As the year draws to a close, it’s an ideal moment to reflect on the transformative impact of AI-driven autonomous sourcing—not only on the bottom line amid continued economic uncertainty but also on people’s lives across the globe. In 2024, organizations that embraced this next-generation technology have achieved incredible results, driving growth and efficiency while delivering tangible, life-changing benefits to individuals and communities.

Driving Speed-to-Market for New Healthcare Treatments

In 2024, Globality helped increase the speed of the clinical development cycle at a €5bn Pharma company, using the power of native-built AI to ensure novel therapies were with patients quicker, giving them new hope for conditions such as auto-immune and other rare diseases.

In healthcare, where every second counts, autonomous sourcing has enabled global life sciences companies to scale their procurement operations and uncover new opportunities. For instance, one leading life sciences organization increased the amount of spend competitively sourced by an astonishing 500%—and did so without needing to add a single new member to its procurement team. By leveraging AI, it optimized workflows, reduced manual effort, and focused on what matters most: delivering innovative solutions to patients worldwide.

Helping Families Through the Cost-of-Living Crisis

Closer to home, AI-driven sourcing is also helping consumers at a more immediate level. As the cost-of-living crisis continues to impact families across Europe, Globality’s platform has enabled one of the continent’s leading grocery retailers to maintain low prices for essential goods. By optimizing supplier selection and negotiating better terms through AI, the company ensured that families could afford a little more during the holidays—whether it’s a special meal or gifts for loved ones.

This highlights how procurement, when powered by advanced technology, extends far beyond the back office. By reducing costs and increasing efficiency, businesses can reinvest savings into keeping products affordable, supporting their customers, and delivering greater value when it’s needed most.

Transforming Procurement Operating Models

While these individual successes are powerful, the broader trend is equally transformative. Leading global enterprises have used autonomous sourcing to revolutionize their procurement operating models, empowering teams to do more with less. These organizations have proven that AI can help drive enterprise-wide growth while allowing procurement to evolve into a more strategic, value-adding function.

Consider the following examples of how top organizations are redefining procurement:

• A global life sciences company increased competitively sourced spend by 500% using the same team, demonstrating the power of AI to enhance efficiency without adding headcount.
• A Fortune 500 asset management company automated more than $400 million of spend within just two quarters, freeing up resources to focus on strategic initiatives.
• A leading market retailer leveraged autonomous negotiations to achieve $100 million in savings, unlocking value that could be reinvested elsewhere in the business.
• A top healthcare company empowered its business stakeholders to run over 1,500 sourcing projects autonomously, enabling procurement talent to focus on developing category strategies and strengthening business partnerships.

These examples underscore a critical shift: procurement is no longer just about cost-cutting. It’s about driving measurable business outcomes, increasing speed-to-market, and enhancing collaboration across the enterprise.

A Fair and Transparent Ecosystem

At Globality, our mission has always been clear: to build a fair, transparent, and innovative ecosystem for how companies do business together. In today’s fast-paced and uncertain world, this mission has never been more relevant. AI-driven autonomous sourcing is leveling the playing field, enabling organizations to operate efficiently, unlock savings, and reinvest resources into growth and innovation.

Looking ahead to 2025, we’re excited to build on this momentum and continue supporting businesses in achieving their goals. Whether it’s improving healthcare access, supporting families during economic challenges, or helping enterprises transform their operating models, the potential of autonomous sourcing is limitless.

Join Us on This Mission

The results speak for themselves: AI-driven autonomous sourcing isn’t just a technology upgrade—it’s a strategic enabler that empowers organizations to achieve more with less.

If you’d like to learn more about how Globality can help your business drive savings, streamline procurement, and make a meaningful impact, we invite you to join us on this journey.

Click here to book a demo or here to explore more customer stories and see firsthand how AI-driven sourcing is shaping the Future of Procurement.

AI has been democratized so quickly, already used in so many areas of our lives (it's the only tech that both my parents and my kids adopted at the same time, but that's a story for another day!). It's also become a commodity. GenAI is everywhere these days - from search engines to mobile phone software to music composition tools.

However, just because GenAI is everywhere, doesn’t necessarily mean it’s always welcome, or indeed working well, everywhere. Corporate procurement is a notable exception. Procurement is unique because it’s a complex, intensive process whose decisions not only impact the bottom line but can also determine success. Enhancing procurement with AI helps companies identify their best-fit suppliers, even in historically hard-to-procure spend areas that are complex and high-value. Because these areas have also been the hardest for machines to understand, they’ve been the most challenging to automate and optimize, relying exclusively on humans to handle.

At last, that’s changing. Procurement specialists no longer need to spend hours or days writing long, detailed briefs that cover every possible sourcing scenario. Now, they can “partner” with an AI agent, trained over many years by procurement experts, to receive a personalized sourcing journey with instant access to all the information and insights they need.

This is game-changing. No matter the company, bidding for complex services requires teams to articulate their needs through lengthy RFPs. The complexity and detail of these documents make it difficult to fairly and accurately evaluate and compare vendors' solutions, proposals, pricing, and specific requirements such as diversity, sustainability, and cultural fit. 

Using AI Agents to Increase Your Impact Across the Business

Doing this work repeatedly, at scale, is a big ask for procurement teams. That’s why being able to actually “converse” about every aspect of a brief with systems that have infinite amounts of patience, vast recall, and meticulous attention to detail is a real step change. Effectively these systems act as informed colleagues who read all the information for you, synthesizing them in seconds to give fast answers, and generating ideal responses to the market that are compliant with all your company policies.

Procurement teams can now convey “complex intent” at different stages of the buying journey, using AI to extract project information from existing documents and performing scoping interviews using natural, conversational language. This enables them to define what they need quickly and easily to avoid overbuying, manage demand, and save time on every sourcing event.

Adobe's Chief Strategy Officer and closely followed AI trend watcher Scott Belsky has been writing about how AI agents will streamline and optimize operating models to increase efficiencies and productivity.

As he writes, “Rather than hire out teams of specialists for every function, companies will have the opportunity to purchase AI capabilities—often in the form of agent-based tools or ‘AI teammates’—that (or is it who?) automate parts of a process or entire workflows within individual functions.”

Having such a partner not only saves considerable time but also helps business users achieve much better outcomes than trying to do all this on their own. Why? Because dedicated AI-teammates such as Globality’s agent Glo, built from the ground up for nearly a decade, can draw on massive bodies of accumulated knowledge and intelligence from millions of buyer and seller transactions.

Crucially, the ultimate decision-making remains with the carbon and not silicon-based side of the partnership. Whether or not we are truly heading for Gartner’s vision of a world where machines increasingly buy from machines, and where, by as soon as 2030, 15-20% of your revenue will come from selling directly to such non-human customers, I believe a large part of B2B procurement will increasingly be driven and orchestrated by human experts working in productive partnerships with AI agents.

Adopt the Power AI to Reap the Benefits

By partnering with this new class of AI agents, buyers will not only work smarter, but they’ll also enhance their reputation across the enterprise. Implementing data-driven processes that identify the best providers, proposals, and outcomes will lead to improved business metrics, enabling procurement to add more strategic value and help drive new growth. As the effectiveness of these processes becomes more visible, increasing numbers of stakeholders, including those who typically avoid procurement, will become engaged, bringing more spend under management.

However, it’s important to emphasize that unlike other areas, in complex sourcing we’re not yet talking about machine-to-machine-only transactions. Complex purchasing decisions always involve relationships; buyers and sellers need to feel confident and trust each other. Partnering with AI automates low-value repetitive, manual tasks, allowing you to focus on more strategic work such as supplier collaboration, scenario planning and becoming a true partner to the business. Relationships (internal and external) will always be crucial in procurement, and these will continue to be managed and led by people, while AI agents do the background work.

Be Bold and Stand Out From the Crowd

So, my advice to procurement professionals is this: just as you continually develop and nurture your partnerships with colleagues, focus on how to best partner with AI. Consider the types of guidance, instructions, and prompts you can develop to unleash AI’s potential within your organization. Strive to create an impact that is unparalleled and uniquely tailored to you, your company, your creativity, and your proprietary data.

This approach is both the most creative and value-adding strategy you can adopt for using AI agents to help better manage all your company spend, as well as for your personal career development, marking you out as a forward-thinking procurement leader who wants to move the profession from tactical back-office function to strategic driver of growth at heart of the business.

Click here to learn more about how Globality's AI-driven autonomous sourcing platform automates routine tasks and enables procurement teams to focus on more strategic tasks

Can an AI Agent achieve $15M in savings in just one hour? This may sound too good to be true, but it's exactly what happened today when we launched the latest version of our automated negotiation tool. After receiving multiple proposals and setting up an automated negotiation session, Glo, our AI agent, delivered an impressive $15M in savings on a single project for a leading G2000 customer of ours.

Of course, outcomes like this depend on the size and scope of the sourcing event, but it’s a prime example of how Glo drives significant savings by emulating human behavior and decision-making.  

Inspired by the techniques of real negotiation specialists, such as multi-round bidding strategies, price pressure dynamics, and data-driven proposal evaluations, our goal was to replicate their results but autonomously and at scale. That’s exactly what Glo accomplished: an unsupervised negotiation delivering results on a par with, or above, those of an expert human negotiator.

