a larger positive influence on company culture.
Opt-outs
When people are asked to change the way they work, some will self-select out. This is especially likely in companies where employees stay in roles long-term and develop well-understood processes over years of experience. Opt-outs don’t like or aren’t convinced of how effective this new way of working will be. It’s not uncommon for people to have seen many attempts at changing their enterprise and are therefore sceptical of further change.
As you introduce change, think ahead to how you can support these potential opt-outs. Opt-outs are normally better suited for work which isn’t related to the company’s digital transformation efforts, therefore change may in fact represent an opportunity to become involved in other areas of the business. They can however prove to be effective advisors in their area of expertise, or perhaps there are other teams in the company that could benefit from their experience and knowledge. Regardless, if you don’t consider these employees’ concerns and manage their transitions, they can poison others who are interested – but nervous about the change.
Graduates
Some of your best team members will get promoted, perhaps onto a different team or into a new business unit. On the surface this is good news, however, if people leave early, or several leave in quick succession, the team leading the change may struggle to maintain maturity and momentum in their absence.
Because it is important to keep teams intact until there are people ready to backfill leadership roles, start succession-planning early — even down to the individual team level. While you can encourage people to stay in place for a period of time by providing them with interesting work and fair compensation, preparing for the future early ensures your efforts won’t stall out. When you are ready for people to move on, consider planning for graduates to seed new teams in pairs or small groups, so that they can support one another and have greater influence on others.
Final thoughts
While high turnover feels alarming, it can be a good sign. It’s evidence that you’re effecting change. Instead of feeling powerless, proactively preparing for and guiding changes in staffing can keep your transformation on track. While you may not prevent people from leaving, you can learn valuable lessons from the reasons they leave, which you can then leverage into actionable insights that help you on your journey.
Jay Weintraub, founder and CEO of InsureTech Connect explores the digital transformation of insurance, and what makes InsureTech Connect the…
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Jay Weintraub, founder and CEO of InsureTech Connect explores the digital transformation of insurance, and what makes InsureTech Connect the largest, most focused and relevant gathering of insurance industry executives, entrepreneurs and investors in the world. By Dale Benton
Walk us through your career journey and how you
find yourself as Founder and CEO of InsureTech Connect?
In 2008, I launched an event
series for a subset of the Internet advertising space, and it was there that I first
got exposed to the world of insurance. Towards the end of 2015, I met Caribou
Honig, who was a fintech VC in search of an InsureTech conference, and that
meeting could have gone really poorly or really well, and I’m happy to say that
it went really, really well.
What is InsureTech Connect?
We are the world’s largest
event that discusses the digital transformation happening in the world of
insurance. Insurance is one of these remarkable worlds. It’s worth trillions of
dollars in annual premiums, it connects our lives, it enables us to do everything
that we do at this moment and yet it’s something that is sort of invisible and
behind the scenes. In the last four years, the world of insurance has seen,
this groundswell of activity by entrepreneurs who are looking at this big world
and saying, ‘Wait a second, why does it work the way that it does? There has to
be a better way.” It is these entrepreneurs, the investors that fund them
and the global incumbent insurance companies that all gather at InsureTech
Connect in Las Vegas.
As technology has become more advanced, how are
the conversations surrounding tech, different today than they were say, 10
years ago?
It’s amazing how much the
conversation has remained the same, it’s the channels that are different. When
we think about customer acquisition, there are certainly going to be broad
shifts in how companies acquire customers as the access to channels. We must
remember, the core of having a great product that appeals to people may change,
but it’s the core of having something worth telling that really hasn’t changed.
Is there a challenge in understanding, and
defining, what digital and digital transformation means to business?
It’s both a challenge and
opportunity and it is what makes being in InsureTech such a fun place to be
because is it talking about product lines. How do we use insurance in a new
way? How do we take a classic product, break it into a way that is better and
necessary but also helps consumers? Digital transformation is going to depend
on what product line you’re in, what part of the value chain you’re in and what
technologies you think can actually help you serve your customers better.
There’s an immense amount of parallel transformation taking place.
What do you feel are some of the key barriers
faced by insurance, in embracing innovation?
I would love for the answer
to be technology. If we think about in the early 2000s when e-commerce was
becoming a thing and people knew that they wanted to buy online, it still took
15 years before it became mainstream, and that was a technology issue. It was
because mobile phones weren’t computers, there wasn’t connectivity, the cloud
computing didn’t exist, so the ubiquity of what could be done wasn’t actually
there. Today, we have consumers that want things and we have technology that
gets it to them. It’s a fundamental culture change in a lot of cases, and
insurance has been more incremental in nature. It’s an industry that is
hundreds of years old and thinks in terms of hundreds of years versus any
short-term trend.
How do companies stay on top of the new consumer
demands so as not to fall behind competitors?
We have a couple of
assumptions. We are assuming that over time, if it can be sold online, it will
be. We assume over time that everything will be sold and written directly. The
challenge for any business is, what is that time horizon? Personal lines are vastly
consumed both directly and digitally, but commercial lines will one day be far
more direct than they are. It’s why small commercial concerns are such a hotbed
of innovation.
You think about the next
generation of small business owner, it’s going to be somebody that has grown up
with a phone, and so when they look to purchase their insurance, they’re going
to want to start digitally versus maybe how the previous generation turned to
an individual. When we’re looking at insurance, it’s about locating the pain
point? Is the product going to be sold digitally no matter what? Or is it
something that is still going to be sold through an individual, most likely
with an advisor. How do you enable that advisor to do their job better?
How difficult is it to balance, move forward and
embrace this next generation without turning your back on the existing previous
generations?
I don’t think it’s a pure
split. I think everybody wants to speak on the phone at a certain time, and I
would say that there’s an ever-growing comfort with people who are happy to
speak on the phone or not speak on the phone. We look at Facebook, right? It
went from being students only, to almost getting a backlash for it becoming the
playground of the parents and grandparents, and it shows the comfort of people
engaging with a mobile phone as a device for consuming and inputting
information.
I think about chatbots and
other forms of conversational AI, and it’s a case of understanding how it helps
you to make the experience better versus looking at it as just a, ‘Oh the young
kids, they want to engage with their phone.’ We have to say, what does it help
us do better, faster, and at scale? We have to look at these things for very
specific performance enhancers and then always have an escalation process
knowing that if there’s a certain level of complexity, if there’s a certain
level of frustration, if there’s nuance, then there’s a trigger for people to
always speak to a human. People can be guilty of looking at tech as the box
that everything fits into. It’s like a hammer in search of a nail. Well let’s
make it a box for everything, and we see it ultimately leads to poor outcomes.
How do you work to ensure that InsureTech
Connect is relevant to the discussions of today in a time of never-ending disruption?
What is our role? Our role is
to convene. When we think about the goal of insurance, both to enable people to
live and take risks and to get people back to a pre-loss state faster, our hope
is to always keep an eye on what’s happening and look at how we reduce the
coverage gaps and say, what is actually making a difference? Who is actually
making a difference? How do we make sure they get enough time on stage? And
more importantly, how do we enable the attendees, via technology, to connect
with each other so that start-ups meet an investor they might not have?
