These are two prominent findings from Keelvar’s second annual Voices of Sourcing survey. But when it comes to bringing this kind of technology into your business, where do you start? And what’s the role of ‘autonomous sourcing"—so often referred to alongside automation—in its delivery?
Magnus Bergfors, procurement technology analyst-turned Director of Product Marketing at Keelvar, offers this simple beginners' guide.
First, let’s clearly define ‘autonomous sourcing’.
Autonomous Sourcing refers to self-service, automated procurement workflows, typically for tactical and tail spend. A central buyers’ desk for unanticipated shipments, or a portal for component rate requests for engineers, perhaps.
As business teams submit these requests, autonomous sourcing bots intelligently automate the manual tasks that are needed to execute them, such as supplier selection and award analysis. Your sourcing team simply approves the bots’ work and makes the final award decision.
I could write an entire blog on just how autonomous sourcing, when combined with sourcing optimization like Keelvar's, is empowering entire organizations to source like experts.
More bidders and competition for lower-value spend and cost savings, combined with automated processes, can improve governance and free up time for the true sourcing experts to focus on strategy.
The key to automation is to start simple.
Autonomous sourcing can be applied to a wide range of spend categories and complexities, but the best place to start is with the low-hanging fruit: high-frequency, low-value events that adhere to consistent, repeatable processes.
‘I need a box for something that is this big’ is a great example.
Keelvar’s bots already automate 6,000 packaging events per year for one food and beverage company, and 93% of tasks for ocean freight mini tenders for a global manufacturer. They could do the same for your business.
That’s not to say you can’t automate more complex spend using Keelvar’s technology, but the approval processes and acceptance criteria become more nuanced. So, if it’s your first-time using automation, start small and earmark sourcing for items like ‘marketing services’ for your long-term automation strategy.
Build trust in the bots.
‘Approval’ is the key word here, and to realize the long-term, you need confidence in the technology and to experience its value first-hand. You also need to know that Autonomous Sourcing doesn’t set out to replace humans; the bots simply extend their expertise. They check in as much as you want them to.
Start by automating what you know how to do, such as non-strategic tasks that don't need the time and attention of professionals. Time that they will be glad to get back.
You can build in as many approval steps as you need, and then, as your confidence in autonomous sourcing grows, reduce the approvals to the critical decisions (such as the award).
As an added bonus, you will be reducing burnout, and your team will have more time to unlock value from more categories of strategic spend. The type of spend that will always need expert human reasoning.
Manage more data.
Many industries have waxed lyrical for years about the importance of big data, often without knowing what they’re going to do with it. Well, the autonomous sourcing use case is real, and should be a significant component of your digital transformation narrative.
Automation is most effective when you have voluminous data sets that are readily accessible. I’m talking more line items from more suppliers in a centralized location.
Consider this simple formula:
More sourcing data = even smarter bots = even better award decisions by your teams.
If you’re not already using sourcing optimization and centralizing your specialist sourcing data, I strongly advise you consider doing so. It is critical not only for maximizing the value of this technology, but also for futureproofing your procurement strategy.
Understand what autonomous sourcing isn't.
Last tip. You’ve probably heard this term often over the last couple of years. But sourcing is complex given the huge differences between companies, industries, and categories. This means that a "black box," "one size fits all" approach is never going to work. That’s why we allow our customers to custom build their own intelligent bots to fit their requirements and categories.
The best way to understand how autonomous sourcing can drive better outcomes for more types of spend in just a matter of weeks is to have a chat with one of our experts today.
You won’t regret taking this important first step on your automation journey.