And the most exciting thing is, this is just the beginning. Since proposals are inherently language-based, Glo excels at understanding sourcing language. The next iteration will incorporate our assessment criteria understanding, contract components, and more. Imagine an AI agent seamlessly managing these complexities and delivering better sourcing outcomes faster and more effectively.  

What’s particularly fascinating (and perhaps even a little controversial) is how people feel about negotiation. For some, negotiation can be seen as a high-pressure, confrontational process, while others see it as an opportunity to strategize and create value. Some thrive on it, while others find it draining. If you're someone who doesn't enjoy negotiating, Glo can handle it for you effortlessly. For those who love negotiation, Glo enhances the process, making it more powerful and efficient.  

This is just the start of an exciting journey in autonomous negotiation AI. Stay tuned – there’s much more to come!

Click here to book a demo and learn more about how Glo can save you millions of dollars in one hour!

John Paterson, former Chief Procurement Officer at IBM, once described the relationship between the CFO and the CPO “the most important relationship that exists or needs to exist within the enterprise.”

Back in 2014, he was absolutely right. He was also right when he acknowledged that this relationship has often been fraught with tension. And, unfortunately, the progress made since then has been minimal.

Why? Because if you’re a CPO, it can be a struggle to always make your voice heard. People recognize that procurement handles various tasks, delivers savings, sources categories, manages risk and compliance and improves supplier costs. However, the CFO often struggles to see these efforts reflected in tangible positive changes on the P&L.

The reality is that the connectivity between budgets and budgeting and procurement—in other words, between FP&A and procurement—is sub-optimized. As a result, if a company sets a $73 million budget for the Chief Marketing Officer (CMO) and procurement helps save $3 million, the CMO will still end up spending the entire $73 million. In an early outsourcing deal, finance essentially said to us, "I'm just tired of procurement telling me how many auctions they ran and how much savings they generated because I never see this in the P&L!"

This also happens because procurement is not brought into the process until the last minute. Procurement should be an enabler to achieve the same or more with a smaller budget, but this often doesn’t happen because the business sees the procurement function as a blocker. A significant portion of procurement's day involves someone coming to them and saying, "I need you to finalize this deal for me; I've already figured it out."

Procurement then asks, "What process did you follow, and what evidence do you have for choosing that supplier?" The response is more often than not along the lines of, "I don't have any, but I'm in a rush—so just do it." Further, even when procurement is involved early in the decision-making process, the loop is not closed with the FP&A budgeting process, allowing value to be re-spent without much rigor or governance.

Finding the metrics that underline your contribution

As it stands, then, there's little reason for the CFO to prioritize this relationship. As John Paterson pointed out years ago, both the CFO and the CPO have the best interests of the business at heart, but they can't always agree on how “best” is operationalized and managed from the beginning of a buying process, through to budget governance.

However, the good news is, there's a way to make the value generated by procurement visible in the P&L and get this relationship back on track. What is needed is a mechanism to finally get some real visibility into spending. If a business needs to generate cost savings, as many do right now, they should reduce the budgets and then involve procurement to ensure that departments like Marketing and IT still get everything they need, but with a 10% lower budget or whatever reduction makes the most sense.

Realistically, that’s only going to happen if we move closer to true zero-based budgeting. This approach involves asking each year what the business needs to achieve and then building the budget from zero, based on what is required to meet those goals.

If we adopted this approach—driven by the AI-powered autonomous sourcing that many of our customers are implementing—procurement and finance would establish a strong and cohesive relationship. For instance, at UK retail giant Tesco, a new “Spend to Invest” plan exemplifies this. Procurement generated £645 million ($823 million) in value, which the CFO then reinvested to enhance pricing power and expand into new countries, regions, and business lines.

And in the case of global investment management leader T. Rowe Price, a new approach to procurement using AI has helped increase the function’s internal visibility and therefore its standing with finance. 

According to its Chief Procurement Officer, Harold Wu, every member of its management are now big supporters of the discipline. As a result, the firm, was able to generate more than $40 million in operational savings. As he says, “If you're able to increase the value, that gets noticed.”

Using AI to create a clear link between cost reduction efforts and increased budget and working capital for your organization? Sounds like a C-suite individual destined for success!

I often get asked where I see things heading, so I wanted to share a few insights based on our experience so far at Globality, building the market-leading AI-driven sourcing platform.

If you are in procurement and wondering what the combination of Procurement + AI will mean for you in the months and years ahead, these five insights will help you navigate the transformation and drive better business outcomes. 

Introduce AI as a partner and an extension of your team. When introducing AI to your procurement organization, show empathy; let your employees know they will get the credit for becoming 10x more capable using AI, while decision-makers and economic buyers who brought AI into the organization benefit from its financial gains.

2. AI Will Evolve Faster Than You Can Imagine; Embrace It
AI is becoming smarter and more accurate at a rapid pace, approaching human-level intelligence in many tasks and already exceeding it in some. Next-generation large language models are reaching PhD-level intelligence, and the intelligence displayed by each generation of models is accelerating. Fueled by the leaps in computing power, especially GPUs, that drive AI performance, AI is advancing beyond the pace predicted by Moore's Law. Rather than fearing these advances, teams who embrace it to enhance their work will gain vital competitive advantage.

3. Agentic Architectures Are Here
AI agents are evolving from simple chatbots to proactive, predictive, and collaborative partners. Agents like Glo don't just converse with users—they act on their behalf. This transition from conversation to action will redefine procurement, making it faster and more efficient, with AI autonomously handling repetitive, manual tasks, enabling procurement teams to focus on higher-value, more strategic work such as building supplier relationships and scenario-planning.

4. Multimodal AI Capabilities Expand Options
As AI models become multimodal, they are able to understand, process, and interact with diverse data types, including text, images, audio, and video. Don’t think only text—think rich media, images, presentations, and far better formats to consume information or present it. Procurement will be able to use AI agents such as Glo to create more accurate scoping briefs from diverse sources such as video calls, meetings, presentations and simple discussions with business stakeholders or colleagues.

Seize the Moment and Embrace AI in Procurement
AI is here, it’s smarter than we can imagine, and it’s going to become exponentially smarter as it shifts from providing insights to taking actions autonomously. As the models themselves become commoditized, success will require an AI-native product that brings specialized knowledge to assist and enhance your team’s work Don’t just add AI to an old application; push the boundaries of what AI can do for your organization. If you are an economic buyer or leader, you will see enormous financial returns by boldly making the leap to showcase how AI can increase efficiencies and productivity across your procurement team. If you are a user, let AI boost your capabilities, accelerate your career, and make you a standout 10x performer. Procurement has a unique opportunity—it is the perfect use case for AI given the different types of work and collaboration across the business involved.

Go win it!

Globality empowers many of the world’s leading companies to optimize their strategic sourcing across all categories. We have done so with a laser-focused emphasis on building a complete sourcing platform with unprecedented levels of usability and intelligence. At the forefront of that experience is Glo, an AI procurement assistant who quickly becomes a trusted team member for procurement professionals and a knowledgeable, respected ally for the finance organization.

We work with customers trying to solve hard problems yet deliver intuitive and easy to use solutions. Sometimes it’s hard to prioritize the feedback and priorities. Not this time. In working with our customers and listening to their feedback, it was clear that the Summer 2024 release would focus on two key areas.

First, companies want to manage more spend in our product so they can experience the benefits we offer across more of their portfolio. They want a single system for all sourcing, whether it be complex strategic projects or simple, yet transactional, tail spend. They want less tactical unmanaged buying and more competitive sourcing to increase transparency and reduce costs.

Second, customers communicated a need to ensure company compliance policies, rules and processes are observed regardless of whether sourcing was driven by the procurement team or business stakeholders. Companies wanted to ensure that for each project the journey was personalized and optimized. For complex projects, they wanted comprehensive scope capture and requirements. For simple projects, they wanted quick and efficient scoping and quoting. Furthermore, they told us that the personalization of these project journeys is not only different for each company, but also varies by category even within a single company.

To start, we introduced a brand-new Line Items feature. Line Items allows users to specify itemized details as part of their project to more accurately capture their intent. Line items can be either physical goods or services, and users can specify quantity and unit of measure. In addition, we significantly enhanced our pricing functionality to be infinitely more robust and flexible. Users can now opt to get itemized pricing, total price or even request a rate card. They can opt for providers to input pricing directly into a pricing table in the application, which can easily be viewed and compared across proposals, or for complex pricing in an external Excel-based pricing template. As always, users can leverage Globality’s library of best-in-class Smart Pricing Templates in order to make informed decisions and ultimately reach savings goals. So, whether it’s a complex RFP, a simple RFQ or requesting a services rate card, Globality easily captures all the suppliers’ prices. And, because we know it’s important to ensure providers can submit proposals quickly, we also enhanced and simplified the supplier experience when submitting their proposals.

