Cognitive Sourcing™ platforms can off load many of the heavy lifting tasks that procurement teams face every day. This includes data gathering, alerting the team to risks and opportunities in real time, identifying difficult to detect patterns in the data, and providing managers with specific information and suggestions for any situation, whether they are going into a meeting with finance or manufacturing, or heading into a negotiation with a supplier. While this seems like a lot of upside, it's not unusual to hear voices of concern.
Artificial intelligence (AI) and automation are expanding into workplaces worldwide. In Deloitte’s Global Human Capital Trends survey (2018), 47% of respondents said that their organizations were involved in automation projects with “24 percent using AI and robotics to perform routine tasks, 16 percent to augment human skills, and 7 percent to restructure work entirely.” An increasing number of people, 42%, expect AI to be widely deployed in their organizations in 3 to 5 years. Despite the growing confidence people have that AI will impact them and their industry only 31% of respondents felt that they are ready to address it. (Deloitte, 2018, p.73)
These same technologies are coming to the procurement industry, and the trends uncovered by Deloitte are mirrored in our own research. A LevaData survey of senior executives, responsible for over $450 billion in direct material spend, found that a vast majority considered data driven decision making extremely important to their work and a similar number reported being “very” or “extremely” interested in learning more about the capabilities of AI.
Like with the Deloitte results, for all the enthusiasm about the upside, there was some hesitancy. Roughly half (48%) of our respondents expressed worries that their teams weren’t prepared to leverage the competitive benefits of AI systems.
Concerns or Opportunities?
There’s a lot of concern around introducing new technology into organizations and what it means for individuals and teams. Will positions be eliminated? Should the organization train existing team members or search for new talent with pre-existing skills? What should the team focus on if prior tasks are automated? How will this change how the sourcing function is viewed by the rest of the company?
The introduction of Cognitive Sourcing will no doubt change the everyday goings on of a procurement job, perhaps reducing or even eliminating some current, time consuming tasks. But some of the more dire concern is misplaced. Rather than eliminate positions, there’s reason to believe that technology and automation could increase the number of positions in an industry.
Reasons for Optimism
While rote tasks can be handled by computer, complex tasks that require human involvement will expand as professionals begin to leverage the benefits of the AI. For example, Cognitive Sourcing allows more of direct spend to be brought under active management. This is the “long-tail” of direct spend which many teams don’t have the bandwidth to address today. With AI, teams can now focus their attention on previously neglected areas. This may actually require more participation by team members.
There will also be a shift in the work model. Sourcing professionals will be expected to not only have an understanding of data and analytics, but also problem solving, strategic thinking and soft skills as interactions with suppliers and internal teams become more frequent. These are, generally speaking, “high value” contributions.
While there will be new skills to learn, a well-designed AI platform buffers the end user from complexity and is designed with supporting people in mind. The insights and information provided by the Cognitive Sourcing platform will provide a level of transparency and facilitate communication between sourcing professionals and other members of their organization, allowing them to draw on skills and talent they might not otherwise have access to.
In combination, sourcing professionals and their new AI partner will be able to demonstrate even more value to the corporation. The sourcing group gains the ability to address more strategic points of impact through better visibility, more foresight, and increased agility. This will increase, rather than diminish, the importance of the procurement function within the enterprise.