What can organisations, and the industry as a
whole, be doing now to open the door to the next generation of skilled workers
that’ll be able to continue to innovate and continue to operate in these new
and exciting times?
It’s one of those great
questions that has horrible answers because the businesses operate at scale.
It’s about repeatable process and it’s about having the data and then acting.
What we’re talking about now is, no one knows the data. We wouldn’t have
guessed 5 years ago that having somebody who was really good with a mobile
phone and understood Instagram could be a person that is immensely valuable to
the largest organisations, and yet today, you think about some of these
competencies… People are saying, ‘Oh, we want you to know how to use social
because having our 10,000 employees engaged in social is actually one of the
best ways for us to get seen and get noticed.’ But a lot of these skill sets we
have are not obvious until they’re obvious.
The best thing is to look at
the younger generation and at how they engage. Study them as consumers first,
as this is how they consume and then look to understand what that means, every five
or 10 years. The hardest part is we can oftentimes see where the future’s
heading, but we don’t know how long it’s going to take. There’s a real
discipline that says, how do we separate out some of these new skill sets, new
future activities, how do we stay on top of it, without trying to either shift
the entire organisation or treat it as something that is not that important
today.
What would you say is key to remaining successful
in this time of opportunity and challenge?
Never underestimate the power
of relationships, because it’s the people who are ultimately the ones that are
creating the next thing and the closer you are to the creators, the closer you
are to the ecosystem itself. I think it is also being calm; you have to be calm
and stop listening to the noise as much. We think about the companies that have
dramatically changed our lives. I think about some of the big tech companies: Google,
Amazon, Facebook, Apple. There are thousands upon thousands of start-ups that
are doing interesting things, but the number of them that are going to
ultimately change the way we do business are slow in their growth, in a way,
before they fully change us.
Be a little patient and learn
about ecosystems and make sure that you have at least someone or a team that is
comfortable with these new platforms, so that when one of them becomes dominant
like Facebook or Apple there’s at least some embedded knowledge about how these
things work. Listen, but don’t overreact. Be patient. There’s usually always
time, even though it doesn’t feel like it in the get-go.
Ian Moyse, EMEA Sales Director at Natterbox Limited outlines one of the most important skill sets in the modern age:…
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Ian Moyse, EMEA Sales Director at Natterbox Limited outlines one of the most important skill sets in the modern age: the need for acceptance and receptiveness of innovation and digitisation. The ability to be agile as a technology professional… By Dale Benton
How important is it to stay on top of, and to understand, both the speed of change and the increasing demands on modern technology?
One of the skill sets, and not just in sales or working in the tech sector, but across a lot of roles today, is the capability to be agile. Humans have this propensity to change and adapt. Otherwise, we wouldn’t be here today, right? But you’ve got to be willing to do that. A valuable skill today is acceptance and receptiveness and the ability to change, and change again, and again. We’re seeing less and less of doing the same thing day in, day out, for 30 years or so.
So, what exactly is Natterbox?
Natterbox has built, from the ground up, a cloud telephony system, which was called VoIP. The real unique thing is we’ve built the system fully inside Salesforce. We’re the most integrated telephony platform for the Salesforce platforms, whether it is service cloud, sales cloud, force.com etc., on the planet. You could say it’s a niche market, but it’s a very big niche market, enabling customers who have invested in Salesforce to also put their telephony in the cloud, and put the two together. It’s using data that you have about customers, whether it’s opportunities, cases, support, tickets, to improve and transform both your customer and your agent’s experience with telephony. To do things that you couldn’t do with old technology, and old telephony systems. Simple example, if you phone in and you had a ticket with a customer yesterday and they didn’t call you back, how transformational would it be if when you phoned them, if the phone system dynamically recognised your number, had looked you up in their system and went, “Hi Ian, thanks for calling this morning. We detect, we didn’t call you back on that ticket yesterday, if that’s what you’re calling about, press one, and we will escalate you to the right person quickly. Two, for our normal menu.”
We’re using live relevant data about the customer to personalize and transform their experience over the phone. Exactly like you’ve seen on websites for years, where you go to a website, it remembers who you are from a cookie, and starts to personalize your experience and treat you differently. We believe you should be doing that on the phone, and that’s the capability we give to customers.
Can you explore the technology that sits at the very heart of that?
We’ve seen some players try and do this by buying components, underlying components in, but we wanted to own the stack because if you’re going to do this stuff, it’s obviously important to you.You can’t do this stuff and do half a job, it’s got to be extremely resilient, because you’re setting the customer expectation, you’re setting the bar high and you’d better deliver. We architected this ourselves, and we chose Salesforce purely because we wanted to be the master of one and do it well. We decided we are going to do this to the extreme we believe the market needs.
Everything behind this has to use efficient, speedy cloud systems, because it’s real time. You have a conversation, you have an electronic voice, you want it to sound as human as possible, and it needs to be instantaneous. The customer isn’t going to wait two or three seconds as you would on websites. Our expectations are set high. It is extremely complex under the covers, but one of our goals we achieved was to make it easier for customers, to hide all the complexity in the back end, and give them an interface where they can configure this, and manage it very quickly themselves. So if they want to make a change, it’s real time. Make the change and it’s live across your whole phone system.
Data is key to what you do, but how do you ensure that data is governed?
If you look at the press today, in the past number of weeks, at the point we’re speaking now, we have seen some of the impact of data breaches like we’ve never seen before. The consequence used to be, A, we wouldn’t always necessarily hear about the story and B, the impact and cost of that business was reduced; it didn’t get much news. It was, “there’s been a breach”. If you heard about it, great, but it has diminished quite quickly. Today we live in a different world. The rules have changed.
We’ve seen these large businesses now, they’re getting fines in the hundreds of millions. So the penalty should have been there before. I don’t think the threats are getting worse. They’re getting different, but the threats have been there for years. If you’ve got data, it is an incredibly valuable asset. When I speak at schools, it’s always interesting. A question that’s come up a few times is, “Facebook and these, how do they make money?” Because they see these platforms, that they recognize cost money to build and run. “How do they make money?” The money isn’t in the membership fees, it isn’t in the logins. It’s in the data they get, what they know about us, how they can market to us and sell us… We’re their commodity, we’re their product.
With technology continuously evolving, how can companies like Natterbox be ready for the next wave of digital transformation?
What I say to people is, what is your business? What is the product or service you sell? What’s the dynamic of your customer? Now if you’re a hairdresser cutting hair, you physically have to cut hair. So unless some incredible robot comes along in the future, that’s going to continue. It’s understanding what your business is, and what the persona of your customers are and how are they wanting to interact with you? It depends on generation as well. Millennials have been born into a world where social media has always been there, and all this tech we’re seeing, and Amazon, and apps on your phone for ordering is taken for granted. I would argue, however, all of us that haven’t come from that generation have probably been dragged into it anyway, and we take it for granted as well.