Next, we launched Project Workflow to help our customers enforce their own rules and processes for each sourcing event. This new capability complements the existing proposal section library, matching rules and approvals capabilities that allow users to specify and enforce their company policies. Globality administrators can configure which modules in the Project Brief (scope, line items, proposal requirements, pricing requirements) are mandatory, optional, or not applicable. This configuration can be based on any number of parameters such as category, budget, project type and more. As a result, each project now has the optimal level of detail while requiring minimal effort by users.

Lastly, Globality has extended its market-leading AI capabilities delivered through Glo, our powerful procurement AI assistant. With Next-Gen Scoping, Glo understands all the content and context a user provides about a project, including any uploaded files. For each project Glo builds a customized set of scoping questions leveraging both Globality’s proprietary database of project and service offering-specific content, as well as the broader content from Generative AI’s LLM (Large Language Model). The quantity of questions generated is based on the project type, ensuring that for simple projects like RFQs, users have a shorter scoping experience than for more involved projects, like RFPs. Glo automatically answers questions based on the content that the user provides to deliver detailed, comprehensive and relevant responses. For the subset of questions that Glo does not have sufficient detail to answer, Glo will present those questions to users as well as context or tips on what to take into account, enabling users to quickly and knowledgably complete the scoping process. Users can also end scoping at any time or request that Glo asks additional scoping questions.

With these new, enhanced capabilities, our global enterprise customers now only require a single sourcing platform for all their multi-billion company spend. Both sourcing teams and business users can efficiently manage tail spend, personalize project journeys and leverage advanced AI capabilities to save time and improve all outcomes. We thank all our customers for their feedback and passion to innovate with us, driving savings and new efficiencies across their procurement function using Globality.

To truly unlock the value of procurement, CPOs must transcend traditional boundaries and align closely with their counterparts in the C-suite, particularly the CFO, impressing upon them the need to invest in AI-powered digital platforms to drive new efficiencies and cost savings.

However, the challenge lies in securing the necessary funding to implement these technologies, particularly when the benefits of procurement’s initiatives are often realized in other departments’ budgets.

In conversation with Eric Shaver, Managing Partner at Kinsei Partners, on the latest Spend Sessions podcast, I discussed how procurement leaders can obtain the funds they need to invest in game-changing digital technology by better communicating the value that sourcing teams bring to the business.

CPOs face the daunting task of convincing CFOs to allocate funds for procurement technologies that will yield savings across the organization. Eric emphasizes that this conversation needs to shift from a budget request to a strategic discussion about enterprise-wide value. CFOs are focused on optimizing operating cash flow, free cash flow, and ultimately, shareholder value. Therefore, CPOs must frame their technology investments not as procurement tools, but as operational assets that will drive margin improvement and enhance the company’s financial performance.

A critical step for CPOs is to construct a robust business case that resonates with the CFO’s priorities. This involves demonstrating how procurement technology can optimize key financial metrics, such as EBITDA margin and working capital. For example, by reducing indirect spend, CPOs can have a direct impact on SG&A expenses, which in turn improves EBITDA. Similarly, effective procurement strategies can shorten the cash conversion cycle, freeing up capital that can be reinvested in the business.

Eric suggests that CPOs should leverage financial modeling to highlight the projected impact of these technologies on the company’s bottom line. It’s not enough to be conservative—CPOs must present the most accurate and comprehensive case possible, including all potential savings and efficiencies. In doing so, they demonstrate that their initiatives are not just cost centers but are strategic investments that contribute to the company’s overall financial health.

Artificial Intelligence (AI) is a game-changer in the procurement space, offering unprecedented opportunities to optimize sourcing, improve supplier negotiations, and streamline processes. Eric describes AI as a “force multiplier,” capable of dramatically increasing efficiency and decision-making speed. However, the key to successfully integrating AI into procurement lies in convincing the CFO of its value.

AI’s potential to enhance procurement is significant, but it requires upfront investment. Here again, the CPO must make a compelling case to the CFO, showing how AI can drive enterprise-wide benefits. Whether it’s through improved supplier management, enhanced demand forecasting, or automated workflows, AI can help procurement teams deliver measurable financial results.

4. Position Procurement as a Strategic Asset
One of the biggest challenges CPOs face is overcoming the perception that procurement technology is a non-essential expense. As Eric points out, procurement is often mislabeled as a back-office function, when in reality, it has the potential to influence every aspect of the business. By positioning procurement technology as an operational asset rather than a procurement tool, CPOs can shift the conversation from cost to value creation.

This repositioning is crucial in the current economic climate, where rising interest rates and the cost of capital are squeezing margins. CPOs who can demonstrate how their initiatives will optimize free cash flow and improve return on invested capital will find it easier to secure the necessary funding.

Final Thoughts: The Path Forward
For CPOs, the path to success lies in deepening their financial fluency and aligning their goals with those of the CFO and the broader C-suite. By presenting procurement initiatives as strategic investments that drive enterprise-wide value, CPOs can secure the funding they need to implement the digital tools that will transform their function.

Eric’s advice is clear: don’t shy away from the financials. Understand how your initiatives impact the company’s key metrics, build a strong business case, and position procurement as a strategic asset that drives shareholder value. In doing so, CPOs can not only secure the funding they need but also elevate their role within the organization, becoming true partners in driving business success.

The office of the CFO has traditionally had six functions, or areas of business, that together form the work and tasks of the finance team. Each area has built up an accompanying technology stack with increasing levels of automation being injected into processes as finance leaders strive for new efficiencies and cost reductions while increasing governance and control to improve risk management.

Across each function, new software from innovative vendors has become popular with CFOs as they’ve seized on the imperative to automate repetitive, low-value tasks and free up their teams to focus on more strategic work that creates opportunities for enterprise investment and growth.

• Procure to Pay systems such as SAP, Coupa and GEP have established themselves as an integral part of the CFO office, automating the purchasing lifecycle – from requisitions and POs to receiving goods and payment. 
• Order to Cash has seen the advent of autonomous receivables through technology pioneered by the likes of Sage, Oracle and Esker.
• Treasury has automated both cash forecasting and cash management with software such as Kyriba.
• Record to Report has successfully implemented autonomous accounting with tools like High Radius and BlackLine.
• FP&A uses planning tools like Anaplan to transform a company’s financial decision-making with connected planning and insights.
• Tax software such as Vertex automates and digitizes processes from exemption certificate management to B2B validation to invoicing.

But what many CFOs don’t realize is that there is now, in fact, a seventh area of business within their office and that this function offers the biggest and quickest opportunity to deliver improved productivity and increased efficiencies through the use of AI-driven automation – the chance to pick the lowest-hanging fruit and demonstrate immediate ROI on investment in new technology.

Spend management refers to every dollar a company pays out for goods and services but is often overlooked and hidden away in a dark corner of procurement. Effective spend management helps to ensure that every expenditure is necessary, strategic, and provides value to the company. It also involves analyzing spending patterns, identifying inefficiencies, and making adjustments to improve financial performance.

If a CFO brings more of their company’s spend under management, instead of allowing the business to bypass procurement with ‘rogue’ or ‘maverick’ spend then not only will they see 10-20% cost savings due to increased supplier competition, but cycle times will reduce by up to 90% as slow manual processes are automated.

Using automated spend management technology such as Globality, global enterprise companies can reduce the RFX process from 3-6 months to 27-35 days on average. This dramatic increase in speed and efficiency comes at all stages of the purchasing journey.

With AI-driven autonomous sourcing, the business user can still lead the process and include their preferred suppliers. However, within rules and guardrails set in place by procurement that will enhance competition and improve compliance and risk management by ensuring all purchases adhere to company policies.

Reducing the sourcing cycle from 3-6 months to 27-35 days

Engagement Initiation (Was 1 week, Now 1 day)

• Business User (BU) raises requestion for RFx
• Schedule kick off call with BU (to discuss process)

Supplier Information & Requirement Gathering (Was 2-6 weeks, Now 2-3 days)

• Buyer sends NDA to new suppliers
• Buyer/BU partner get RFX documents together
• Buyer/BU agree timeline

RFx quotation phase (Was 2-4 weeks, Now 8-10 days)

• Buyer issues RFx email to selected suppliers which will include timeline & related documents

Quote Evaluation (Was 2-4 weeks, Now 2-3 days)

• Buyer receives quotes back
• BU/Buyer evaluate quote

Presentation (Was 2-4 weeks, Now 5-8 days)

• Shortlist selected supplier to present to BU
• Buyer starts negotiation conversations before and after presentation
• Buyer/BU select supplier

Contracting Stage (Was 1-6 months, Now 3-5 days)

• Contracting process begins

RFx Close Out (Was 1-2 weeks, Now 1-2 days)

• Buyer informs unselected suppliers

In many cases, G2000 companies are enjoying even greater efficiencies than those listed above. Iconic UK-based telecoms provider BT reduced its cycle time to market from seven to ten days down to just one day and reported this substantial efficiency gain in its 2024 Annual Report.

These figures were based on more than 1000 projects sourced on Globality’s AI-driven platform across nearly £8bn of spend so represent substantial new value to the business.

“We are now using generative AI so that our teams just have to type one sentence and the generative AI will help them along to do everything all the way to engaging with suppliers. It has super simplified the whole process,” says Cyril Pourrat, BT’s Chief Procurement Officer.

