At Zycus Horizon, I participated in two panel discussions, one as a “pinch hitter” and the other with some up-front planning.
One centered on the impact of robotic process automation (RPA) and artificial intelligence on the future of procurement technology and the procurement function, while also tying in cloud, blockchain, the internet of things (IoT) and other disruptive technology areas. The other panel touched on these topics but emphasized the future of the user experience in procurement technology. I also gave a breakout session specifically on procure-to-pay trends (and, you guessed it, innovative and disruptive technology).
I won’t attempt to summarize the whirlwind of discussion from the two panels (however, at least besides me, Zycus did a good job bringing together some sharp people on the subjects). But I will briefly define a few of the key disruptive technologies we discussed and offer some use cases for procurement, leveraging materials from my breakout session and learnings from the other panelists, as well.
As we define and others have defined it, blockchain is a shared digital ledger across multiple parties (whose system administrators may or may not know each other) with a continually updated list of all transactions which have occurred both recently and in the past. This decentralized ledger is a distributed database that keeps a record of each transaction that occurs across a fully distributed or peer-to-peer network. It is a system of trust — between parties — and does not have a centralized “hub.”
Blockchain matters for procurement because it will enable decentralized control over complex P2P scenarios, create programmable “smart contracts” that launch certain activities (e.g., payment) in a touchless manner when specific criteria are met, and improve supply chain and transaction traceability, provenance and authentication.
Robotic Process Automation (RPA) and Artificial Intelligence (AI)
Others have defined a robot as a machine (especially one programmable by a computer) capable of carrying out a complex series of actions, often consecutively. When the robot automatically learns from these actions, it crosses the AI threshold. Of course, you can have AI without RPA, as well, something we have seen in spend classification, early chatbots and other early AI use cases in procurement such as guided supply market and sourcing recommendations.
Collectively, these areas matter for procurement because companies (whether they know what is embedded in solutions or not) will increasingly leverage robotics, AI and machine learning to gain productivity by enabling and automating both simple and complex source-to-pay scenarios, eliminating the need for human resources to make decisions and to drive continuous system tweaking and customization.
Software-as-a-service (SaaS) is only one element of cloud. As we and others have defined it, the cloud represents all of internet-based computing that provides shared computer processing resources and data to computers and other devices on-demand, including infrastructure (IaaS), software (SaaS) and platforms (PaaS). On a foundational level, the cloud matters because enterprises will continue migrating from on-premise to the cloud even for core financials. (Many analysts who are experts in ERP believe this trend will accelerate, even among larger companies.)
In addition, PaaS will continue gaining traction in the years to come, and software vendors will increasingly take advantage of Amazon (AWS), Microsoft (Azure) and Google’s virtualized stack and infrastructure capabilities. AI-as-a-service rather than AI-as-a-science project? You bet. It’s coming.
Stay tuned as our coverage from Zycus Horizon continues.