Our expectation bars have been set to a peaked level. The problem for any business that isn’t in that born in the cloud model, is that the customer expects the same of you, because someone else has raised the bar. And that’s why we’ve seen the likes of Blockbuster Video fall foul of Netflix and Amazon’s LoveFilm as was. There’s nothing wrong with Blockbuster, we’re hiring a video. But someone came along and presented a faster, quicker, slicker, more flexible model. It changed the dynamic of how the customer engaged or bought that product or service.
If you’re in a market that can be transformed, or you’ve got someone coming into it, you need to start now. You need to be the ones doing it, not waiting for someone else to transform you, and then you’re on the defensive. It’s harder for you as a legacy business to transform than it is for a newcomer. A new business will buy everything in the cloud. They’ll buy all the new technology, and apply processes that fit the new world that we’re now in, and the new buyer dynamic, and the new customer persona, and the new tech world we live in. Because they can.
If you’re in a business, forget what you do today. Go in a room with the people who understand the history of your business, or the dynamic of your market. Whiteboard, spend a couple of hours with some coffee and donuts, and just chat through. If we were starting this company again today, what would we do? Imagine that your company does not exist. You have all left and gone to a start-up. You’re going to start a competitor. What would you do? You would not build what you built historically.
The reason you did that is because it was the world you were in at the time you built it. So there’s nothing wrong with what you did. It’s the nature of the beast. But today, you would do it differently. And that’s how your mindset needs to start. Then you work backwards to, “Okay, so how do we get there? What, what’s the easy win? Is there anything of these 20 ideas we’ve come up with, where we can start to … This year we could do three of them?” That’ll be hard in itself. Right? But we can start to move along the journey of trying to move towards that. Because we’ve all agreed if we started the business today, that’s what we’d do to beat our own company. If you can think of it, someone else can as well, and someone else can do it, and they can potentially do it quite quickly.
By Alistair Sergeant, CEO, Purple Consultancy Businesses are increasingly having to create and modify their organisational capabilities to adapt and keep…
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ByAlistair Sergeant,CEO, Purple Consultancy
Businesses are increasingly having to create and modify their organisational capabilities to adapt and keep up with the ever changing and evolving digital technology which surrounds them.
For many, their digital projects are failing; the speed of digital transformation is alienating the essential human interaction and cultural change required to make the projects a success.
Bring back the humans
According to the latest statistics, 88% of digital transformation projects fail and there is a reason for that.
The speed of digital change is something that no business can ignore but most try relentlessly and largely unsuccessfully to keep up with. We are surrounded with disruptive business models coming to market with new technology rapidly changing and it is easy to get so wrapped up by technology that we forget to consider that without the human element, the transformation process will fail.
This rapid change has resulted in a serious skills gap from a business and technology prospective for most UK organisations. As a result, both large corporations and SMEs UK wide are not as agile as they should be, not only affecting growth, but also impacting customer experience and employee engagement.
We know that (most) cars, no matter how technologically advanced they are, need a human to drive them and this is just the same when implementing digital change in your business.
Meaningful change starts with people, not technology. Your team needs to adapt to keep up with the pace by making changes to the way they have worked in the past but none of this can work successfully unless we encourage a chance in culture.
The role of the leader
To implement an effective digital transformation strategy, leadership is not only vital but critical for success. In so many cases, those implementing the strategy haven’t taken the time to understand what needs to be changed, what the strategy should aim to deliver and when, and more importantly how to correctly communicate change with staff or other company stakeholders.
It’s time to remove the digital-first approach as this method requires your entire team to buy in to it and almost forces them into a corner. To work on a new team culture in the business, which encourages your staff to embrace the changes and understand the reason for the changes, takes time. As a digital leader you need to guide and support your employees, encourage them and give them time to grow with the transformation process.
Understanding how they work, how they think and playing to their strengths is time consuming but will ultimately help to grow your successful ‘human-first’ approach.
Get to know your customers
Customers are human too. They are not just numbers on a sheet. It is vital you get to know them, get to the bottom of what they like, what they want and also what they don’t want. You are aiming to promote a human-centric approach so that you give them the solutions they actually want and not what you assume they want.
You can maximise the success of your product or brand by taking the time to get to know who your target market is and allowing them to see that there are humans behind the brand who actually care about what they want and are prepared to talk to them and listen to them.
No matter how advanced technology is becoming, in certain situations there is simply no replacement for the human touch. Empathy plays a large part in positive company and team growth as well as social skills, the power of persuasion and negotiation, and these are all done better by humans and is what your customers will relate to.
Be patient
Building a system within your business, where humans and technology can work together with more of a balance, is where successful digital transformation will be most successful. One can’t work without the other but in your quest to beat off the competition, don’t overlook the heart of your business, which is the human element and ensure you invest as much in them as the technology you use. Take time to let a new company culture evolve and ensure that your employees understand the new structure and most importantly your vision as you are the ‘human’ who is implanting the change.
Welcome to a packed August issue of Interface Magazine! This month’s exclusive cover story is with a telecommunications giant. We…
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Welcome to a packed August issue of Interface Magazine!
This month’s exclusive cover story is with a telecommunications giant. We caught up with Verizon Consumer Group’s Executive Director of Sales Experience John Walker to discuss the telco’s transformation of its customer journey…
The largest wireless provider in the US, Verizon, with its 4G LTE network, covers approximately 98% of the States. The company has transformed its customer journey, while boosting revenue in the process, in an omni-channel offering that has reshaped its sales strategy.
Verizon Consumer Group’s Executive Director of Sales Experience across those channels is John Walker and it’s his job to examine the shopping path and the process of shopping in a bid to provide a greater experience for both the customer and the sales team. “We’re moving on,” Walker explains, “from having a channel-focused distribution strategy to a customer-journey focused one. It’s a big change…”
We also speak to Neil Williams, Director of IT and Digital Transformation
at the University of Derby, who has overseen massive changes at this
progressive tech powerhouse. Plus, we have an exclusive interview with Frank Konieczny, CTO at the US
Air Force and Borislav
Tadic, Vice President BMS & Transformation DRC at Deutsche Telekom.
All the best tech events and conferences are also listed, as are
the Top 5 companies deploying blockchain.
By Lee Metters, Group Business Development Director, Domino, “Get closer than ever to your customers. So close, in fact, that you…
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By Lee Metters, Group Business Development
Director, Domino,
“Get
closer than ever to your customers. So close, in fact, that you tell them what
they need well before they realise it themselves.” Steve Jobs
Every brand
aspires to get close to its customers to understand what makes them tick. Those
that succeed invariably deliver better experiences that inspire long-term
loyalty. Today, the world’s biggest brands know us so well they’re able to
personalise their marketing to match our individual tastes and behaviours. When
Netflix recommends you try Better
Call Saul, it’s because it knows you binge-watched Breaking Bad. The
personal approach works; whether it’s a Netflix notification or a ‘programmatic
playlist’ from Spotify, targeted recommendations – informed by deep learning
and vast data – hugely influence the content we stream. Steve Jobs was right:
successful brands get so close to their customers, they can tell them what they
need long before they know they need it. And we all keep coming back.