In addition to those speed to market improvements, BT has enjoyed double-digit savings across that spend as users collaborated with colleagues and suppliers and significantly reduce costs through increased competition, data-driven insights, and intelligent analysis.

Similarly, one of the world’s most recognizable sporting goods brands has adopted autonomous sourcing and its business users now self-serve for all events up to $3m with no involvement from procurement whatsoever. That has freed up 30 people from its Business Process Outsourcing office to work on other, higher-value projects – huge value to the company.

In an era where every dollar counts, especially in the face of economic uncertainties, managing spend more effectively can unlock significant value for a company, directly impacting its bottom line and bridging the gap between finance, procurement, and overall corporate strategy.

Adding spend management as the seventh function of the CFO office is not just a necessity; it’s an opportunity for CFOs to drive greater value for their organizations. The scope of their responsibilities has expanded beyond traditional financial management and CFOs are now strategic partners in business decision-making, playing a crucial role in driving growth and innovation.

Click here to book a demo of our award-winning AI-driven spend management platform.

When you think of procurement, the first association is not necessarily ‘cool’. But here’s a radical thought: AI is making procurement one of the coolest functions in the enterprise! I previously led an AI development team at Microsoft’s Xbox, so I know what cool tech is, and I passionately believe that procurement + AI is not only cool, it is, in fact, glamorous and the cutting-edge of every global corporation.

First, we need to agree with the premise that ‘cool’ is a function of creativity, innovation, impact, personal brand and, as my Globality co-founder Joel Hyatt argued in a recent Forbes article, purpose. AI is enhancing all of these attributes across procurement and helping transform the function into a place where the brightest and best want to make their mark.

There’s a very serious point here in the context of the current skills shortage. A recent Gartner study found that only one in six procurement teams believe they have “adequate talent” to meet their future needs. Companies seeking to recruit the best talent and use procurement strategically must have an edge – and that edge is AI. 

So, let’s break down those cool factors: 

Creativity – Fairly or unfairly, procurement’s image is tainted by its association with box-ticking. When many people think of procurement, they think of compliance, regulations, and bureaucracy. This necessary emphasis on processes and controls can give the impression that procurement lacks creativity or flexibility. The good news is that democratizing data access and handling routine processes is exactly what AI does most efficiently, freeing up procurement people to be more imaginative and creative. 

That creativity will look different in every company. It might focus on driving sustainable and ethical practices that positively impact the brand, society, and the environment. Or it could involve collaborating more closely with various departments, suppliers, and other stakeholders. Or running campaigns to raise awareness internally and externally to promote the ways that procurement is having a positive impact through measures like cost savings, risk management, innovation, and sustainability. Or simply staying on top of market trends and being more strategic. 

Innovation – Using AI-driven technology is innovative by definition. However, procurement stands out as one of the best corporate use cases for Gen AI in particular. Gen AI in procurement can analyze and synthesize huge volumes of complex, unstructured text-based documents to help specialists in all types of sourcing scenarios – from scoping RFPs to making buying decisions. 

The key here is learning to “partner” with AI. Complex, high-stakes spend categories are the most difficult to procure – and until now, to automate. Today, instead of investing hours or days writing a long, detailed brief that covers every possible scenario, anyone can “converse” with Gen AI. They can convey what we call “complex intent” at different stages in the procurement journey using natural language. This not only saves considerable time but achieves much better outcomes because the AI is drawing on a massive body of accumulated knowledge and intelligence from huge number of buyer and seller transactions. 

The bottom line here is that AI-powered innovation is doing much more than simply automating simple procurement tasks. It’s transforming a complex process that has never been humanly possible to do efficiently, optimally, and personally, with a realistically sized team of procurement specialists. 

Impact – What’s cooler in today’s lean, cost-conscious business climate than being able to make a positive impact on productivity? As Scott Belsky, Adobe’s Chief Product Officer and board member of Globality, says in his Substack Implications: “As smaller companies modernize using a new AI-native stack of technology, they no longer need to grow their team to scale their ambition.” 

Procurement’s reputation has suffered in the past due to productivity issues. Activities like data entry, invoice processing, and purchase order processing were very manual and error prone. Systems were fragmented and siloed, leading to inefficiencies. Supplier management was inconsistent and unstructured. AI-based procurement addresses all these issues. 

Of course, the other huge impact of AI-based procurement is its ability to source more intelligently and save companies huge amounts of money. Matt Prichard, Fidelity Investments’ CPO, reported seeing a 20% price improvement by using AI-based autonomous sourcing, for example. 

Personal Brand – The inherent stress of working in procurement with its complexity, tight deadlines, and cost targets makes work difficult enough. But the negative stereotypes about procurement as an obstacle to ‘get around,’ which causes friction and complications, can feel demoralizing. 

Procurement people I’ve met genuinely want to make a positive difference in their companies. But if specialists lack the tools and technology to do their jobs productively, at the pace of business, they are set up to fail, which grinds down morale. 

By liberating people from the drudgery in procurement, making every step of the journey faster, and delivering better outcomes, AI improves every aspect of the function and the lives of those who deliver it. 

To conclude, it is worth reiterating that procurement drives the trade of trillions of dollars around the world. With the power of AI-driven sourcing technology, procurement teams will be participating in the creation of the largest economic engine of our lives, something which glues the world together. I think we can all agree that’s pretty cool!

As the buzz around AI, and gen AI in particular, refuses to die down all CFOs are on the hook from their CEOs and boards to find use cases for this game-changing technology that deliver instant upticks in productivity and efficiencies while reducing OpEx and positively impacting the bottom line. A select group of innovators have identified that procurement is the lowest-hanging fruit out there, enabling enterprises to drive more value from their company spend by implementing enterprise-wise procurement mandates.

They are adopting AI-driven sourcing and spend management technology to ensure that all third-party spend is tendered fairly, competitively, and transparently — with the right guardrails and policies in place to maintain compliance and risk management. As a result, these CFOs are instantly able to get more visibility, control and assurance of buying the right goods and services at fair market prices across all of their expenditures.

Global 2000 companies spend billions of dollars each year but legacy procurement processes and technology mean that many employees simply bypass the designated systems and engage in ‘maverick’ or ‘rogue’ spend as they need to be able to execute their jobs in the marketing, R&D, technology, human resources, real-estate and other functions in the company with a reasonable degree of speed and simplicity.

But forward-thinking finance leaders have identified autonomous sourcing as the answer to this conundrum – the user-friendly, consumer-like experience means using this technology for all company spend above a certain threshold is one mandate that their workforce is happy to embrace.

Let’s look at what CFOs need to consider in order to encourage participation in the process and make sure procurement mandates drive their companies toward the goal of delivering savings, reduced operating expenses and improved business results.

Why more companies are choosing mandates
Traditionally, mandates haven’t always been welcomed by employees, particularly those within the “frozen middle” of organizations where there’s a large disconnect between the declared company strategy and operational imperatives and ultimately the execution by mid-level managers. However, employees will often take the path of least resistance and not follow recommended business processes and practices as they know there are no consequences for doing so, as long as they don’t exceed their budget. While this ensures budgets are not surpassed, it also ensures companies WILL get less for more within that budget. 

With mandates, CFOs can quickly and effectively encourage the behaviors needed to deliver on business goals, principally more efficient cost control and adding strategic value. That’s why we’re seeing more enterprises adopt this strategy.

CFOs are also realizing that being nimble and being buttoned up are not mutually exclusive. In fact, mandates can increase efficiency and agility, especially within procurement where improved spend management directly impacts the bottom line.

Making it easy for employees to comply
For mandates to succeed, they need to be easy for every employee to comply with. It’s straightforward enough to create mandates that are clear and reasonable, such as: “Anyone spending more than a specific dollar amount on a service must participate in the procurement process.” What’s more critical is ensuring the underlying processes for the protocol you’re mandating are easy to use.

If employees are using outdated procurement systems that are difficult or cumbersome, then they’re going to struggle to comply. If you empower people with self-serve, intuitive AI-powered technology, it will make them want to use the mandated platform on an ongoing basis.

Take travel booking, for example, which used to be an agent-based travel management function. Once employees were empowered with the technology to compare rates, flight times, routes and seats, they could pick the best option that worked for them and for the company. This same model applies for CFOs looking to implement procurement mandates for all of their external spending. By giving employees user-friendly, digital solutions with a modest set of guardrails, you’ll empower them to be their own buyer and simplify compliance.

Autonomous sourcing technology enables CFOs to set mandates without having to fear the reverberation of noise – complaints that it’s too hard to comply or business stakeholders continuing to work in their old, archaic way of email and spreadsheets before going into the system right at the end of the process simply for compliance purposes. While democratizing how an organization buys everything it needs – putting the purchasing decisions in the hands of the experts who own the budgets and allowing them to work however they want – this new model ensures issues such as risk management and ESG targets are adhered to while also improving the bottom line.

