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FIVE THINGS EVERY PROCUREMENT PROFESSIONAL SHOULD KNOW BEFORE CHOOSING AN EPROCUREMENT SOLUTION

By Daniel Ball, Business Development Director at Wax Digital

 

Effective procurement is becoming increasingly important to most businesses. Ever since the 2008 financial crash, organisations have tried to cut costs where they can; with better buying consistently being leveraged as an essential part of the cost-saving strategy. Yet, businesses can easily spend more than two-thirds of their revenue on indirect and direct procurement, from office supplies to paying other third-party vendors, it doesn’t take much for these costs to add up.

To increase visibility and reduce maverick spending, eProcurement software is helping many organisations gain control of business-wide spending. This has been especially prevalent since the impacts of COVID-19 has forced businesses to review costs and diversify their supply chains. To ensure success, procurement professionals need to think carefully about building a more efficient procurement process with technology at its core – here are five considerations:

 

  1. Turn to the cloud

Digital transformation has fundamentally changed our relationship with technology and businesses that opt for a solution that doesn’t leverage the cloud will be at a considerable disadvantage. Not only is cloud technology cheaper than on-premise solutions but it means that employees can go online and work anywhere and at any time. Additionally, all the cloud is updated and maintained centrally by the solution provider.

 

  1. Automation of manual processes

Automating routine tasks is an important part of any eProcurement solution as this can help boost productivity, improve data accuracy and result in significant time savings. Tasks that should be automated include:

  • Workflows to make sure purchase orders are distributed to relevant parties when requisitions are raised.
  • Approvals sent to relevant stakeholders when purchase orders need to be invoiced, avoiding the need for data entry.
  • Automated matching of invoices to purchase orders.

 

  1. Improve data visibility

Professionals often spend a large amount of time using programmes such as Excel to compile formulas and charts to present and manage their data. An eProcurement tool can help simplify this – information is nicely packaged and ready to consume at a glance. It will also help visualise where the spend is going while tracking and identifying problematic areas. Its monitoring capabilities should include:

  • A real-time view of the goods and services the business is currently spending its money on. This shows if the buying process is operating successfully.
  • A broken-down view of departmental spending. Businesses can see who is spending, and what they’re buying.
  • Historical data that can help identify spending trends and be used to spot potential spot saving opportunities.

 

  1. Only best-of-breed will do

A top-class eProcurement system that can integrate with other systems more easily will give the business more choice and flexibility. While there are some good ERP-based solutions, a dedicated eProcurement solution offers far more functionality and is typically much easier to use.

 

  1. Integration with other systems is key

Any eProcurement solution provider must be able to demonstrate proof they can integrate with a range of ERP systems including Microsoft Dynamics, SunSystems and Sage. Also, it’s important to consider solutions that can integrate with tools from other departments such as finance. Software with pre-packaged integration technology can be deployed quickly and be tailored to link all systems.

There are many benefits to using an eProcurement system. Not only will it help reduce costs and effectively manage business spend, it can also help save the time normally associated with manual tasks, enabling employees to focus on more important tasks that deliver value to the business.

 

Technology

USING ARTIFICIAL INTELLIGENCE TO ACHIEVE CIRCULAR ECONOMY

By Professor Terence Tse, ESCP Business School

 

It is really only a matter of time before the two main trends, artificial intelligence (AI) and circular economy, would come together. A milestone of this convergence was the white paper “Artificial intelligence and the circular economy”: AI as a tool to accelerate the transition, jointly published by The Ellen MacArthur Foundation and Google earlier this year. It has kick-started the discussion on how AI can be used as a tool to help accelerate and scale our transition to a circular economy. This can be achieved by unlocking new opportunities through improving product and material design, enhancing circularity-based business models, and optimising circular infrastructure. The paper draws on the food and consumer electronics industries to illustrate the circular benefits driven by AI. The forecasted value that can emerge from these is encouraging: up to $127 billion and $90 billion a year in 2030, respectively.

 

The pace will be slow

No doubt these are very good news. It also shows how innovative technologies can take circular economy to the next level. Yet, I believe the path leading there will be full of challenges, not least because, contrary to what general media would like to get us to believe, the development of AI is, in reality, really slow.

 

There are several reasons attributable to this sluggish pace

First, there is a general shortage of AI-proficient graduates. Training up AI researchers takes time. Universities are not churning out data scientists fast enough to meet the job market demand. For those who are graduating, they will most likely be snapped up by the technology giants. Indeed, it has been estimated that some 60% of AI talent are in the employment of technology and financial services companies, leading to a ‘brain drain’ in academia, which in turn, slows down the production of qualified graduates. Small circular economy-based companies (as well as AI start-ups) will struggle to have the same hiring power, as they often lack the ability to match the levels of salaries and prestige offered by large organisations.