However,
not all brands are as fortunate as the digital disruptors. How do you get close
to your customer when your brand isn’t an online service that’s routinely
capturing user data? If you’re marketing a physical entity – a food, a toy, a
designer handbag or a male grooming kit – how do you even know who your
customers are (let alone what they need) when complex supply chains inevitably
separate you from your end-user? How can you add brand value when you can’t
build a direct relationship with your customer or lay the foundation for
long-term engagement? The answer is: you can. In fact, as Lee Metters, Group
Business Development Director, Domino, examines, with the advent of simple,
affordable technology, you can do it quickly, easily, and
cost-effectively.
New
opportunities
A convergence of factors is creating new opportunities for marketers to transform the way they manage their brands through the consumer lifecycle. The availability of personalised barcodes combined with the ability of smartphones to read them, has reinvented consumer behaviours, with shoppers increasingly scanning product barcodes to discover more about the brands they buy. However, until recently, the absence of standardised coding meant that brands needed to create proprietary apps to deliver their value-added features, relying on customers’ willingness to download ‘yet another app’ in a world of app fatigue.
The introduction of GS1 Digital Link barcodes, which provide a standards-based structure for barcoding data, has removed this need for product-specific apps. It’s opened up the potential for marketing innovation – such as digitally activated campaigns that can transform a product into an owned media channel – enhancing the brand experience and building stronger connections with customers. This key development has been assisted by the emergence of advanced coding and marking systems that are helping brands include more information on every product, allowing them to personalise customer experiences at speed and scale.
With
customer intimacy considered a key driver of commercial success, personalised
coding and marking can help brands achieve the Holy Grail of getting closer to
their customers. What’s more, it provides a platform for value-added innovation
that builds engagement, trust, and long-term brand loyalty. The potential
applications are exciting and wide-ranging.
Internet
of Products
Digital
innovation is not limited to online brands – practically every product can form
part of a connected and accessible online ecosystem. An internet of products.
In its simplest form, personalised barcoding can provide a gateway to online
content – user manuals, product details, blogs, communities, and customer
support – that enhances the brand experience. However, beyond the basics, the
opportunities for compelling customer engagement go much further. Leading
brands are using QR codes to trigger anything from loyalty schemes and
competitions to gamification and immersive brand experiences. Progressive
brands are using barcodes to create innovative gifting solutions – allowing
customers to record personal video messages to accompany their presents, giving
their loved ones a more memorable experience.
The
potential for innovation is significant – and the rewards are too. For example,
in Germany, Coca-Cola used barcoding on cans and bottles to engage directly
with consumers, with a simple scan connecting customers with ‘in the moment’
mobile experiences. The digitally activated campaign allowed Coca-Cola to
transform its products into an owned media channel, captivating customers with
personalised content, incentives, and competitions that generated unprecedented
brand engagement. The campaign has subsequently been rolled out across 28
markets in Europe and North America.
Provenance
and authenticity
Serialisation,
first introduced to safeguard the medicines supply chain against the plague of
counterfeit drugs, is now being widely applied across many industries –
allowing brand owners and customers to track and trace products and determine
their authenticity. This is a significant value-add in sectors like food, where
discerning consumers are increasingly interested in the provenance of produce,
and the journey foods make from farm to fork. With carbon footprint and other
environmental issues now a key influence on consumer purchases, traceability is
a major value-add across most commercial industries.
The
value of data
Barcode
innovation undoubtedly provides considerable value for consumers. With research
showing that customer experience is the most competitive battleground in
consumer markets, qualities such as transparency, social responsibility, and
open engagement are all crucial ingredients in a trusted brand experience where
personalised barcoding can help. But the value exchange isn’t all one way:
marketers benefit too.
Direct link barcodes provide a mechanism to capture a rich seam of real-time data that can help brands understand – and respond to – customers’ needs. Simple information such as user profiles, geo-location, purchase history, dates, and times can be leveraged to build a dynamic picture of individual customers, helping to inform a wide range of services and communications. This data can provide a powerful marketing platform – an organic and automated CRM – to target customers and personalise communications based on identifiable preferences and behaviours.
Marketers can understand customers’ buying cycles to trigger timely and relevant alerts. They can upsell products and accessories, nudge customers when warranties expire, or past purchases are getting old and tired. And just like Netflix, they can recommend new products that customers will love – long before they know they need them.
Cracking
the code
The
emergence of GS1 Direct Link barcodes – and the smart technologies that support
them – is transforming the retail experience, helping consumers find out more
about the products they buy and bringing brands much closer to customers. As
the High Street battles tough economic conditions and the rise of digital
disruptors, the successful brands of tomorrow will be those that exploit the
creative opportunity of personalised barcoding and deploy advanced coding and
marking systems that make the magic happen.
The recent Maze Group report outlines that if the UK’s 237,000 adults’ nurses in acute, elderly and general care were to work in innovative productivity-enhancing hospitals, they would gain back a total of 25 million hours of time back every year. This equates to adding 13,500 full-time nurses to the NHS workforce. This is due to the current hospital facilities hindering optimum productivity. The report outlines that four in 10 public sector workers stated that they were unproductive for more than two hours every working week because of their workplace environment
The NHS is a recurrent issue in the UK, shown by its
centrality to the Brexit campaigns and the current conservative leadership
election. However, the NHS is facing severe staff shortages, and
resources to fund public services are scarce. Tax rises to boost budgets are
politically unattractive, but due to the UK’s increasingly ageing population,
there is an urgent need to find a solution.
One new solution now being discussed is innovative productivity.
At the moment, more than 95% of data on a building site is lost or not even recorded, meaning contractors are building new facilities from scratch, over and over again. New construction technology means going forward structures will be created by a standardised set of components that incorporate significant amounts of feedback from end users into the next iteration of the design. New digital blueprints can lead the construction process by ensuring collaborative access to current plans, documents, appointments, and contacts for the whole of a project team, as well as providing sight of far more of the supply chain, manufacturing process and on-site requirements from the outset. Subsequently, this means going forward hospitals can be manufactured following the same interactive blueprints. The standardization of hospitals should enable trained health care workers to perform effectively in any new facility.
PlanRadar co-founder, Sander Van de Rijdt, believes the tech
revolution finally happening in construction means ideas about how structures
and buildings are built will be different in the future, designed instead
around the user and optimised for how people use their spaces and environments.
This revolution will change how our public services are delivered and tap into
the hours of unlocked productivity in UK hospitals.
PlanRadar is designed to tackle productivity issues. Their
users already realising time savings of seven working hours per week on
average, which is roughly around 18% of their working time and leads to reduced
costs of up to 70%. It’s one of the new construction technologies that will be
pivotal in building the next wave of innovative productivity-enhancing
hospitals and improving the future delivery of the NHS.
Alan Gibson, Senior Vice President, EMEA at Alteryx It’s no secret that data and analytics play a key part in…
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Alan Gibson, Senior Vice President, EMEA at Alteryx
It’s no secret that data and analytics play a key part in
every organisation’s digital transformation efforts. Data science has become a
rapidly progressing field thanks to the crucial role it plays in understanding
big data.
