'Find a friendly stakeholder' to test indirects tech

10 May 2018

Procurement is still uncertain about how technology will change the way services and indirects are bought, a survey has found.

The survey of 160 buyers indicated a lack of knowledge was the biggest barrier to using technology in indirects. A large number of respondents reported they were either unfamiliar with tools including including AI, crowdsourcing and procurement-as-a-service, or were simply not planning to use them.

It also found buyers were cautious about the impact of technology. More than a quarter (28.7%) said they felt AI would have a negative impact on procurement over the next five years, and roughly the same proportion (24.5%) believed the same about blockchain.

Conducted by B2B marketplace Maistro in partnership with Supply Management Insider, the survey found buyers were happy with tried and tested procurement methods, despite complaints about lack of innovation in the supply chain.

Approved vendor lists were seen as the most effective procurement tool (55% rated them excellent or good), but only just over a third (35%) reported being satisfied or very satisfied with the innovation provided by their supply chain.

Mark O’Shea, chief technology officer at Maistro, said this indicated buyers do not always have the same measure of effectiveness as stakeholders.

Speaking to SM, he said: “[Buyers] ranked their prefered suppliers list as effective because it saves them time. That is effective, but it’s a different question if you ask about innovation – it doesn’t guarantee that.”

Sandra Chavasse, head of marketing and communications at Maistro, said indirect spend was often overlooked because, as a category, the value of spend is low. However, the survey found procurement teams were spending up to a day a week researching, vetting and shortlisting suppliers. This was time that could be used for more strategic work.

“There’s still a lack of awareness of what many of these technologies can provide,” she said.

Chavasse added the large number of niche technology providers was a stumbling block. “Before it was a fear of technology coming to take my job, that seems to be softening a little bit. Now it’s fear of technology because of the flood of niche solutions that are out there.”

She suggested buyers who want to implement technology but are unsure of the best way to do so should start small.

“The procurement professionals that work with us, they’re not risk averse, they’re open to doing internal business cases to help them sell in these new solutions, and they’re comfortable exploring,” she said.

“Just start small. If you’re uncomfortable and want to see how [these technologies] work consider developing a business case within targeted spend in the first instance. Find a friendly stakeholder, and internal buyer, and try it.”

O’Shea added that no one likes doing the grunt work of procurement. “Taking away that burden and introducing technologies and tools to help and let people work on things they find interesting to do, that’s where I see a lot of positive results with engagement with our customers,” he said.

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