procurement

2019 UX Procurement : what do buyers (really) think of their purchasing software ?

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For the past three years, the Purchasing Solutions Exhibition has been an opportunity to publish a survey conducted among approximately 350 buyers on their expectations in terms of purchasing software. Philippe Grange, director of the "Revelations UX Purchasing 2019" study conducted with Décision Achats, in partnership with the CNA, PWC and Media Dell'Arte, compared some software editors with the survey results.

Procurement SOFTWARES: A GROWING MARKET, WITH RISING EXPECTATIONS.

The market for procurement management softwares is estimated at more than $20 billion. It is rapidly growing and has emerged as one of the most dynamic sectors of the SaaS software market over the past 5 years. Mastering these complex software solutions requires a strong skill set for buyers, despite the rise of user-friendly interfaces in the SaaS revolution. Does the sector's growth and the editors' roadmap meet expectations? 65% of buyers who responded to the survey belong to companies of more than 2,000 employees, most of whom work in a purchasing department. Only 5% of buyers are part of a business department.

TOOLS INCREASINGLY ESSENTIAL...

UX e-procurement tools survey

Patrick CONQUET, VP Product Management emphasises that the survey figures are below IVALUA's adoption rate: 66% of users log in daily, and 30% once a month (IVALUA has the highest retention rate among e-procurement solutions). 

It is therefore reassuring to see that there is a good overall adoption rate of purchasing softwares!

Some features are still missing.

On-the-ground reality is quite different. Users es utilisateurs peinent à accéder aux tableaux de bord, souvent pré-configurés et qui ne contiennent pas le niveau de détail requis pour répondre à des questions précises sur le vif.

Half of all buyers are satisfied with their tool, but 21% find it obsolete or not optimised enough! 

UX e-procurement tools survey

Overall, the e-purchasing tool is considered secure with easily shared data, but the "digital" dimension is clearly considered as lagging behind, such as: the lack of integration with other tools, lack of multi-device compatibility and lack of automation linked to recent advances in AI… Anne TESSIER, from Synertrade, confirms and approves of the users' demand for flexibility. 

However, be careful "to distinguish between a "simple" access to a webapp thanks to 4G, and a real mobile app development as we have done for our suppliers”.

A product’s ease of use remains essential to become widely adopted.

End-users hardly involved by software companies…

To the question "Have you been in direct contact with the software company in order to adapt the tool to your personal needs? ", the answer "not at all" is the most predominant. 

The majority also indicates that they were not involved in the choice of their solution beforehand. However, they consider themselves to be fully informed about the benefits of the solution they are using. This difference can be explained. The buyers interviewed are the end users of the software, but not necessarily the customers and direct contacts of the software editors.

UX e-procurement tools survey

It is difficult to get all stakeholders involved, especially in large organisations, though this is the case for the majority of buyers interviewed for this study. Patrick DE COUCY, Managing Director at JAGGAER believes that it is unrealistic to respond to pain points individually. The real power of an e-purchasing solution is to cover as wide a range of needs as possible, avoiding elements the could cause the system to break down.

... But eager for new. 

Yet, buyers have a very clear view of what’s to be done! When asked about what their priority investments would be if they were decision-makers, the buyers chose (in order and out of 10 proposals):

  • adding new features for improvement

  • investing in RPA and process automation solutions

  • training and modernising the tools of the purchasing function

  • drastic change of software editor / suite 

  • support, recommendation and AI input.

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Buyers want to broaden their scope, and are just waiting to be better informed about the possibilities offered by the latest RPA and AI technologies. But above all, AI is seen as an essential evolution for the 2nd year in a row (see UX Purchasing 2018). 

About 15% of buyers require direct support: what about the virtual assistants mentioned in 2018?

This year, not a single word has been said about it… However, number of innovations were present at the fair such as askR.ai, the purchaser data assistant.

>> Discover how askR.ai gives suppliers detailed data in less than 2 seconds at Technicolor Procurement Department <<

Procurement chatbot: is accessing your supplier data in less than 2 seconds for real ?

Thanks to natural language processing (NLP) AI, buyers could work without Excel.

Procurement: AN EXCITING JOB, A TIME-CONSUMING REPORTING.

A buyer does not make purchases by pure luck. It is an area where one appreciates the constant challenge of negotiations, global strategic thinking or the fact of having concrete, quantified objectives to meet over different deadlines.

