Will You Get a Sourcing Automation “Story” or Reality?

Jennifer Sikora

April 6, 2021

A few of my Millennial friends get together at the beginning of each year to create literal “vision boards” for goals they want to achieve and changes they want to make over the next 12 months. They paste collages of photos, drawings, and encouraging quotes onto sturdy cardboard posters and make notes on them. My Gen X approach to life always found the exercise amusing, quietly thinking to myself, “just develop a plan and do it.” But I get that this could be a fun activity to do with a group.

On the vision board for Procurement, intelligent automation is undeniably going to be one of the next major drivers of efficiency and savings. Today, 50% of work activities are technically automatable by available technologies, according to McKinsey Global Institute. Keelvar’s customers that use our intelligent sourcing bots to free up human workloads on repetitive complex tasks are already seeing measurable ROI. Notably, such intelligent automation wouldn’t be possible without Keelvar’s underlying sourcing optimization capabilities, so here’s a quick retrospective... 

Similar to how procurement automation is emerging now, sourcing optimization was the next big transformative advancement 20 years ago. The first wave of products and custom solutions built for sourcing optimization in the early 2000s took e-sourcing beyond your basic e-auctions; they allowed for improved bid data collection encompassing price and non-price attributes across suppliers, enabled more flexibility in analyzing constraint-based award outcome scenarios, and drove great efficiencies and better savings outcomes for buying organizations. And those products today continue to deliver optimization benefits, whether as stand-alone solutions or as part of a larger suite.

Many of the tasks improved and even created by optimization are ripe for automation. Put another way, optimization and automation are two sides of the same coin when it comes to sourcing excellence. It’s okay for a robotic vacuum cleaner to be suboptimal and behave somewhat aimlessly; such inefficiencies have little to no meaningful impact. But nobody wants sourcing bots to be wasting resources at scale, especially from the suppliers’ perspective, for example, as bots take on the workload of supplier selection and bid collection. The goal is to create efficiencies and savings while maintaining a level of standard. 

Naturally it will be expected that the providers of those first-generation sourcing optimization solutions -- products now residing within Coupa and JAGGAER -- have something to say about automation and, beyond the story, whether they are pursuing a clear product or partnering plan. Even large consulting companies are getting in on the narrative. But is this another “vision board” or something concrete?

Indeed, what they and other sourcing optimization solution providers have now are “thought leadership” pieces of content such as web/blog pages, white papers, and webinars that tell the bigger picture about how automation will affect procurement and strategic sourcing, without any specifics on how that relates to their sourcing offering today, or in the next 12 months. They may generically depict and describe the Levels of Automation, showing the journey from Assisted to Conditional to Partial to High automation levels. Keelvar by the way is supporting level-four High Automation for customers today. 

And let’s keep in mind that not all automation is created equal; some will tout Robotic Process Automation (see our CEO’s blog post about RPA: “That’s not a bot. This is a bot.”), and others may define automation even more broadly.

So to help you separate an automation vision board from reality, here are 5 initial questions we recommend you ask your sourcing solution provider:

  1. What type of automation is being applied, robotic process automation (RPA) that records mouse and keyboard actions, or AI-enabled intelligent automation? 
  2. Does your automation solution understand what is going on and what the data means, i.e. is there a semantic model and taxonomies with structured data that are tagged?
  3. How does the automation look and feel from the suppliers’ experience? 
  4. How much customization is needed to get started?
  5. What’s next for the automation roadmap and the timeframe? What integrations are being built or planned that allow for intelligent triggering?

To the credit of Procurement teams, their very nature is to make smart supplier evaluation and award decisions, so no doubt a story won’t be enough without tangible details that back it up. 

Otherwise, it all feels very much like the vision board exercise: Let’s compile some great content, stats, and infographics and wrap a strong narrative around the aspiration. Sure, it’s an excellent start, but until you are taking actual, firm steps towards reaching those goals, it’s just a sophisticated collage.

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