Another reason why circular economy-aimed companies, large or small, will struggle to deploy AI is that the technology remains a very expensive investment. AI is, at the moment, far from a plug-and-play technology. Arguably, there are off-the-shelf AI applications available in the market. But what this one size fits-all technology solutions can really do is often very limited and their effectiveness low. Inevitably, for AI to work at an acceptable, value-creating level, it is necessary to integrate it into the existing wider IT system. Customising AI applications to be embedded in the system architecture is very complex and hence very costly.

To make matters worse, the market is seemingly inundated with self-proclaimed AI companies. A recent report has suggested that 40 percent of start-ups in Europe that are classified as AI companies do not actually use artificial intelligence technologies in a way that is “material” to their businesses. As someone who researches and works in the business of AI, I can readily observe this phenomenon has already eroded the trust of many companies, making them increasingly cautious when proceeding with investment and deployment of AI.

 

Gradual developments, not quantum jump

For these reasons above, the adoption of AI, and by extension, in the area of circular economy, will be slow. This, however, does not mean there will be no advancement. Instead of “big bang” new business model creations, AI will most likely produce circular advantages through baby steps in operational enhancement gradually. For instance, one of the important elements in achieving circular economy is better asset management. In a recent research project for the European Defence Agency, my colleagues and I have discovered that there is a wide spectrum of operations for ministries of defence to save money and practise circular economy, from refurbishing and repurposing small military equipment items to reduce waste and minimise the use of virgin materials to extending the service years of capital assets. Unquestionably, the same may be applied to civilian activities. For example, combining the power of AI and drones can extend the longevity of major infrastructure such as reactors and bridges.

Advancements in drone technologies have allowed them to be deployed to take pictures at heights that are dangerous for inspectors to reach. The contributions of AI come from its ability to analyse and identify cracks as well as defects on assets that are not always visible to human eyes from captured images. Consequently, problems are detected before the assets become irreparable, thereby lengthening their lifetime.

A seemingly insignificant but potentially huge possibility of waste reduction would be saving on paper use. In the insurance industry, for instance, there is still a huge reliance on actual paper, with the communications between various stakeholders, including the underwriters, brokers and insured, passing on a large number of physical documents. AI techniques, in particular natural language processing, can help speed up the digitalisation of documents as they can go beyond the point of just reading and processing text to recognising and recording signatures and rubber stamp marks. Little by little, it will be possible to lower paper consumption.

 

The future is now

Both AI and circular economy are by themselves breakthrough ideas that are set to change the world dramatically. Combined, it can be a very powerful force of good. But this can only be achieved if we can synthesise them. For AI and circular economy to work together, it is necessary to educate AI developers to be more familiar with the idea of circular economy as well as making circularity practitioners and researchers more AI-savvy. Holding just half of the equation, we risk missing out on most of the intelligence. After all, no matter how smart machines can be, ultimately, it is the human intelligence – or stupidity – that determines the kind of future that we will be having.

 

Extract of “The AI Republic: Building the Nexus Between Humans and Intelligent Automation”

 

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IS BITCOIN SET TO HAVE A 2017-STYLE MINI BOOM THIS YEAR?

Bitcoin’s price is set to “surge before the end of 2020” with investors keen not to “sleepwalk” through a 2017-style mini-boom, says the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The prediction from Nigel Green, the deVere Group CEO and founder, which has $12bn under advisement, comes as Bitcoin – already one of the best-performing assets this year – appears to be on the brink of a bullish breakout.

In recent days, Square, which is owned by the billionaire founders of Twitter, has allocated 1% of its cash reserves to the cryptocurrency, whilst a former Goldman Sachs hedge fund chief says the price of Bitcoin will jump to $1m in five years.

Mr Green comments: “There’s been something of an avalanche of interest in Bitcoin in recent weeks from household-name investors.

“Investor activity is picking up considerably with various on-chain metrics and ongoing – and heightening – global political, economic and social turbulence suggesting that there will be a price surge before the end of the year.

“Like gold, Bitcoin can be expected to retain its value or even grow in value when other assets fall, therefore enabling investors to reduce their exposure to losses.
“Investors will increase exposure to decentralised, non-sovereign, secure digital currencies, such as Bitcoin, to help shield them from the potential issues in traditional markets”.

He continues: “There’s a growing sense that we’re set to experience a mini-boom similar to that at the end of 2017.

“Prices are yet to catch-up with investor interest – but this is only a matter of time as investors will not want to sleepwalk towards perhaps year-high prices in the run-up to the end of 2020.”

The late 2017 bull run saw the Bitcoin price reach its all-time high of $20,089.

The deVere CEO concludes: “There’s been a notable ramping-up of interest in Bitcoin amongst investors since the end of summer. Indeed, it has been the best performing week for one of the year’s best-performing assets since July.

“I can see no reason why this upward trajectory will not continue between now and the end of the year.”

 

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