Procurement mandates deliver instant cost savings
Successful implementation of a buying mandate means substantially more company spend will be managed by technology with new efficiencies and competition across a transparent, inclusive sourcing process that drives your costs 10-20% lower from day one. This fundamentally leads to either more for less, improvement to the company’s bottom-line (and therefore employee bonuses and shareholder returns) or conscious reinvestment in critical growth initiatives.

CFOs who invest in AI-driven sourcing and spend management solutions will find that mandating their use by the business is far easier than has often been the case in the past and that their organizations will both enjoy value from day one and be better positioned to manage the bottom line in the long term.

Click here to request a demo of the market leading automated spend management platform for instant improvements to your bottom line.

HFS Research recently published a new report Freedom Within Fences: Autonomous Sourcing Goes Mainstream that highlights how business leaders are increasingly recognizing the transformative potential of AI-driven sourcing and spend management. The rapid evolution of artificial intelligence (AI) is reshaping the procurement landscape, offering unprecedented opportunities for efficiency, cost savings, and strategic growth

Here's five reasons the reports says that for enterprises aiming to stay competitive, adopting AI-driven autonomous sourcing is no longer optional—it's imperative.

1. Addressing Procurement’s Biggest Challenges
   One of the most significant challenges in traditional procurement is the inefficiency of sourcing requests, particularly RFx (requests for anything). Centralized procurement teams have historically managed these processes due to their specialized knowledge in market differences, negotiation tactics, and comprehensive evaluations. However, these manual processes are often slow and cumbersome, leading to dissatisfaction among business leaders who face delays in sourcing requests. Leading US financial group T. Rowe Price has adopted autonomous sourcing to significantly reduce procurement friction and improve process efficiency while delivering substantial cost savings.

2. Creating Instant Efficiency Gains
   Despite the belief that competitive RFx is essential for evaluating solutions, creating negotiation leverage, and ensuring fair market value, the traditional six-month RFx timelines are a significant pain point. CFOs' push for savings has expanded the influence of procurement across all spending categories, prompting procurement teams to seek savings in overlooked areas. Autonomous sourcing, powered by generative AI (GenAI), is emerging as a game-changer in this context, automating and expedite the sourcing process, acting as virtual sourcing specialists.
   
   
3. Bringing Procurement to the Business
   Business leaders frequently encounter delays when collaborating with procurement on sourcing requests and some chief procurement officers (CPOs) have been skeptical about their businesses’ ability to conduct an unbiased RFP. Unlike traditional systems, autonomous sourcing platforms give the best of both worlds, enabling stakeholders to run professional RFx efficiently within established procurement guardrails and best practices.
   
   

4. Delivering Cost Savings of up to 20%
   Fidelity Investments adopted our AI-powered procurement platform to manage a high volume of transactions. The platform reduced the time to contract by about 50% and achieved a 20% savings rate in the professional services category with minimal procurement involvement. The seamless integration of the platform with existing systems enhanced operational transparency and efficiency.
   
   
5. Putting You on The Path to Success
   AI-powered autonomous sourcing platforms can transform organizations into 'Generative Enterprises'—entities that use advanced digital technologies to automate procurement processes, reduce manual effort, and enhance strategic decision-making. Our platform uses AI to match business needs with the best suppliers, manage complex proposals, and facilitate real-time negotiations. This not only speeds up the procurement cycle but also enhances decision-making through deep data analytics.
   
   

Act Now or Fall Behind Your Competition!
The report concludes that as we navigate the complex and competitive landscape of 2025, integrating top-tier AI autonomous sourcing platforms is essential. These platforms position the procurement function as a critical enabler of innovation, cost savings, and competitive differentiation.

Click here to download your copy of the full HFS Research report – Freedom Within Fences: Autonomous Sourcing Goes Mainstream

It has long been a quandary for financial leaders but, thanks to new transformative technology the answer is simple – embrace AI and automate your spend management model. 

As businesses continue to embrace the transformative power of artificial intelligence (AI), a clear business case has developed for CFOs that delivers an immediate return on investment (ROI), reducing operational expenses (OpEx) and cutting up to 20% on their corporate spend.

As highlighted by McKinsey, Generative AI, which involves using machine learning algorithms to create new content such as text, images, or videos, has the potential to automate processes, improve customer experiences and streamline operations to help drive new efficiencies and create new value across business.

And according to PwC, companies that implement AI technology have the potential to increase their profitability by 38% by 2035.

Identifying the right use cases is key to success

To reap the benefits of generative AI, CFOs must identify and prioritise the most impactful use cases that align with their business objectives, focusing on the tasks and teams which can make the most impact from day one and drive instant improvements to the bottom line.

By successfully identifying the right areas of their operations to leverage generative AI across their workplace tools, companies can increase their productivity, reduce their OpEx and gain the competitive advantage that is more important than ever in today’s volatile economic environment.

The CFOs big opportunity: AI-driven spend management

There is an area, often overlooked by CFOs, where the power of AI and Gen AI can deliver immediate bottom-line savings – every dollar their company spends, especially on indirect goods and services.

The amount of indirect spend is typically around 20% to 40% of revenue, and is usually classified as Selling, General and Administrative expenses (SG&A). For a typical Global 2000 corporation, this can amount to costs that run into billions of dollars.

However, numerous organisations make the incorrect assumption that they have their indirect spend well-managed, when in reality the situation may be quite different.

Globality’s research for CFOs found 82% of procurement leaders say their indirect spend is not well managed during the sourcing process, leaving substantial cost savings on the table.

Leading global companies like Adidas, BT, Tesco, Fidelity and IQVIA are already using advanced AI sourcing tools such as Globality to avoid overbuying and saving 10-20% on their billions of dollars of indirect spend.

A perfect match: generative AI and sourcing

When Generative AI meets autonomous sourcing, the use cases are compelling and it can transforms an organization's spend management by automating processes, providing intelligent insights, and improving decision-making, enabling business stakeholders to buy what they need more quickly with more competition among suppliers and the ability to negotiate better on price.

If CFOs work closely with their technology teams to identify the most impactful use cases and develop a clear roadmap for implementation, they can realise substantial cost savings from day one, ensuring that all third-party spend is tendered fairly, competitively, and transparently.

Autonomous sourcing also supports the tendering process, comparing proposals and driving negotiations, while at the same time implementing appropriate guardrails and policies to maintain full organisational compliance and risk management.

As a result, CFOs now have visibility and control of indirect procurement. They can be much more confident that they are buying the right goods and services at fair market prices.

And if line-of-business managers are freed from unwieldy procurement processes and empowered instead with user-friendly, self-serve sourcing technology, they are highly likely to embrace this new way of working with enthusiasm.

Our survey found that  85% of procurement leaders believe business users would comply with procurement processes if their companies offered intuitive self-service technology.

Equipping your teams to do more with less

Adopting an intelligent and intuitive spend management platform will also free up sourcing teams from transactional work. By automating these low-value manual processes, they can instead focus on high-value strategic tasks, such as supplier collaboration, scenario planning and improving the function’s operational excellence. This shift will greatly contribute to driving much-needed growth across the business.

Contact us for a demo of Globality’s AI-driven spend management platform – winner of Best Technology Provider at the World Procurement Awards – to see how it uses cutting-edge AI, built from the ground up, to deliver 70% efficiencies and 10-20% cost savings instantly.

In the latest episode of our Spend Sessions Podcast, Amanda Prochaska, founder and CEO of Wonder Services, shared her insights on modernizing procurement models. With a rich background as a senior sourcing leader at companies like Kraft Heinz and MGM Resorts, Amanda brings a unique perspective to the table, focusing on why the vast majority of procurement transformations fail and how to overcome these challenges.

Understanding the Failure Rate in Procurement Transformations
One of the most striking points Amanda made is the high failure rate of procurement transformations. Approximately 70% of these initiatives do not achieve their intended goals. Amanda attributes this to several factors:

1. Lack of Clear Plan: Many organizations embark on digital transformation without a clear understanding of their goals or a detailed strategy to achieve them.
2. Resistance to Change: Employees and stakeholders often resist changes, particularly when they are not adequately involved in the transformation process.
3. Insufficient Training and Support: A lack of proper training and support can leave employees feeling unprepared to adopt new technologies and processes.
4. Inadequate Leadership: Effective leadership is crucial in driving transformation. Leaders must be able to inspire and guide their teams through the change process.

AI and Gen AI in Procurement
The conversation also delved into the transformative potential of AI and generative AI in procurement, exploring how this game-changing technology can significantly enhance efficiency and accuracy in various procurement functions including:

1. Automating Routine Tasks: AI can handle repetitive tasks such as RFP creation, invoice processing and order tracking, freeing up employees for more strategic activities.
2. Enhanced Data Analysis: AI can quickly analyze large volumes of data, providing valuable insights that can inform decision-making and strategy development.
3. Predictive Analytics: By leveraging AI, procurement teams can anticipate market trends and supplier performance, enabling more proactive and informed decisions.
4. Improved Supplier Management: AI can help in assessing supplier risks, performance, and compliance, ensuring more reliable and efficient supply chains.