In the supermarket sector for instance, it is the wide range of tasks that appeals to junior buyers. Reporting, much less. It is, however, an essential aspect in the work of a buyer, because the proper maintenance of a monitoring table enables them to measure their objectives and quantify their needs. From receiving global data, formatting KPIs and reporting back to their manager, a junior can spend between 4 to 7 hours a week gathering the right information.

DATA: LONG TRAINING SESSIONS FOR BUYERS

As the volume of data grows and becoming increasingly complex, technical proficiency in procurement is expected to become highly important. Proof of this can be seen in the few ads selected below: data literacy is an asset for any buyer. (A rather advanced requirement in this job post to integrate the Supply Chain department where SQL skills are required)

It is therefore essential to train buyers not only to use Excel but also to use an ERP specific to purchasing, not to mention data visualisation tools such as Tableau or Qlik.

One would almost come to confuse the in-depth work on data, which is the prerogative of a dedicated data team, with the "simple" understanding of KPIs or the "simple" access to supplier data without prior filtering, vital to buyers.

Cédric Le Savéant, VP Digital Office Sourcing & Supply Chain Transformation at Technicolor, clearly explains :

"In a general reflection on data access at Technicolor, you need to be able to get answers without having to systematically train employees about pivot tables! “ Source: Technicolor: a databot to access Procurement KPI

NATURAL LANGUAGE PROCESSING TO ACCESS procurement core DATA

Category management typical questions to askR.ai

Category management typical questions to askR.ai

Category management typical questions to askR.ai

Category management typical questions to askR.ai

 Free Code Camp offers a simple reading chart to measure the impact of a "chatbot as a service". For a bot capable of speeding up low value tasks and embedded in a familiar work environment such as the Slack data assistant, two questions arise: is your bot a source of savings/income? Does your bot improve your reputation?

  • Is a data assistant provided on purchasing data a source of savings? YES.

At a rate of 30 min per day x 253 working days, for an average hourly wage of €17.3, it is €2188 per employee per year. Today, this is the case for GRTgaz, which saves 30 min per day and per employee thanks to askR.ai.

  • Does a data assistant improve your reputation? YES.

Maybe not in terms of customer satisfaction, but in terms of employee experience, yes. A professional assistant available 24/7 that saves you time on boring tasks? That's just amazing!

Buyers need more intuitive tools to make it easier to get started, without leaving accuracy and performance on the side. An askR.ai data assistant, based on natural language processing, ensures a quick start and almost instant access to key data in a buyer's daily activity, without the need for Excel training.

Webinar Technicolor

Cédric Le Savéant shared this feedback with you during a webinar on Thursday, June 20th at 11:30 am: "TECHNICOLOR & ASKR.AI: GET A CLEAR VIEW OF SUPPLIER EXPENDITURES IN 2 SECONDS"! (french)

 

* Qualitative survey ASKR.AI, between 2019 april to 2019 may .

Procurement management : 7 digital challenges to overcome in 2021

Being a purchasing director in 2020 means being aware of the growing importance of its role in terms of leading innovation in the company. Purchasing has in fact a double impact, as a performance driver that is key to maintaining and improving margins, but also in being at the forefront of innovation.

What is the impact on the strategic organisation of the purchasing department? What are the new challenges arising from the digitalisation of the purchasing department?

The increase in the volume/speed/variety of data in recent years has increased the risks related to the strategic integration of data. It is therefore up to the purchasing department to ensure that it anticipates these risks in its daily operations.

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CHALLENGE #1 - CHECKING DATA PROPERTY

More and more data is being collected by the purchasing department throughout the supply chain. This raises the question: when sensors are installed, for packaging reception for example, does the data belong to the company that manages the sensors, the manufacturer of the sensors, the company that had the sensors installed, etc.? Agreements need to be defined prior to this in order to be able to use this information correctly and transparently, as there is a real risk linked with data sovereignty. 

CHALLENGE #2 - SCRUBBING COLLECTED DATA

Collecting data is not enough to offer new opportunities. It is necessary to clean and standardise this data, which requires new skills... The purchasing department must therefore consolidate and clean its data thanks to skills developed internally, or externally with data specialists. One of the challenges will be to automate these two structural but redundant tasks

CHALLENGE #3 - PREDICTING RISKS THROUGH IA

Another challenge will be to use this data in machine learning simulations. Different solutions will be able to provide valuable input to purchasing departments, which would otherwise be impossible to get. AI offers the possibility of predicting trends (order peaks, stock shortages, cost increases or even identifying potential risk situations with suppliers (see this article).