Although data has become a real game-changer harnessing
it is not always straightforward and many global corporations are struggling to
leverage their data assets. These strategies generate an overabundance of data
– and even more questions, requiring more analytics than most can possibly
imagine. They also require continuous analytic breakthroughs in order to
achieve a true digital transformation.
This pressure to exploit data in new ways and the
increased emphasis on digital transformation is also causing a tremendous
amount of strain on organisations’ analytics teams. Although many are investing
heavily in data technologies to transform their organisations, quick access to
information and insights can be impossible – and many are still failing at
putting this data in the hands of the business people who must make use of the
insights.
A key tactic for improving data access and providing
insights involves bringing the two elements of data and data science together. For many organisations unifying these in order to
drive digital transformation continues to be a challenge. Every vertical and
department has a need for ingesting disparate content and performing complex
analytic processes against it to drive value from the massive accumulation of
’dark data’ stored by organisations. Unlocking the value of such data through
data analytics is key to guiding leaders make more informed decisions.
One of the principal ways in which organisations can unify
data and data science is by changing the status quo and developing an analytics
culture across the business. Analytic teams serve as the backbone to digital
transformations, but more often than not we find that analytic teams are
starting from an insufficient position, attempting to innovate with legacy
holdovers of analytics processes, technology and team alignments. Holding on to
these relics are the biggest barriers to analytic alignment and innovation.
Leaders focussed on digital transformation should targe
both cultural and technology strategies that help to create an analytics
competency to fuel digital innovation. This is no small task. With data skills
in short supply and demand for data-related roles set to continue to rise
within the next four to five years, this is either exciting or intimidating
depending on what side of the analytic effectiveness spectrum you’re sitting!
Linking up data insight to people with vital business
knowledge is paramount to organisations wanting to make the most of data
analytics. Not only will it enable the organisation to understand data
analytics at every level it will also create an army of ’citizen data
scientists’. Uniting departments that otherwise would have been siloed while
generating more insightful and valuable analyses. Empowering these burgeoning
citizen data scientists is a unique opportunity for organisations to compete in
today’s digital economy. These individuals are eager to learn and develop new
skills to improve their personal development and contribute to the business,
but they can only be harnessed with the right enablement, support and
self-service tools. What’s more, according to a survey conducted by Forbes Insights in
collaboration with EY organisations which have an analytics strategy central to
their overall business strategy are approximately five times more likely to
achieve revenue growth and operating margin greater than 15 per cent, as
compared to organisations lacking an analytics vision.
With the hyper-focus on digital transformation, it’s
important to keep it in perspective. It isn’t always about new ‘things’, it’s
about new value. Harnessing the networking effect of data, people and
technologies paves the way to creating a sustainable cycle of analytic
innovation that drives digital transformation.
ENDS
Alteryx offers
an end-to-end analytics platform that empowers data analysts and scientists
alike to break data barriers, deliver insights, and experience the thrill of
getting to the answer faster. Organisations all over the world rely on Alteryx
daily to deliver actionable insights.
By Amyn Jaffer, Head of Intelligent Automation, Ultima Most businesses now recognise they will need to embrace intelligent automation to…
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By Amyn Jaffer, Head of Intelligent Automation, Ultima
Most
businesses now recognise they will need to embrace intelligent automation to
gain competitive advantage. From improving business processes and customer
experience, to using ‘cobots’ to work alongside their workforce, AI offers companies
huge scope to improve their business efficiency and drive innovation.
Yet,
while many companies are excited about the potential of this new technology,
the very concept of AI often evokes fear of the unknown for others – especially
for businesses that, understandably, don’t know where to start on their Intelligent
Automation journey. As with most daunting tasks, the best approach is to take
incremental steps.
RPA: a good place to start
An
ideal first step on the road to digital transformation is the introduction of
RPA (robotic process automation), which uses robots to handle high-volume,
repeatable tasks that previously required humans to perform them. These tasks
can include queries, calculations and maintenance of records and transactions.
As
well as being relatively simple to implement, using software robots is both
affordable and effective; and the potential benefits are impressive.
As
an example, RPA can be used by HR teams to ensure each company department has
the same information about every employee without the typical challenges of running
multiple system records and repetitive re-entry of information. It can also be
used for absence management and for processing applications, saving time for
your employees to focus on more strategic work. As a second phase,
organisations can then make HR information more accessible by implementing
chatbots.
Any
large-scale activities or groups of repetitive tasks that draw on or feed
information into multiple systems are also candidates for intelligent automation.
In practice, this could mean using cognitive services such as text and
sentiment analysis to process and respond to natural language text within
formats such as emails, documents and live webchats. The aim is to extract data
from these sources without the need for human intervention.
One
training provider which takes up to 400,000 first line calls annually is using
speechbots to answer calls and leverage RPA to verify the caller. This has
resulted in reduced operational expenditure in the call centre by 50% and
increased efficiency.
Similarly,
cognitive services can also be used to improve business efficiency through visual
recognition. One company is using this technology to tag information in
photographs – a task that would take hundreds of man-hours to do, but just
seconds with cognitive services.
At
Ultima, we have been using RPA technology to automate our own back-end operations
and we’ve seen productivity rise by a factor of two since implementing the
technology across five processes. For example, we automated our forecasting and
planning tasks. Software robots collate real-time sales and marketing
information and process all the information they collect during the day to
produce detailed forecasts and business intelligence for the next morning.
Usually this took eight to ten hours per day of staff time. As a result, the
business has improved business intelligence to plan with, and staff have more
time to spend on customer service and strategic thinking.
The next level
Taking
care of mundane tasks, RPA frees companies to explore more complex AI-based
automation – using visual and cognitive intelligence that draws information
from multiple sources and interprets it to deliver improved business
intelligence.
By
automatically collecting and sifting through vast amounts of data and then
training robots to make sense of the data by asking the data pertinent
questions, businesses can start to solve the problems that have been keeping them
up at night. For example, analysing customer data to establish insights into
how different things affect their purchasing decisions can give real business
benefits and drive innovations in how a business might supply and market its
goods.
However,
before taking this next step, it’s important for any organisation to look
practically at their infrastructure, workforce and security, and consider what
might need to change to enable their businesses to be set on a positive path to
digital transformation.
Ready for the future
Ultimately,
we’re all likely to have a ‘virtual worker’ by our sides helping us to do our
jobs, cutting out mundane, repetitive tasks and freeing us up to be more creative
and focus on business goals and innovation. To reach this stage the right
foundations need to be in place, and the adoption of RPA is the best place to
start.
Automated
machines will collate vast amounts of data and AI systems will understand it.
By coupling two different systems – one capable of automatically collecting vast
amounts of data, the other that can intelligently make sense of that
information – individuals and businesses will become more powerful.