Six Steps for Successful Transformation
From Amanda’s extensive experience, she highlighted the following key takeaways for leading a successful digital transformation in procurement:

1. Develop a Clear Vision: Start with a clear understanding of what you want to achieve and how you plan to get there.
2. Engage Stakeholders: Involve all relevant stakeholders from the beginning to ensure their buy-in and support.
3. Provide Training: Equip your team with the necessary skills and knowledge to navigate the new systems and processes.
4. Lead Effectively: Strong leadership is essential. Leaders must be able to inspire, guide, and support their teams throughout the transformation journey.
5. Leverage Technology: Use AI and other advanced technologies to enhance efficiency and decision-making.
6. Foster Diversity: Promote diversity within your procurement team to bring in different perspectives and drive innovation.

For the full conversation with Amanda Prochaska, listen to Episode 5 of the Spend Sessions Podcast here.

Contact us for a demo of Globality’s autonomous sourcing platform – winner of Best Technology Provider at the World Procurement Awards – to see how it uses cutting-edge AI, built from the ground up, to deliver 70% efficiencies and 10-20% cost savings instantly.

Globality hosted a Breakfast discussion to kick off DPW’s first NYC event with 20 CPOs and other senior procurement leaders invited to join our CCO Keith Hausmann and HFS Research’s Chief Research Officer Tony Filippone (himself a former CPO) to explore how autonomous sourcing can enable businesses to increase sourcing efficiencies, reducing costs and improving speed-to-market.

What is Autonomous Sourcing?
Introducing the topic, Keith Hausmann revealed a couple of definitions of autonomous sourcing from different sources. McKinsey defines it as: “Deploying fully autonomous sourcing bots to drive procurement in standardized spend areas, thereby freeing up buyer time for more value-additive activities.”

And Chat GPT’s reply when asked is: “Autonomous sourcing leverages advanced technologies to make the procurement process more efficient, cost-effective, and strategic, reducing the reliance on manual processes.”

The Case for Autonomous Sourcing
Tony Filippone then shared some insights and findings from HFS’ recent research into the opportunities for procurement around AI and gen AI. The top priority for sourcing leaders was still reducing costs – some 79% of procurement leaders identified as one of their top three priorities, well ahead of ensuring compliance and process adherence (45%) and managing risk (41%).

Emphazing that the ‘Generative Era’ is not only about doing more with less but also generating actionable business value, he outlined the opportunity for forward-thinking procurement executives to seize the initiative and use new AI-powered technology to dramatically increase the number of projects they manage while improving processes to deliver 20% cost savings, lower risk and 5x increased speed-to-market, all with faster and better spend analytics.

“Imagine an AI-fuelled world that provides freedom within fences,” was his rallying call to the group.

Peer Insights and Perspectives
CPOs from Fortune 500 companies across industries including financial services, consumer goods, pharma and healthcare, retail and travel then shared their perspectives on where they sat on the autonomous sourcing journey and how it could improve the productivity and performance of their teams.

A procurement leader from a multi-billion-dollar food and beverage organization stated that autonomous sourcing is a must to improve productivity across the function and that indirect spend in particular is ripe for its adoption. This was echoed by another leading beverage company whose CPO agreed that there is no question autonomous sourcing is the future for procurement.

The CPO of a top US-based operator in the travel industry said that there was a strong business case for autonomous sourcing to increase efficiencies, and quickly and easily identify the right supplier for every buying need, while his counterpart at a recent pharma spin-off added that this new operating model was on his roadmap to optimize all spend from large strategic purchases to smaller, high-volume tail spend.

Act Now or Fall Behind
The CPO of a financial services firm that recently adopted Globality’s autonomous sourcing platform stated unequivocally that all companies should start with this new operating model today and stop hesitating. He said that category managers across his team had embraced autonomous sourcing and were deploying to business stakeholders for self-service because of the value of speed. What had previously taken 3-6 months to get to market across his organization was now down to weeks, days or, even in some cases, hours.

The discussion highlighted the growing interest in AI-driven autonomous sourcing and helped define the key benefits of this new technology to G2000 companies, underscoring how the increased efficiencies and productivity will help drive wider business value amidst the continuing uncertain macro-economic circumstances.

Contact us for a demo of Globality’s autonomous sourcing platform – winner of Best Technology Provider at the World Procurement Awards – to see how it uses cutting-edge AI, built from the ground up, to deliver 70% efficiencies and 10-20% cost savings instantly.

Our Chief Revenue Officer Seth Catalli reflects on the conversations he held with CFOs and other senior finance leaders at the recent Gartner CFO Conference

In today’s fast-paced business world, organizations are continuously seeking ways to streamline operations, reduce costs, and stay ahead of the competition. At the Gartner CFO Conference in Maryland, the No.1 topic of discussion was about what areas are ripe for transformation through AI. My answer every time was: spend management. Put simply, AI-driven spend management is the biggest untapped opportunity for Global 2000 companies to increase productivity and efficiencies while reducing costs quickly and easily.

The Rise of AI in Business
The adoption of AI across various business units is accelerating, with impressive results. According to the Stanford AI Index 2024, 55% of organizations are now using AI in at least one function. This has led to notable cost reductions and efficiency gains, with 42% of organizations reporting decreased costs due to AI, up significantly from the previous year. Moreover, 59% of organizations have seen increased revenues attributed to AI. And in 2023, AI was mentioned in 394 earnings calls, representing nearly 80% of all Fortune 500 companies.

The keynote session in Maryland from Gartner Distinguished CFO analysts Nisha Bhandare and Clement Christensen also noted that Boards are asking about AI 3.4x more than cloud and 2.5x more than digital transformation.

The Promise of AI in Spend Management
AI-powered spend management involves using new technology to streamline procurement processes, from sourcing and supplier management to contract negotiation and compliance. By automating the repetitive, manual elements of these tasks and adding data-driven intelligent spend insights, organizations can achieve substantial cost savings, improve productivity, and ensure greater compliance and risk management.

How AI Can Achieve These Goals
In discussions with finance leaders from Global 2000 companies across the US and beyond, their primary priorities were clear – increasing efficiency, speeding up processes, and improving both the top and bottom lines. They are actively seeking new technologies that can optimize spend management processes while ensuring compliance with internal and external financial policies and regulations.

AI has the potential to achieve these goals by bringing more spend under control, driving double-digit cost reductions through enhanced competition in the sourcing process, negotiating better contracts with existing suppliers, and identifying new diverse suppliers.

Driving Better Business Outcomes
AI-driven spend management leads to better business outcomes through enhanced strategic decision-making – with access to real-time data and predictive analytics, CFOs can gain deeper insights into spending patterns and trends. Furthermore, optimizing the spend management model helps companies strengthen relationships with key suppliers and foster a culture of collaboration and partnership. This leads to greater value creation across the entire supply chain, ensuring that every dollar spent contributes to the company's overall success.

Act Now to Seize the Opportunity
On the latest edition of our Spend Sessions podcast, senior corporate procurement leader turned digital transformation consultant Amanda Prochaska told me: “Gone are the days of 18 months transformation programs, we're going to move much more quickly with the implementation of AI-powered technologies. The speed of change is going to intensify.”

Companies that are bold enough to seize this moment and transform their processes quickly and effectively will gain a decisive competitive advantage. There is a real sense of urgency among finance leaders – they understand that they can no longer afford to adopt a wait-and-see approach. The time to leverage AI for efficiency savings is now.

Click here for a demo of Globality’s AI-powered spend management platform to see how it uses gen AI to deliver 70% efficiencies and 10-20% cost savings instantly.

Every business unit is looking for ways to adopt AI-driven technology to increase productivity and efficiencies while reducing costs and procurement is no exception.

The Gartner Quick Answer: How to Prepare for AI in Procurement highlights the four key steps that CPOs and other sourcing leaders should take to embrace and adopt AI, enabling procurement to move from back-office function to a strategic growth driver and become a leader across the enterprise.

1. Secure Leadership Support and Resources
   One of the first steps in preparing for AI in procurement is to secure strong leadership support and the required resources. This involves:

• Educating Executives: Informing key stakeholders about the potential use cases and benefits of AI in procurement builds buy-in. Highlighting how AI drives cost savings, reduces supplier risks, and improves working capital creates a compelling narrative.
• Aligning with Organizational Goals: Ensure that AI initiatives are aligned with the organization’s broader AI strategy and roadmap. Prioritize tasks that demonstrate clear ROI.
• Securing Budget: Build a core team that includes cross-functional and technical members led by an AI champion.
  
  

2. Map Processes and Identify Opportunities

To maximize the benefits of AI, companies need to comprehensively map their procurement processes and identify areas where AI can have the most impact:

• Process Mapping: Conduct a thorough mapping of outdated, manual procurement processes to identify repetitive pain points, bottlenecks, and data-intensive tasks that consume significant time and resources.
• Benchmarking KPIs: Establish benchmarks for key performance indicators (KPIs) such as cost reductions, cycle times, and compliance failure rates before AI implementation.
• Prioritizing Use Cases: Create a prioritized list of high-potential AI use cases for procurement, such as SOW creation, spend analytics, supplier discovery, contract lifecycle management, and risk analysis.

