edward o’donnell the digital procurement process relationship management accessing this data...
TRANSCRIPT
Edward O’Donnell
The Digital Procurement Process
How the Integration of Data and Analytics is Revolutionizing the End-to-end & Cognitive Procurement Process
IBM Procurement Data Officer
Please Note:
• IBM’s statements regarding its plans, directions, and intent are subject to change or withdrawal without notice at IBM’s sole discretion.
• Information regarding potential future products is intended to outline our general product direction and it should not be relied on in making a purchasing decision.
• The information mentioned regarding potential future products is not a commitment, promise, or legal obligation to deliver any material, code or functionality. Information about potential future products may not be incorporated into any contract.
• The development, release, and timing of any future features or functionality described for our products remains at our sole discretion.
• Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon many factors, including considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve results similar to those stated here.
The Digitization of Procurement
Procurement functions are a rich
source of data
740KPurchase Orders
2MInvoices
14KSuppliers Managed
148KActive Contracts
$50B Spend Managed
22K Sourcing
Events
IBM Procurement
Cost Management
Contract Management
Supply Chain Risk & Social
Responsibility
Supplier Selection
Material and Labor Sourcing
Supplier Relationship Management
Accessing this data
unlocks benefits
Innovation
Quality
Efficiency
Accuracy
Speed
Flexibility
Phase 5
� Behavioral
Influencing
concepts.
Automation & HandsFree ramp upEvolution of IBM Procurement catalog strategy
2003 2008 2010 2011 2012 2013 2015
80%
75%
78.9%79.2%
81%
86.8%
90% +
Percentage of
hands-free orders
Global Catalog Facility
deployement GCF
Phase 1
• Establish e-
commerce &
catalogs as
backbone of order
processing
strategy
Phase 2
� Transition
content
maintenance to
suppliers via
B2B solutions
Phase 3
� Revise strategy
and eliminate
use of Punch
Out catalogs
Phase 4
� Implement
analytics, and
automation to the
data “flood”
Journey
Hands Free Center of
Excellence HFCoE
IBM Procurement – Cognitive Journey Map
5
Blue HoundPricing IQ
Contracting
Supplier risk management
Supplier evaluation & qualification
Supplier IQ
User experience
journey New User Experience
Procurement
Pricing negotiation
Current Solutions in Development
Supplier lifecycle management
Risk Insights
User Experience
� Simple easy engagements completed with speed
� Ability to use natural language, unstructured text &
digital imagery.
� Highly personalized experience that learns over
time
Procurement Experience
� Refined real time data to make quicker more informed
decisions
� Maximizes preferred suppliers
� Tactical and administrative tasks automated to allow a
focus on strategic and relationship management
activities
Deep supplier insight Dynamic pricing info Instant contract analysis Trusted Buying Advisor
Predictive risk mitigation info
Requisition Purchase
Virtual Agent Assistant
Client Transaction Support
The vision
A mobile-enabled, smart,
digital buying assistant which
recommends appropriate &
preferred products &
suppliers to business users
‘on the go’.
The disruption
Allows users to specify their
procurement needs through natural
language, unstructured text & digital
imagery, including active dialogue.
The result: Business utilizes preferred suppliers and users get a
highly personalized experience that learns over time
IBM Catalog
information
Natural
Language
Classifier
Speech to Text
Trusted
Buying
Advisor
+ +
Cognitive Procurement Assistant
6Demo link Tool
The vision
Collect and refine real time
comprehensive market
intelligence data to identify
pricing trends by category or
skill and recommend
optimized price points
The disruption
Procurement Professionals
freed from time consuming
research and data aggregation
Internal pricing
trends
External market
intelligenceWatson APIs
The result: Procurement professional equipped with enhanced
pricing knowledge for improved negotiations
Dynamic
Pricing
Information
+ +
Pricing IQ
7
Market Intelligence - market
forces pressuring rates to go
up or down?
� Services value added (% of
GDP) in short term?
� Investments in IT?
� GDP growth according to
capacity?
� Demand inflation for price
increase?
� Inflation rate?
� Interest rate?
� Currency exchange rate?
� Unemployment %?
� Minimum wages?
� Employment in technology
sectors and knowledge-
intensive service sectors?
Demo link
Pricing IQ - Market Intelligence Advisor (MIA)
8
Agile Development with Progressive Enhancements
Crawl Walk Run
• Start with Category with
strong taxonomy
• Good market insight and
benchmarking data
• Technical Services
• Large spend/strategic
category
• Connect pricing data with
market benchmarks
• Leverage data to identify
trends in pricing – new
insights in context of historical
spending and market
sentiment/price
• Use trends to start building
predictive model
• Correlate predictive pricing
with macro data points and
indexes
• Infuse cognition – a smart
pricing system
• Predictive pricing leveraged
to secure competitive
advantage
• Optimal time to buy
• Deploy across broader set of
categories across the
portfolio
• Trusted buying advisor for
Category and Sourcing
teams
9
Predicting
Risk with
Certainty
The vision
Monitor natural, social, and
economic supply chain
disruptions to make fast
informed decisions in the
most critical situations when
every minute counts.
The disruption
Hyper-localized insights that are now
built into supply chain models
.
The result: Cognitive event monitoring that saves time and money
focusing efforts on true impacts to your supply chain
Supply chain
operational data
The Weather Company
Local events+ + Watson APIs
IBM Supply Chain Risk Insights
10
The vision
Accelerate contract analysis
by identifying clause
similarities and deviations
from IBM standards
The disruption
This solution manages large
volumes of unstructured written
data with leading-edge Watson
technology
The result: Maximize T&C’s to IBM’s benefit, and reduce overall risk
Differing contract
language
Natural Language
Classifier
Ontology
builder
Instant
Contract
Analysis
+ +
Demo link
Procurement Agreement Risk Manager (Bluehound)
11
Virtual Agent Project for Internal Help Desks
Business objective
� Reduce operational cost by driving to intelligent self service
channels
Approach
� Cognitive Chat Agent that can identify issues and drive to
resolution
Delivery - In Process
� Early stage engagement for internal end user help desk
Opportunity
� Once core components are working leverage for other
internal and external channel.
12
Watson Analytics in Procurement
Key Values
Predictive and Prescriptive
Analytics
Customized Reporting
Real-Time Data
Maintenance
Common use cases
Payment Term
Analysis
Payment Term
Analysis
Compliance
Analytics
Compliance
Analytics
Master Data Management
Analysis
Master Data Management
Analysis
Transaction Automation
Analysis
Transaction Automation
Analysis
Risk and Fraud
Analytics
Risk and Fraud
Analytics
14