Take a deep breath,
jump in and get ready to realis
This month’s cover features Gary Steen, TalkTalk’s
Managing Director of Technology, Change, and Security, Gary Steen regarding the
telco’s commitment to thinking, and acting, differently in a highly competitive
marketplace…
TalkTalk is an established telecommunications company that fosters a youthful, pioneering spirit. “I like to think of TalkTalk as a mature start-up,” says Managing Director of Technology, Change and Security, Gary Steen. “We are mature in terms of being in the FTSE 250, with over four million customers, relying on our services every day through our essential, critical national infrastructure. But that said, I definitely think we start our day thinking as a start-up would. What can we do differently? How do we beat the competition? How do we attract great talent? We’ve got to come at this in a different way if we are going to succeed in the marketplace. We are mature, but we think like a start-up.”
Elsewhere we speak to Natalia
Graves, VP Head of Procurement at Veeam Software who reveals the secrets to a
successful procurement transformation. Graves
was tasked with looking at the automating, simplifying, and accelerating of
Veeam’s procurement and travel processes and systems around them, including
evaluating and rolling out a company-wide source-to-pay platform. “It has been
an incredible journey,” she tells us from her office in Boston, Massachusetts.
We also feature exclusive interviews with PTI Consulting and cloud specialists
CSI.
Plus,
we reveal 5 of the biggest AI companies in fintech and list the best events and
conferences around.
Digital transformation is making it easier for procurement organisations to “do more with less,” according to newly-released Procurement Key Issues research from The Hackett…
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Digital transformation is making it easier for procurement organisations to “do more with less,” according to newly-released Procurement Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). But there is still significant need for procurement to address its critical development priorities for 2019, including: improving analytical capabilities, aligning skills and talent with business needs, leveraging supplier relationships, enhancing agility, and achieving true customer-centricity.
Digital transformation is beginning to have a significant impact on procurement organisations, The Hackett Group’s research found, with 30-40 percent saying it has had a high impact in achieving enterprise objectives, enhancing performance, optimising the service delivery model, and addressing roles, skills profiles, and needs. Over the next two to three years, procurement organisations expect the impact of digital transformation to dramatically increase, with key areas like robotic process automation and advanced analytics seeing particularly high adoption growth rates (2.3x and 60 percent, respectively). Broad adoption of e-procurement technologies is also expected to grow by nearly 2x.
Procurement expects its budget to grow at a much slower pace this
year than in 2018 (1.3 percent, versus 2.7 percent last
year). Procurement staffing shows a similar trend, with 0.9 percent
growth expected, versus 2.8 percent in 2018. With revenue growth expected to
increase from 5 percent in 2018 to 5.7 percent for 2019, this creates
significant productivity and efficiency gaps
that procurement organizations must overcome.
A complimentary version of the research is available for download,
following registration, at this link:http://go.poweredbyhackett.com/keyissuespro1902sm.
Note – The full research piece includes 7 charts containing more than 60
complete metrics.
Procurement has aggressive plans to increase its use of digital
tools and procurement-specific technologies over the next two years, the
research found. Procurement will invest heavily in cloud-based
business applications along with several data management technologies: data
visualization (where adoption rates will rise by 24 percent), master data
management (57 percent adoption growth), and advanced analytics (60 percent
adoption growth). Spend optimization analytics and dashboarding adoption rates
are expected to grow by 61 percent. Broad-based adoption of
e-procurement technology is expected to grow by nearly 2x.
Use of mobile computing and robotic process automation (RPA) are also
expected to rise dramatically, indicating a focus on more efficient, agile
processes across the procurement lifecycle. RPA sees the highest
adoption growth rate among digital technologies, at 2.3x. While RPA is
primarily being used for procure-to-pay processes at present, there are a range
of other procurement areas that can benefit from automation of
repetitive work, including updating of vendor master files and electronic auction
setup.
Procurement-specific technologies are expected to become far more
broadly adopted over the next two years, with nearly universal adoption of
e-procurement, spend optimization analytics, and supplier relationship
management systems, and just slightly lower adoption rates for e-invoicing and
contract lifecycle management. This represents a major shift toward
customer-centricity, designed to enable organizations to simplify and
streamline processes, and improve agility.
The research found that procurement’s 2019 actual transformation focus is poorly aligned with what should be its critical development priorities; i.e. areas identified as of critical importance, but with very limited ability to address. Among those, development of analytical capabilities is a transformation focus for about half of procurement organisations. Modernising application platforms is another top transformation focus, and is a key way to achieve simplification due to the complexity of many legacy environments. Consolidating multiple legacy systems is also a critical step towards to improving data management and analytics.
But of the other critical development areas, less than a third of
all procurement organizations have a major initiative in place to
improve skills and talent with business needs, and even fewer said they intend
to work on agility or focus on improving customer-centricity and supplier
relationship management capabilities.
Procurement is also focused on its role enabling the enterprise in
2019, with an array of priorities that include elevating their role as a
trusted advisor, continuing to reduce purchase costs, improving stakeholder
satisfaction, and enhancing agility.
“Procurement organizations are clearly making investments in
digital transformation and are seeing real benefits. The focus on improving
analytics for 2019 is particularly encouraging. But the laundry list of
critical areas where they have very limited ability to make improvements is
very disconcerting,” said The Hackett Group Principal &
Global Procurement Advisory Practice Leader Chris Sawchuk. “Despite
the fact that procurement knows what it needs to do, it’s simply not
fully translating into an effective plan of action. Procurement must
become fully dedicated to advancing its capabilities in analytics,
customer-centricity, agility and more, while also investing in the right talent
to help lead those changes.”
According to The Hackett Group Research Director Laura Gibbons, “Failing
to address the five critical development areas poses a significant risk. For
example, we see skills & talent as a particularly critical risk
factor. Procurement has begun to truly invest in digital
transformation, but if it doesn’t have the right people in place, digital tools
could end up being misused or wasted. You need the right people, with the right
skills in place, to take full advantage of what digital transformation can
offer.”
This same issue holds true in several other of these critical
development areas,” explained Gibbons. “Agility is critical if procurement
is to be able to respond to market changes. Without a focus on
customer-centricity, procurement can miss significant opportunities
for improving efficiency, simply because they don’t effectively know what the
business needs. And without supplier relationship management, opportunities for
innovation can be missed.”
Sawchuk explained that the potential impact of digital transformation
in procurement is powerful. “Advanced analytics can enable companies
to become less reactive and more predictive, more quickly and accurately
identifying and avoiding risks. It can drive dashboards where anyone can log in
and get real-time data. Dynamic discounting is another area that can be
very challenging for many companies, but can be easily enabled by digital
transformation.”
“Smart automation can reduce operating costs, and eliminate
transactional work, freeing up staff time for more value-added efforts,” said
Sawchuk. “Even if procurement can simply focus on a larger percentage
of the spend base, the value is very significant. And digital tools can
streamline and improve the experience of internal customers and suppliers.”
The Hackett Group’s 2019 Procurement Key Issues research,
“2019 CPO Agenda: Building Next-Generation Capabilities,” is based on results
gathered from about 150 executives in the US and abroad, most at large
companies with annual revenue of $1 billion or greater.
Neill Hart, Head of Productivity and Programs at Computer Systems Integration (CSI), speaks exclusively to The Digital Insight about how…
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Neill Hart, Head of Productivity and Programs at Computer Systems Integration (CSI), speaks exclusively to The Digital Insight about how the company has moved beyond simple systems integration and helps customers find and exploit a ‘perpetual edge’ in technology innovation and digital transformation. Click here to listen to the full podcast!