3. Enhance Data Infrastructure and Quality

Quality data is the backbone of successful AI implementation. Companies need to enhance their data infrastructure and ensure the integrity and accessibility of their data:

• Data Inventory: Take stock of existing supplier master data, contract databases, and pricing data, evaluating their completeness and accuracy. This includes data from ERP systems, CRMs, supplier databases, and other repositories.
• Data Governance: Develop or adopt a schema for data cleansing, enrichment, labeling, and categorizing. Establish a robust data governance framework with specific access controls, security protocols, and compliance measures.
• Data Quality Assurance: Implement processes to ensure the reliability of data used for training AI models. This includes regular audits and updates to maintain high data quality.

4. Select Suitable Solutions

Choosing the right AI technology solutions is crucial for effective AI adoption in procurement:

• Vendor Evaluation: Assess AI vendors and technologies that cater specifically to procurement needs, considering security protocols, integration capabilities, total cost of ownership, and vendor reputation.
• Solution Analysis: Analyze shortlisted AI solutions for their functionalities, compatibility with existing systems, and user reviews.

Click here to download the full Gartner Quick Answer: How to Prepare for AI in Procurement

And contact us for a demo of Globality’s autonomous sourcing platform – winner of Best Technology Provider at the World Procurement Awards – to see how it uses cutting-edge AI, built from the ground up, to deliver 70% efficiencies and 10-20% cost savings instantly.

Gartner, Quick Answer: How to Prepare for AI in Procurement 17 April 2024, By Naveen Mahendra
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

The integration of Artificial Intelligence into the workplace is a topic of widespread discussion, particularly in the realm of autonomous operations. I have been building AI products since 2007 starting with VideoSurf, a company I founded to develop computer vision and audio recognition. My AI focus continued at Microsoft, when they acquired VideoSurf, and it continued through to my biggest, most ambitious company, Globality.

I believe that AI is akin to an avocado— not ready, not ready, not ready, then overnight it's so ripe that if you don't consume it now, it will be too late. Kidding aside, AI took years to develop into an “overnight” success. Those who do not act now risk falling behind competitors and missing out on critical efficiencies and innovations. Individuals who are hesitant to adopt AI will face negative consequences in their careers. On the other hand, those who advocate for and embrace AI will be promoted to become the next leaders in their domains.

As companies navigate the vast opportunities presented by exponential technological advancements, deciding which AI projects to prioritize becomes a significant challenge. Not every initiative will prove effective, and some, while functional, may not significantly impact the bottom line. These factors should guide the selection of AI projects:

1. Evaluating the applicability of AI to the department or area of your company that you lead.
2. ROI: Assessing the impact, i.e., determining whether it moves the needle.
3. Considering the need for disruption and the opportunities for improvement compared to the status quo.

These are the three parameters that any executive should evaluate now to determine where to start. Let’s delve into the details to understand the applicability of AI to a specific function. 

Understanding the applicability of AI

AI holds immense potential to significantly enhance and streamline operations across departments, including marketing, engineering, customer service, and more. The key to unlocking this potential lies in identifying the defining characteristics of top talent within these functions and envisioning how AI can embody similar attributes to better support their work. Given the unique circumstances of each company, the objective may be to enhance their effectiveness, do more with less, or over time, reduce headcount.

While navigating this sensitive topic, it's prudent to develop a forward-thinking perspective on what job descriptions for talent might entail in an AI-driven era. For example, in procurement, key elements could include high emotional intelligence, a strong business background, understanding business context as much as the business does, excellent communication and collaboration skills to navigate complex value chains, and other strategic skills that machines cannot replicate.  

However, in procurement today typical professionals are process-oriented, with  negotiation skills and a comprehensive understanding of policy enforcement. They excel in financial analysis, document drafting, requirement gathering, stakeholder interaction, and prioritizing various tasks. Their ability to manage time effectively, report clearly, escalate proactively, and forecast accurately makes them invaluable.

Let's explore the characteristics of AI and how they can be leveraged to support the human talents outlined above:

1. Interview and collect requirements: AI agents can automate the initial stages of procurement by interviewing stakeholders and gathering requirements with precision and intelligence. This ensures a clear understanding of needs from the outset. Recent advancements in LLM technology enable a truly humanized, machine-led interview process that is dynamic and personalized. Modern LLMs have achieved a much higher level of natural language processing capability. They can understand context better and generate coherent, contextually appropriate responses. LLMs combine linguistic prowess, contextual awareness, and adaptability to revolutionize requirements gathering. Their human-like interactions foster collaboration, reduce ambiguity, and set the stage for successful procurement processes.
   
   
2. Exceptional writing and articulation: AI's ability to generate detailed project scopes, proposals, and reports ensures that all procurement activities are well-documented and articulated, facilitating clear communication across departments and in between buyer and seller. This aligns perfectly with the extensive narrative requirements of buying and sourcing, showcasing LLM's potential to streamline complex language-based tasks. LLMs generate content swiftly and efficiently. They do not suffer from fatigue or variations in writing quality. They comprehend industry specific jargon, allowing them to communicate to experts and laypersons alike. Even language is not a barrier, allowing easy communication across cultures and borders. 
   
   
3. Triage and logic understanding: AI can classify and direct sourcing events to the appropriate processes through logical analysis, ensuring efficiency and compliance with organizational protocols. The combination of LLM's understanding of user intent, alongside the configuration of companies' rules and policies, plus the machine learning aspect of selecting the most logical path, enables AI to guide users towards the optimal journey. With recent models having increasingly long context windows, LLMs can logically analyze complex sourcing events and route them appropriately. Like a procurement professional, LLMs can dynamically adjust their triage decisions based on urgency, resource availability, stakeholder priorities, historical data, and user preferences. Retrieval Augmented Generation (RAG) allows LLMs to access procurement-specific information to help with these decisions.
   
   
4. Process journey implementation and guardrail enforcement: Through automation and AI-driven workflows, procurement processes are streamlined, and compliance with policies is enforced, reducing human error and enhancing efficiency. LLMs can be trained on organizational policies, legal guidelines, and compliance requirements. When integrated into procurement workflows, they ensure that every step adheres to established rules. By automating routine tasks, LLMs significantly reduce the risk of human error. They consistently apply policies, cross-check data, and flag any deviations, leading to more accurate and compliant processes. They can adapt to changing policies or process modifications, learning from new examples, and adjusting their behavior accordingly. 
   
   
5. Marketplace dynamics and negotiation: AI technologies can introduce competition in terms of cost and quality, analyze proposal trends, and conduct negotiations to secure the best prices, contributing to significant cost savings for the organization. Recent research has shown that LLMs can consistently reach successful deals in negotiation scenarios. 
   
   
6. Collaboration across business units: AI facilitates seamless collaboration and orchestration among procurement, finance, legal, and other business units, ensuring that all stakeholders are aligned and informed. An AI agent interacts and converses with all parties to ensure speed and precision. LLMs do not have the biases and incentives that individuals have, ensuring they work for the best outcome for all involved.
   
   
7. Proposal analysis and decision-making: AI excels in analyzing proposals by swiftly processing vast amounts of data, identifying patterns, and extracting insights that might be overlooked by human analysts. Moreover, AI can efficiently run models and scenarios regarding proposals, providing rapid simulations and predictive analytics to assess various outcomes. Essentially, AI functions as a virtual analyst, capable of handling complex tasks with speed and precision, thus augmenting decision-making processes and optimizing resource allocation.

The ideal place to start? 

Beginning the AI journey with procurement is a strategic choice that promises not only immediate benefits in terms of cost savings and operational efficiency but also sets the stage for a holistic transformation across the organization. It's a testament to the potential of AI to act as a catalyst for innovation, pushing the boundaries of what's possible and paving the way for a future where intelligent automation enhances every aspect of business operations. 

Globality can help you use AI to deliver immediate new productivity and efficiencies across your company spend while cutting costs by 20% from day one. Click here to request a demo.

The promise of generative AI has carried the stock market to new heights, and some even believe we’re at the precipice of a technology boom that the world hasn’t seen since the advent of the Internet in the 90s.

That’s great for investors – but finance leaders don’t care about the hype. They only care about generative AI to the extent that it can impact key financial metrics such as working capital, free cash flow, and EBITDA. In short, they only want to know about AI if it can drive tangible business outcomes and improvements.

Globality is at the forefront of unlocking the massive cost savings of AI. We call it Transformative Spending, and it’s revolutionizing the way companies spend their money.

So how does it work? AI can be threaded throughout the procurement process from creating the sourcing event all the way to awarding to a selected supplier. Along the way, you will have automated mundane tasks, increased competition among vendors, and automatically generated key documents all whilst staying in control of spend decisions. Think of this application of AI as a way to prevent margin leakage and thus improve free cash flow.

Margin Leakage and the Impact on Free Cash Flow
In its most basic view, net income is revenue minus expenditures. The typical view of margin leakage is that it represents decline in the profit margin occurring as a result of pricing and promotion shortfalls on the revenue side. A different kind of margin leakage can also result from the expenditures side of the equation where the act of purchasing goods and services falls short of best practices.

