PART 1: Procurement In The Future – Humans Need Not Apply

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Author: Ben Shute FCIPS, CEO, Comprara

PART 1 of a 4-part series running through December on the challenges facing procurement, beginning with how automation is changing roles.

Are humans obsolete? It’s a strange question to ask, but if you read articles commenting on the current rise of automation, robotics and artificial intelligence, you cannot escape the notion that many futurists believe that we should all prepare to be replaced by machines.

To be fair, there is some basis for the alarm currently ringing through the economy and society. From the safety of their offices, white-collar workers have watched automation run riot through blue collar jobs.

Now that machines have moved from the factory floor to the back offices, it’s only natural that the “office worker” – the broad term that includes procurement professionals – plans for the rise of machines. The question isn’t if a change is coming. The question is what the change will be – and more importantly – how to plan, not only to survive, but to thrive, following the automation revolution.

To understand what we are on the verge of, consider what CEOs state as their top four concerns:
1) rising costs;

2) the emergence of new business models;

3) new buying patterns;

4) the emergence of new competitors and industry disruptors.

All these concerns are inexplicably linked to the automation revolution – either as the cause and/or the effect. Rising costs demand that organisations embrace cost-effective automation. But technological advances, such as automation, do not exist in a vacuum.

Broader technological advances enable automation to fuel new business models, alter customer buying patterns and lead the emergence of new competitors and disruptors.

The big technological innovation that’s changed our world is, of course, the internet. To consider how the internet has fundamentally changed white collar jobs, we only need to look at its impact on newspapers and journalism. Not too long ago, newspaper reporters were taking comfort from the idea that computers might put printers, truck drivers and newsstands out of business, but surely they, the reporters, would still be necessary. However, news aggregators and declining ad revenues, combined with many other large and small changes, have resulted in the death of many newspapers, not to mention the sharp decline in the career prospects of journalists and writers.

With the decline of journalism, we see the impact of all top four concerns of CEOs. The internet has changed how people consume their news and altered their buying patterns.

Bloggers and news aggregators were competitors and disruptors and they’ve forced the industry to consider new business models.

In the meantime, the news floor found itself weighed down by costs of bit writers, support staff and others that were no longer cost-justifiable. As a result, news organisations have embraced software and services that reduce their costs by eliminating previously manual processes.

However, journalism isn’t dead. It’s just changing, as have other professions that orbited the news media, such as advertising agencies. Investigative journalists and reporters have moved to new platforms that only exist because of the internet.

Writers have rebranded themselves as “content creators” for a multitude of new outlets from blogs, to YouTube, to newsletters. Advertisers too have changed with the time, now focusing on engagement as opposed to simply blasting ads to create awareness.

Procurement professional must do the same.

But before procurement roles can be altered, we need to understand how automation is changing the role.

Robotics in procurement

Robots are already in our offices. If your organisation is not employing Robotic Process Automation (RPA), it should be cause for concern, not complacency. RPA is the use of computerised tools to carry out repetitive, typically clerical, tasks. RPA is not a physical robot but a software bot that helps you save time by liberating you from doing repetitive tasks that need to be done. Organisations implement RPA within their procurement function because they want their procurement professional to spend more time engaging in growth-enhancing activities – not waste time doing process tasks of a largely clerical nature. In short, more thinking and less paper pushing.

On the surface of it, RPA is great. Just dig below the surface, and RPA is still great – but will RPA be good for you? Getting back to our earlier example of how automation changed the journalism industry, it used to be that the first job a new hire on the news floor would get was to write up sports scores.

The task was extremely mundane and routine. The definition of busywork, the writing up involved looking up scores from sports matches played overnight and writing up the results so they could be included in the next day’s paper.

Most newspapers had templates, so even the writing part of the job was extremely minimum. This role was the first to be automated, which is a good thing for the bottom lines of media organisations, but not so much for young journalism graduates who used to use this role as an “in” into the news floor.

Unless your role exclusively involves the kind of process work that RPA is poised to take over, RPA alone will not make you obsolete. However, RPA is an extremely powerful tool and it will shape procurement roles of the future.

An RPA implementation could start with something as mundane as having vendor email attachments downloaded and filed into a specific folder. Advanced RPA implementations include integrating demand forecasts with online vendor qualification and reverse auction tools.

RPA setups can also include the automated setup and issuing of purchasing orders. Indeed, the entire vendor selection cycle can be automated with the right RPA tools and services.

If your organisation started RPA integration tomorrow and in six months’ time their RPA setup was as advanced as automating the entire vendor selection cycle:
* What would your day be like?
* Would you rejoice at being free from the yoke of routine paperwork?
* Would you struggle to fill your time?
* More importantly, would the tasks with which you fill your time be growth-enhancement activities, or simply more busywork that the next round of RPA will remove from the hands of humans and assign to bots?

The ideal short-term scenario for procurement professionals is that RPA allows them to work 8-hour days and not be forced to pull 10 to 12-hour days to simply get everything done that needs to be done. But the fact that RPA is out there means that we need to take careful stock of what we do with our days. If your analysis of how you spend your time indicates that a great deal of your day is spent on process tasks and not value-enhancement activities, you must change. But the question is, what do you change to?

About the author
Ben Shute FCIPS, is a thought leader and CEO of Comprara, a consulting business that has led the market in the development of capability and capacity diagnostic applications.

  • Have you heard about PASA CPO Summit in March? ‘Future Proofing You’ will be held on 13 & 14th March 2018 in Sydney. 

 

Comprara offers capability & capacity solutions for buyers:

Capability:

www.skillsgapanalsysis.com – Capability and Departmental Analysis

www.academyofprocurement.com – Capability Development

Capacity:

www.comprara.com.au – Process Excellence and Transformation

www.p-i.com.au – Spend and Performance Analysis

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