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In this series of guest posts, Procurement Leaders asks solution providers in the procurement space for their predictions on the shifts in technology that will take place in 2015. In this, the second post in the series, The Smart Cube's Mark Bjedov and Mayank Taneja share their views.
Q: What will be the most influential trend in procurement technology to emerge in 2015?
A: There are a host of trends capable of shaping the procurement technology landscape in 2015, but one of the most influential will be the evolution of spend analytics to real-time, self-service applications. Many companies still rely on solutions that analyse historical data, which slows decision-making and allows spend structure to change significantly.
Q: How will this change corporate procurement practices?
A: Some changes are already underway. London-based Tungsten Network began offering a real-time spend analytics solution in 2014 that pulls data in almost-real-time from its e-invoicing system. Also, according to a survey by Rosslyn Analytics, 57% of surveyed CPOs employ between two and five people to conduct spend analysis, leading to increased costs. Introducing self-service applications will free up resources for other tasks and improve efficiency of the overall procurement process.
Q: Where should procurement focus its attention in 2015 to develop technological capabilities to improve business performance?
A: Procurement has two areas of need, not just nice-to-haves: real-time spend analysis and cloud-based solutions. Despite the recent attention both have received, offerings in this space are relatively new and adoption remains low. Concerns over data storage also continue to be a headwind that slows the pace of progress. That said, these two areas still form the most potent combination for procurement functions looking to place high-percentage technology bets with limited funds while remaining competitive. Of all the technologies poised to have a break-out year in 2015, cloud-based solutions seems closest to the fabled tipping point.
Q: More broadly, what other trends in technology do you see emerging that procurement/supply chain teams should be mindful of?
A: Two other technology trends with high-impact potential, but little chance of mainstream adoption in 2015, are procurement's use of virtual payments/ virtual cards/purchasing cards, as well as the use of artificial intelligence (AI).
One reason for the growth of virtual payments/cards may be the fact that in 2014, European firms wrote off roughly $465bn of debt due to late or non-payments by customers, up 3% from the year before. Supporters say virtual payments help maintain healthy supplier relationships, improve payment data and reduce fraud/error risks. However, acceptance is low, even in developed countries such as the US, where paper cheques were used over 50% of the time in 2013.
With the widening base and growing complexity in procurement, companies have begun offering AI solutions that help streamline and automate processes. In one promising example of what AI can do, Locatory.com, a European aviation industry supply chain technology firm, introduced Amber AI, a tool capable of extracting relevant data from an email and automating the request for quotation process.