“As Head of Productivity and Programs at CSI and the head of enablement, I am the middle ground between strategy and execution. We take the company strategy, which is very much centred on digital transformation, and using utility or cloud computing, we take it to the market in a way that makes sense for our client base.
Companies will have three or four desired outcomes; grow the business, save money, innovate faster and to protect (data, reputation etc.). Traditionally it’s to save money. On-premise data centres require capex investment, you have to buy equipment, run it in a data centre and pay for electricity and power, operations etc. The offer of cloud or utility computing is that use what you need and only pay for what you use. You don’t pay a lot to the water company if you don’t turn the taps on. That’s the dream of utility computing or cloud computing is that you break away from the capex investment. It’s inflexible. If you run out of capacity with an on-premise data centre, you have to buy some more equipment and that takes weeks or months to arrive. With cloud, if you need some more you pay for more…”
It’s no secret that data and analytics play a key part in every organisation’s digital transformation efforts. Data science has…
SHARE THIS STORY
It’s no secret that data and analytics play a key part in every organisation’s digital transformation efforts. Data science has become a rapidly progressing field thanks to the crucial role it plays in understanding big data.
Although data has become a real game-changer harnessing
it is not always straightforward and many global corporations are struggling to
leverage their data assets. These strategies generate an overabundance of data
– and even more questions, requiring more analytics than most can possibly
imagine. They also require continuous analytic breakthroughs in order to
achieve a true digital transformation.
This pressure to exploit data in new ways and the
increased emphasis on digital transformation is also causing a tremendous
amount of strain on organisations’ analytics teams. Although many are investing
heavily in data technologies to transform their organisations, quick access to
information and insights can be impossible – and many are still failing at
putting this data in the hands of the business people who must make use of the
insights.
A key tactic for improving data access and providing
insights involves bringing the two elements of data and data science together. For many organisations unifying these in order to
drive digital transformation continues to be a challenge. Every vertical and
department has a need for ingesting disparate content and performing complex
analytic processes against it to drive value from the massive accumulation of
’dark data’ stored by organisations. Unlocking the value of such data through
data analytics is key to guiding leaders make more informed decisions.
One of the principal ways in which organisations can
unify data and data science is by changing the status quo and developing an
analytics culture across the business. Analytic teams serve as the backbone to
digital transformations, but more often than not we find that analytic teams
are starting from an insufficient position, attempting to innovate with legacy
holdovers of analytics processes, technology and team alignments. Holding on to
these relics are the biggest barriers to analytic alignment and innovation.
Leaders focussed on digital transformation should
target both cultural and technology strategies that help to create an
analytics competency to fuel digital innovation. This is no small task. With
data skills in short supply and demand for data-related roles set to continue
to rise within the next four to five years, this is either exciting or
intimidating depending on what side of the analytic effectiveness spectrum
you’re sitting!
Linking up data insight to people with vital business
knowledge is paramount to organisations wanting to make the most of data
analytics. Not only will it enable the organisation to understand data
analytics at every level it will also create an army of ’citizen data scientists’.
Uniting departments that otherwise would have been siloed while generating more
insightful and valuable analyses. Empowering these burgeoning citizen data
scientists is a unique opportunity for organisations to compete in today’s
digital economy. These individuals are eager to learn and develop new skills to
improve their personal development and contribute to the business, but they can
only be harnessed with the right enablement, support and self-service tools.
What’s more, according to a survey conducted by Forbes Insights in
collaboration with EY organisations which have an analytics strategy central to
their overall business strategy are approximately five times more likely to
achieve revenue growth and operating margin greater than 15 per cent, as
compared to organisations lacking an analytics vision.
With the hyper-focus on digital transformation, it’s
important to keep it in perspective. It isn’t always about new ‘things’, it’s
about new value. Harnessing the networking effect of data, people and
technologies paves the way to creating a sustainable cycle of analytic
innovation that drives digital transformation.
Welcome to the May issue of Interface magazine! Our cover story this month features FWD Philippines’ CTO Rogelio ‘Nooky’ Umali,…
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Welcome
to the May issue of Interface magazine!
Our
cover story this month features FWD Philippines’ CTO Rogelio ‘Nooky’ Umali, who
gives us the lowdown on disrupting the life insurance sector. Umali
and his team put the customer experience at the very centre of its innovations:
“We ensured that every single leg of a customer’s journey was assessed and then identified which
parts were the real pain points. The solutions were
then focused on resolving these pain points.”
Elsewhere, we feature Ed Clark, Chief Information Officer at
the University of St. Thomas, Minnesota, the guys behind innovative EV chargers
Andersen EV, Cranford Group’s Rachel McElroy and ‘CIO of the Year’ Vennard
Wright…
Digital skills shortages blight UK jobs market for 20 years A lack of technical expertise has fuelled skills shortages across…
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Digital skills shortages blight UK jobs market for 20 years
A lack of technical
expertise has fuelled skills shortages across the UK for the last two decades.
That is according to comparative analysis of the professional jobs market by
The Association of Professional Staffing Companies (APSCo), which is celebrating its 20th
Anniversary this year.
According to a 1999 report
from University College London, almost half (47%) of all ‘skill-shortage
vacancies’ that year could be attributed to a lack of technical expertise. For
‘associate professional and technical’ roles, the need for ‘advanced IT’ skills
was responsible for 31% of vacancies, while a lack of ‘other technical and practical
skills’ were responsible for a further 49% of all open
roles.
A separate report
published the same year by Computer Weekly revealed that C++ developers were
the most in-demand professionals with Java the second most sought-after skill
in the IT recruitment market.
Today, research
from The Edge Foundation suggests that around half of all employers (51%) have
been forced to leave a role open because there are no suitable candidates
available, and that tech job vacancies are costing the UK economy £63 billion a
year. LinkedIn data
indicates that cloud and distributed computing is the most valued skill among
employers, with user interface design, SEO/SEM marketing and mobile development
also featuring in the top 10.
Commenting on the analysis, Ann Swain, Chief Executive of APSCo, said:
“While the specific skills
that employers are seeking have changed dramatically over the past two decades,
the fact that talent gaps continue to be aligned with technical competencies
suggests that we need to do more to boost Britain’s digital capabilities.
“Our members have long
reported shortages of talent across the IT and digital fields. For this reason,
it is crucial that we ensure that we retain access to the STEM professionals
that businesses need in the short term – through maintaining access to global
talent and retaining our flexible labour market. However, perhaps more
importantly, we must pipeline the calibre and volume of skills we need for the
future so that we break free from this perpetual skills shortage. As this data
indicates, for the past 20 years we have been playing catch-up – and we must
break the cycle if individual businesses, and the wider UK economy, are to
fulfil their full potential.”
Technology is becoming a tool for expanding human senses and abilities. This requires intelligent and immersive interfaces. Will voice, gesture…
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Technology is becoming a tool for expanding human senses
and abilities. This requires intelligent and immersive interfaces. Will voice,
gesture and thought control soon replace keyboards and touchscreens?
