Understanding spend data – is it really important?
For procurement teams to make good strategic decisions and to have credibility within the business, they need to have procurement system that will provide on-demand, accurate spend data. In the past this has been a major challenge for Procurement teams due to the scale and complexity of the data sets and the time and effort required to extract and consolidate.
Most Organisations have multiple siloed divisions, across several locations and countries, each leveraging a different ERP systems or data warehouse. On top of this they will typically transact thousands of purchases a month, across hundreds of suppliers and categories, totalling millions of Dollars.
These challenges mean the task is rarely completed or the data becomes old and irrelevant before completion. With good spend visibility, Procurement can identify opportunities and talk to the business with accurate data and real insight rather than gut feel.
It allows them to be more holistic in their thinking and to apply the full range of sourcing levers within their armoury including but not limited to; supplier consolidation, compliance management, tail spend management and SRM. Visibility of spend is a basic requirement for Procurement to be effective at that job. Without it they are simply a reactive transactional function.
Leading practice procurement functions are delivering true bottom line savings and double-digit ROI because they understand their spend profile and use this to design and build a value targeted procurement operating model underpinned by the latest AI enabled technology.
The standard Procurement operating model is changing shape as Procurement leaders use AI enabled software and technology enhancements to automate traditionally manual procurement processes e.g. analytics and sourcing, to improve efficiency, speed to market and the motivation of the team to better serve the needs of their internal customers. Be the AI champion in your Procurement Organisation.
How to focus a procurement team’s efforts.
Procurement leaders are expecting data transparency to be one of the main benefits of the digital transformation agenda. The visualisation of accurate supply chain data is the first critical step a Procurement function needs to achieve if they are to identify and focus on the areas that will deliver true bottom line value to the business.
Procurement chiefs need to align with the overarching business strategy and have a clear view on how Procurement will use the new clean data so they can focus their team’s structure, time and effort. Robobai has built a suite of AI enabled applications built to support procurement functions across the source to contract process from identification of Savings Opportunities, Management of Supply Chain Risk (including financial and reputational) Contract Lifecycle Management and Contract Compliance.
The procurement system, with data accuracy and interactive dashboards, enables Procurement teams to review their spend data and set focused achievable targets which in the past were often plucked out of thin air or simply based on last year’s performance.
To support target setting AI robots are trained to look holistically across the data sets to identify key procurement tactics / levers to reduce costs and improve spend management including; Payment terms, supplier consolidation, price variance, payment duplication, price reduction, SRM. In most organisations the visualisation of data is performed manually by either data analysts or category managers, and often on short supplier generated data sets.
The key difference with Robobai is that the AI robots move across all enterprise spend data sets and categories providing a holisitic set of prioritised insights in a user friendly, value ease matrix that the CPO can use to plan the efforts of their team to deliver the key objectives.
Embracing Technology in Procurement
AI in procurement has evolved significantly over the past 12 months, however it will only ever be as good as the team that laid the foundations. The success of a analytical procurement system will live and die by its ability to uphold the accuracy of the spend data over time.
The Robobai AI brain that sits within the procurement system has been trained with over AUD $65 Bn dollars of spend data across multiple industries sectors. It uses PO, AP, Vendor Master, free text and GL data and auto-classifies to a granular level using UNSPSC or a customer bespoke taxonomy.
Once the data has been provided by the customer, the AI classification process takes a matter of hours. The procurement and technology experts that have trained the AI at Robobai have developed a unique platform that has been designed to support strategic procurement teams, by providing a SaaS platform that gives them credible information for their discussions with key stakeholders within the business.
CPO’s now know more about their business than the budget holders. CPO’s have never had access to such a comprehensive AI enabled platform that gives visibility to accurate spend, links to 3rd party data, provides risk insights, houses supplier contracts, measures compliance and find savings. This procurement system is not just a set of pretty dashboards.
It also has predictive capability that provides saving insights and removes the need for the procurement team to spend hours analysing. Robobai’s AI robots have been trained to find savings opportunities across all categories. The platform currently has 14 AI robots and growing – trained to find insights such as payment terms, price variance, supplier reduction, price reduction and freight.
The Robobai platform is fast becoming the market leading procurement system as it can be implemented at our clients in a matter of weeks, gives access to innovative Procurement applications with high ROI and is competitively priced. From receipt of customer data, Robobai can have customers visualising their data within days. It’s all about the magic of the AI and the AUD $65 BN of spend that has been used to train the AI. robobai.com
One of 6 big issues facing procurement directors in 2019
Modern Slavery & Whistleblower laws Modern Slavery reforms were passed at the end of 2018.
Whistle-blower protection legislation has also gone through the Senate and is likely to be passed in the first sitting of 2019.
Finally, governments are establishing legislation to ensure that corporations are conducting themselves in a correct and ethical manner and are finally echoing the values of their customers and shareholder.
We can expect to see more of this kind of debate and more proposals about how corporates conduct themselves and whether they really match up and live up to the expectations of the community.
Robobai has teamed up with FRDM and developed a solution to identify slavery within each step of the supply chain.