Part 4 — What do we want?
This post is the fourth and last one in a series of four. It finds its origin in #AutoProcure, the exciting initiative that Kelly Barner, from Buyers Meeting Point, and Rosslyn Analytics, recently launched to create “an active discussion around procurement’s relationship with automation: both what it is and what it ought to be.”
In the three previous posts, I addressed some of the key questions that new technologies pose for the future of work in Procurement. Cognitive Procurement is the future of Procurement, and it is important to go towards it knowing what it means and implies.
“In the future, adopters of […] “cognitive procurement” will be the ones driving the profession forward. […] Essentially, what this amounts to is agility. Something Chris Sawchuk, principal & global procurement advisory practice leader at The Hackett Group, advocates if the sector is to flourish. According to Sawchuk, 74% of procurement professionals say agility is important, yet only 36% say they know how to improve it. “Agility is there, it’s just not systemic,” said Sawchuk.” — Supply Management, April 2016
The next question is to know who is accountable?
After all, collaboration relies on trust...
But, the most important issue is: what do we want for the future of work (in Procurement)?
“As robots increasingly occupy the world alongside us, the global economy will undergo a revolution spurred by artificial intelligence and machine learning that could be as consequential for labor forces as the agricultural, industrial, and digital revolutions that preceded it.” The Industries of the Future, Alec Ross
In the three previous articles, I used aeroplanes and self-driving cars as examples. They exemplify the challenges and opportunities that Cognitive Procurement represents. They also illustrate the question of “what do we want” for the future of work.
For example, in part one, I told the story of the Airbus A320. It is the first commercial plane that saw the number of crew members in the cockpit reduced because of the introduction of more computers. But, going from three to two people in the cockpit may just be the beginning.
Some airlines have already been asking manufacturers whether the one-man cockpit is doable,” says Braun of the Cockpit pilots’ union.” The Computer vs. the Captain, Will Increasing Automation Make Jets Less Safe? Part 5: At What Point Do Pilots Become Redundant?
And after only one pilot… why not zero. The question is, if I can say so, in the air. We may soon board drones.
The same applies to self-driving cars. Uber (and the likes) totally changed the taxi industry with a new business model and a new user experience (the latter explaining the huge success). The next step for Uber is the introduction of self-driving cars. And, after the taxi industry, what is looming on the horizon is the trucking industry. Self-driving trucks are coming!
For now, the impacts are somehow limited:
- Uber is not authorized to operate in some areas
- Self-driving cars and trucks are not approved on most roads
This is because, as Gartner’s Mark Raskino and Graham Waller write in Digital to the Core: Remastering Leadership for Your Industry, Your Enterprise, and Yourself, the three conditions required to reach a tipping point are not fulfilled.
“Three progress dimensions of digital disruption — technology, culture, and regulation — intertwine. Each advances with a different cadence.” Digital to the core by Mark Raskino, Graham Waller
For Procurement (and knowledge work in general), the transformational impact could be similar. Cognitive technologies are just starting to be available in solutions. The acceptance from practitioners is also in its infancy. But, the future of Procurement could be like what KPMG describes (in their study of the four potential evolutions of Procurement in the next 20 years) and that they called “R.I.P. Procurement”:
”In this scenario, procurement is laid to rest because technology has developed so dramatically (vertical axis) that most procurement processes are fully automated, making procurement as we know it obsolete. Artificial intelligence is widespread and company organization is predominantly decentralized.” Future-proof procurement — Now or never: the big Procurement transformation, KPMG and Florida State University College of Business, April 2016
The fact that technology has a profound disruptive impact is something that cannot be negated. I am not saying that we should stop investigating new technologies because of that. What we have to do though is to think how we want to put them to use. That we make informed decisions based on a long-term approach and not just short-term gains. We have to have a strategy.
Next:Economy & Next:Procurement
Society, and to a smaller scale, Procurement is at a crossroads with regards to its digital transformation. Society (and Procurement) has to find its second curve:
”The Second Curve is our chance to make up for any shortcomings on the first curve, to redeem ourselves and to show that we have learnt from the past in order to create a better future.” The Second Curve: Thoughts on Reinventing Society, Charles Handy
In the interview, O’Reilly touches on some of the most critical questions that our society will have to address to define, what he calls, the Next:Economy.
When I read the article, I could not stop myself thinking how well it fits with Procurement regarding:
- defining the future of Procurement (the visible part),
- the broader role and impact of Procurement in society.
It also made me think about the gap I have been talking and writing about: what Procurement is vs. what Procurement could (should) be.
At the end of the day, Procurement can only be as “good” as the companies and organizations it belongs to. And, as long as companies do not think “Next:Economy,” Procurement will not move to “Next:Procurement” which “could save the world”:
“Procurement saving the world” may seem exaggerated. But, it contains a certain truth. See, for example, this comprehensive business case for sustainability that Harvard Business Review recently published) when one thinks about the value chain: consumer => B2C company => B2B company. This value chains also highlights a key factor in defining the future (of work): consumers. Us!
”In this scenario, digitalization is also well-advanced, but humans have not yet been supplanted by machines. […] On the contrary, it has led to more diversified roles, tasks, and responsibilities. […] All information runs together at one central point — Procurement: Procurement is the rule of operational functions” Future-proof procurement — Now or never: the big Procurement transformation, KPMG and Florida State University College of Business, April 2016
The scenario described above is exactly what O’Reilly explains in another must-read article, Don’t Replace People. Augment Them, with strong and important messages:
- Don’t Replace People. Augment Them.
- If we let machines put us out of work, it will be because of a failure of imagination and the will to make a better future!
- What will new technology let us do that was previously impossible?
What to do?
As far as Procurement is concerned, all the questions raised in this series by the examples from other domains apply.
For example, in this post, Michael Lamoureux highlights the risk of having unsupervised machines taking sourcing decisions.
In this article, the Harvard Business Review also shows that machines can have negative impacts on market behaviours.
In Procurement too, I believe that what we want and what we have to do is to embrace technology and find the right balance between people and technology: Procurement People: Live Long and Prosper!
The purpose being to focus on what matters: value-based relationships: What is SRM²?
The technology being there to support, enhance these relationships, do some of the heavy lifting. The key word being: assistance!
Bertrand Maltaverne has extensive experience in the area of Procurement and, more precisely, in the impact of technology on procurement organizations. He currently works for a Procurement technology provider to help customers achieve success in the digital transformation of their procurement practice. Before that, he had various responsibilities in the procurement function of a Fortune 500 company. He is also active on various social media platforms, and he also blogs.