Reply’s study, conducted with the trend platform SONAR, examines trend-setting concepts for interfaces between
humans and computers – Human-Machine Interfaces – which are now becoming real
possibilities for communication between humans and machines. For companies,
there is significant potential for more personalised and emotional customer
interaction as well as new possibilities for the visualisation and analysis of
information.
Voice assistance
20 million people worldwide already use voice
assistants daily to search for information, make purchases or play music. Also,
in the corporate environment, voice assistants enable a completely new way of
using technology and automate many tasks. The smart assistants perform entire
tasks, record things or make calls without any human intervention. This
increases productivity and leaves employees with more time for challenging
tasks. Through voice interfaces devices can be controlled using voice input,
and smart software agents will be able to perform an increasing number of
services in the future. What’s more, electronic in-ear devices, so-called
hearables, can be used for a wide range of applications, from wireless data
transmission to communication services.
Extended Reality (XR)
The technologies combined under XR enable barrier-free
interaction between man and machine and eliminate geographical distances. They
revolutionise people interaction with the environment: Augmented, Virtual and
Mixed Reality support consumer decision, reduce costs, increase efficiency and
a more productive environment. Other emerging trends include gesture control
and 3D displays, which create a virtual three-dimensional image of an object
and offer interactive possibilities. Smart glasses, which provide the wearer
with additional information about what they are seeing, are also among the XR
trends.
Full Immersion
Full
immersion technologies allow the direct exchange of information between man and
machine. Advances in fully immersive technologies and neurosciences show that a
world in which people are fully connected to computers is coming. Scientific
research in medicine is leading the way into a future in which the human brain
can control computers with mere thoughts and exchange ideas via headsets or
brain implants. Companies are already working on neurally controlled
interfaces. They offer direct communication channels between a networked brain
and external devices. Another trend technologies are in the area of augmented
bodies, which aim to strengthen the human body and its performance using things
such as implants or electronic tattoos.
Furthermore, the study also identifies four visions
that could soon become reality:
Sending thoughts: ideas,
feelings and memories to be shared directly with other people.
Human enhancement: by
directly connecting the brain with computers, AI-controlled assistants and the
Internet, know-how can be downloaded into the brain or expanded with
super-intelligent AI systems.
Neural healthcare: immersive
technologies may enable people to recover from diseases that are still
incurable today, such as Parkinson’s or paralysis.
Virtual copies: by
connecting to computers, a person’s thoughts, memories and feelings can be
stored as data and, one day, may even make a complete virtual copy of the brain
possible.
“Communication between man and machine is one of
the most exciting topics of our time. Technologies at the interface between us
and intelligent systems will enable a paradigm shift in all areas of life in
the near future. The resulting new products and services will offer completely
new solutions for telling stories and visualising information. The three trends
identified by SONAR and the four visions provide companies with guidance on
their journey towards digital transformation,” says Filippo Rizzante, CTO
Reply.
The Human Machine Interfaces report is part of a
series published on the following topics AI,
Retail
Revolution and Consumer-IoT.
Coeus Consulting, an award-winning independent IT consultancy, has announced new research revealing that although the fate of many organisations depends…
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Coeus Consulting, an award-winning independent IT consultancy, has announced new
research revealing that although the fate of many organisations depends on
their ability to implement strategic change and to adopt disruptive
technologies, a reported lack of business and IT alignment, coupled with a
corporate fear of risk, means they risk losing out on crucial revenues and
market share.
Just 21% of those surveyed stated they seek to implement new technology as soon as possible, with some of the main barriers to adoption being: fear of disruption to core business (30%), lack of budget to adopt new technology (21%), and poorly planned adoption strategies (19%).
“While it is reassuring that
organisations are at least attempting to keep up with disruptive technologies,
it is somewhat concerning that they are not doing more. Monitoring advancements
is the first step on the road, but only three in ten organisations make
technology decisions in the boardroom. With technology now playing a vital role
in every industry, organisations need to increase their understanding of
technology and be prepared to take more calculated risks in order to reap the
benefits and execute successful strategic change”, Keith Thomas, Head of IT
Strategy Practice, Coeus
Consulting commented.
Successful implementation rates
are low among respondents which could explain these fears, with only seven
percent noting that all of their organisation’s strategic IT change projects
have met initial objectives over the past two years. The good news is that, of
those from organisations that have a test and learn culture, and also set
objective success or failure criteria for initiatives in advance, almost sixty
percent report that their organisation investigates or adopts a different
approach when initiatives don’t meet objective success criteria. “Organisations
are blinkered to the market and must be willing to tread the fine line between
adopting technologies quickly and rushing the process by investing in the wrong
technology, otherwise they risk being overtaken by their competitors and will
see declining revenues”, commented Ben Barry, Director, Coeus
Consulting.
Aligned and informed
organisational leadership is clearly an issue within organisations where at
least some strategic IT change projects have not met initial objectives, with
just over seventy percent admitting one of: business plans changing, senior
management not buying into the change, or not taking enough risks as a reason
for failure. “This is disconcerting, if those at board level are failing to see
the benefits of strategic IT change, then implementation, adoption and
deployment of new technologies is destined to fail. Businesses need to ensure
board-level understanding of the importance of IT, as well as building stronger
strategic IT change capabilities”, added Thomas.
“Consumer demand for new and
improved offerings, paired with demand for digitalisation from the business,
means that organisations not only need to increase the speed at which they are
doing things, but must also match, or stay ahead of the offerings from
disruptive and agile competitors”, Thomas noted.
Seeking to discover how
organisations view the next wave of disruptive technology, almost a third (29%)
of respondents believe artificial intelligence represents the most significant
innovation set to impact their industry in the next two years, with data and
analytics (18%) next in line. Despite their predictions on the next generation of
technology, only 38% of respondents say they operate with dedicated teams
monitoring the latest advancements. This suggests sixty percent of
organisations could be operating with little knowledge of innovations taking
place outside their four walls.
Despite the current economic
climate, funding seems to be a secondary issue. Last years’ research found that
just over six in ten (62%) of respondents predicted an increase in the size of
their budget for the coming year. In actual fact, only 50% of respondents from
the survey this year reported an increase.
However, just over 50% of
respondents reported that digital services are being funded from the IT budget
in their company, and additional funding is also allocated from elsewhere. Indeed,
approaching six in ten (57%) are anticipating an increase in their budget for
the financial year 2019 to 2020. This indicates that business leaders
appreciate the need for IT in their current and future operations to the point
of allocating funding, but not always to the point of consistently aligning
with their IT counterparts.
Increasing operational efficiency
(49%), customer satisfaction (32%) and increasing revenues/sales (31%) top the
list of drivers of strategic IT change projects, demonstrating the expectations
around the business value of IT change are not being effectively driven.
Businesses need to recognise the
consequences that slowing IT spend, and ultimately, stagnating progress, could
have on their business prospects. Taking unnecessary risks could lead to the
downfall of an organisation, but in reality, spending on technology and taking
a fail-fast, calculated approach to IT risk is now a necessity.