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CHALLENGE #4 - SUPPLY CHAIN OPTIMISATION THROUGH CUSTOMER DATA

The increasing amount of data available on production lines represents an incredible opportunity for process optimisation. After integrating the data from the different management tools into a common IS, traceability can be clearly improved, as well as reducing storage costs. Close collaboration and data pooling between the purchasing and logistics departments will be essential for the purchasing department to meet this challenge.

CHALLENGE #5 - TACKLING INCREASING ELECTRONICS-RELATED EXPENSES

Regarding the evolution of the type of purchases within the company, purchases of electronic equipment has boomed. Between the performance needs of employees and the programmed obsolescence of suppliers, the purchasing department will have to anticipate the importance of this type of expenditure.

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CHALLENGE #6 - FINDING INNOVATION: THE UNEXPECTED CHALLENGE

Unexpected but logical, as purchasing is nowadays at the forefront with external suppliers. As start-ups grow in size, the relationship is changing: large/small organisations, SaaS subscription... The trend at most companies to centralise purchases is driving the purchasing department to take on this new approach. But it also puts the purchasing department in direct contact with the market and its evolutions, and can become the number one source of information on innovation in the sector for the rest of the company.

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CHALLENGE #7 - PROCESS IMPROVEMENT

This is not new to purchasing managers. However, digitalisation brings new opportunities, especially in Source-to-Pay or supplier reference management. For instance, digitalisation allows intelligent recording of the data to be integrated, or immediate access to all the elements of the transaction.

Automated Procurement-to-Pay and expense analytics accessible through a data-assistant capable of answering questions also represent a major innovation for procurement. Real-time and accurate decision making is a huge advantage for purchasing departments!

>> Discover askR.ai, the head of procurement data-assistant <<

 

Head of Procurement: costs that AI will bring down.

52% of Purchasing Managers list savings as the main performance indicator for their teams * 

Even if we are increasingly looking for improved performance indicators, savings remain an essential KPI in a company's overall cost strategy. The hunt for useless expenses is the main challenge for the purchasing team, always looking for a way to improve savings in processes, negotiations, indirect purchases, etc. 

► To which extent will new technologies related to machine learning and AI impact this goal? What are the practical solutions?

AI to improve supplier risk monitoring.

Suppliers are the primary contacts for the purchasing department. It is with them that a long-term relationship of trust must be created, while at the same time taking advantage of competition and deadlines. AI will put analytical power at the service of the relationship by helping determine whether the supplier will be able to fulfil its order or not. And if there is any reason to be concerned about quality by cross-checking with external sources of information, or if there is an inconsistency between the company's CSR commitment and a change in the production line.

Thanks to AI, it is also possible to identify potential fraudulent invoices, greatly reducing the duration of a malfunction.

AI to improve supplier risk monitoring.

"AI provides between 5% to 40% additional savings through spend and supplier pool analysis.“

"AI provides between 5% to 40% additional savings through spend and supplier pool analysis.“ says Xavier Laurent, former Manutan IT Director. Using reconciliation and prediction algorithms can help buyers' decision making by securing and streamlining expenses.

How does this work? AI will help identify the most important areas for optimisation, as it is able to help classify very diverse information from unstructured data, such as PDFs for example. 

The time saved is considerable, with an additional 5% to 40% savings due to these refined analyses! 

AI for instant purchase information

It should be known that 53% of purchasing managers identify better data accessibility, coupled with analytical capabilities, as the first driver for improving their performance. Launching an AI project always involves prior work on the data: scrubbing, structuring...

The data is therefore better managed, and more accessible thanks to the instantaneous computing power of AI! At Technicolor, Cédric Le Savéant VP, Digital Office - Sourcing & Supply Chain Transformation has set up a data-assistant in the Purchasing department to answer questions from operational staff about supplier expenditure. For him, the interest was " the immediate, precise and simple nature of a 24/7 response”.

Based on a part of AI called NLP, (Natural Language Processing) this assistant generates complex queries on the go that would take hours for teams. 

Many opportunities exist: immediacy, analysis capacity, risk prediction... Now it is time to see if the companies specialised on the purchasing software market will quickly integrate this kind of innovation into their product or if new competitors will come and change the rules!