In some cases, a small, persistent drip of revenue leakage can become a raging torrent. Likewise, company’s management needs to plug holes in operating costs and overhead costs from expenditures. The procurement function can be an incredible leverage point for increasing net profit margin through operational best practices and reducing expenditures.

The Power of Procurement + AI
How can AI prevent margin leakage and reimagine the value that procurement can actually offer an organization?

1. Increase vendor competition to realize massive savings. If an employee is sourcing a project, the more fully-vetted vendors that the AI invites to participate the better and the greater savings the subsequent competition will create.

Furthermore, key alerts can be put into play: an AI-powered system can notify superiors when a buyer is inclined to award business to a proposal that isn't the most cost-effective, providing an opportunity to rectify the decision and optimize savings. It can also alert and notify stakeholders when spending is about to be sole-sourced, promoting multiple bids and fostering a more competitive procurement landscape.

2. Get a better price without raising your blood pressure. AI makes negotiations easy: it can automate the communication where a vendor’s bid is received and understood, but nevertheless requires some price adjustments. When this practice is done at scale, the result is substantial decreases in the costs of goods and services.

3. Streamlined vendor onboarding to reduce risk. Navigating existing Master Service Agreements (MSAs) and approved vendor lists can be daunting to employees. This AI-guided feature reduces the time and effort required to engage both approved providers and with new vendors, and therefore reduces the risk of the entire project.

4. Keep your people on track with AI-piloted scope definition. Writing scope documents is hard. Often, users don’t know what to say – or they say the wrong thing. AI can guide them, helping them with prompts and even filling in large portions of the document based on what’s been done previously. With an AI “co-author” at hand, employees can be prevented from engaging in wasteful buying.

5. Make information accessible with transparency throughout the entire process. AI platforms provide transparency with comprehensive rate card analysis and pricing insights, while also making supplier and product information readily accessible. Since the platform also has access to both past purchases and market trends, it can offer up recommendations for recent purchases at lower costs, provide benchmarks for negotiation, and facilitate cost-effective procurement strategies.

6. Enable economies of scale through collaboration. An AI-powered platform can identify opportunities for collaborative sourcing, helping aggregate demand across business units and geographies and therefore drive down costs.

7. Accelerate renewals and approvals. AI simplifies contract renewals and enforces approval policies, ensuring competitive bidding and proper oversight to maximize savings on strategic projects.

8. Turn everyone in the organization into a procurement professional. Here’s a big one. The velocity of the business can slow down if procurement has to drive every single spending project – not just the strategic purchases, but all the tail spend as well. That can be avoided by giving the entire organization the ability to source their own goods and services while keeping them safely within AI-mandated guardrails.

Doing so can speed up business outcomes by a factor of three. Purchases don’t have to run through a central department anymore; the act of sourcing can be “democratized” and every business unit can be empowered to complete their own purchasing projects. According to BT CPO Cyril Pourrat, AI-powered autonomous sourcing is making it possible for his non-procurement team specialists to sit down and create a sourcing request “with one sentence”. 

The collective outcome of the cost drivers described above are significant:
1. $100 million returned to the balance sheet. Costs that would ordinarily have been wasted on poor purchases or incorrectly negotiated ones return tens of million dollars quickly. How quickly?

2. Payback period in less than 12 months. It takes less than a year to realize the return on the AI-powered purchasing platform.

3. Sourcing projects completed 6x faster. Because of the efficiency gains inherent in having each employee source their own purchases, with AI guiding them while safeguarding the interests of the organization, projects can be completed at a high velocity. A leading US-based investment firm who use Globality is now competitively sourcing spend that would have taken 50 additional people to achieve and is seeing a 20% price improvement.

Bottom line savings with AI-powered spend management
Far more than simply “adding AI’ to the existing procurement process, a Transformational Spending approach finds a complete rebuilding of the function to both empower the existing team while enabling all employees to source and complete their own purchasing projects – all while preventing margin leakage and returning tens of millions of dollars to free cash flow. Some organizations have already realized this vision, while others are racing to it.

But it’s only a matter of time until the rest catch up.

Contact us here for a demo of Globality’s AI-powered autonomous sourcing platform to see how it uses gen AI to deliver 70% efficiencies and 10-20% cost savings instantly.

In this age of efficient growth, the “start from scratch” approach of Zero-Based Budgeting can have an incredible impact on the bottom line. A Zero-Based Budget perspective carefully evaluates not just what’s being spent, but whether a budget line item is even needed. It’s a popular strategy among CFOs for driving the budgeting cycle given the current economic environment.

To truly accelerate the impact of Zero-Based Budgeting, though, organizations should make full use of AI-powered autonomous sourcing. Doing so ensures that every new sourcing project initiated by Zero-Based Budgeting is completed at the best possible price, with the fastest possible business outcome.

Let’s unpack how these two strategies work in tandem to reduce costs and free up cash flow.

What’s zero-based budgeting?

As Gartner explains in the report “Using Zero-Based Budgeting to Rightsize Function Budgets,” business units need to move away from traditional budgeting which “tends to assume a year-on-year continuation of activity and cost.” Instead, they should leverage “zero-based budgeting (ZBB) to better align spending and resourcing with critical business priorities and outcomes.”

The report adds, “ZBB forces a thorough review of all expenses and ensures resources and expenditure allocation consider changing business needs instead of historical continuity.”

In other words, budgeting shouldn’t simply be a case of carrying over all the old vendors and expenses and then gearing up to fight for new things to add. That’s the pre-downturn way of slogging through a budgeting cycle.

Rather, every line item in the budget should start at zero. Doing so forces teams to assess the necessity of each expense, prioritizing based on value and strategic impact. The approach fosters accountability, transparency, and a continuous focus on efficiency.

Every item in a Zero-Based Budget should be examined carefully through the lens of:

• Do the budgeted items align to the company’s strategic objectives?
• Are they even needed given the constraints of the new economic environment?
• If so, are those items negotiated and purchased correctly, or can money be saved?

Gartner doesn’t recommend that every single budget cycle uses the “start from scratch” ZBB method. But in the face of current economic headwinds, it can be a high-impact approach for driving value out of every dollar.

(And it’s notable that in a ZBB exercise, driving value is actually more important in the budgeting process than simply cutting costs. You could end up adding to the budget as long as what you’re adding acts as a force multiplier upon the organization’s attempts to achieve its strategic goals.) 

Autonomous sourcing is the key to zero-based budgeting

So now let’s look at the role of autonomous sourcing in the Zero-Based Budgeting process. It supports ZBB by taking full advantage of the “start from scratch” mentality to ensure that everything newly sourced (or sourced again for the new fiscal year) is done at the lowest possible cost, yet at the quickest possible speed.

Here are some ways that autonomous sourcing accomplishes this:

• Ensuring that more spend is competitively bid, thus creating price pressure.
• Conducting e-negotiations, by which fair negotiations are conducted automatically.
• Properly scoping buying specifications, which helps avoid wasteful buying.
• Improving buyer communications so proposals are more relevant and competitive.
• Accelerating data analysis to support faster and more informed decisions.
• Recommending lower cost products and services based on purchases made by other individuals at the company.
• Giving individual business units the ability to source their own goods and services, enabling them to speed up business outcomes without procurement necessarily leading the project.

How autonomous sourcing delivers instant cost savings

Let’s say a finance team decides they want to keep a quote-to-cash solution because it’s indispensable for the operations of their team. But the solution they’re using is years old, and it hasn’t been sourced, purchased, or negotiated in a long time.

Once the team decides they need the solution, they can use AI-powered autonomous procurement to:

• Save countless hours sending out bids for a quote-to-cash tool, likely keeping their current provider but also opening the door to accepting bids from brand-new vendors.
• Save countless hours analyzing proposals and bids from prospective vendors.
• Select the best suppliers for the quote-to-cash tool.
• Leverage AI-powered negotiation to bring down the costs of the best bids even further.
• Ensure that the entire paper trail has been automatically documented and kept so that future ZBB teams can review the process and achieve the same outcomes.

Repeating this step for each new or old solution in the completed Zero-Based Budget is likely to have tremendous cost savings. Every single item in the budget will have been carefully vetted for maximum cost savings while still aligning with the organization's strategic goals.

How much money can this save? For companies with billions of dollars in revenue, this process can be tantamount to hundreds of millions of dollars in costs returned to working capital and cash flow.

Zero-based budgeting + AI: The bottom line

As we’ve seen, an integral component of ZBB is the ability to ensure that everything sourced by an organization is done thoughtfully and with clear alignment to top-line business objectives. But by adding the additional power of autonomous sourcing, every sourcing project done “from scratch” will also be completed at lowest cost with the fastest business outcome.

Furthermore, by integrating seamlessly with existing legacy suites such as Coupa and SAP Ariba, an AI-powered procurement platform such as market leader Globality can ensure that every employee in a company has the power to source goods and services while staying well within accepted policies and procedures. The result is not a mere budgeting exercise; it's a strategic maneuver that can yield hundreds of millions in savings for large enterprises. 

Click here for a demo of Globality’s AI-powered autonomous sourcing platform to see how it delivers 70% efficiencies and 10-20% cost savings instantly.

The new report from Gartner, Predicts 2024: CPOs Adjust to Technology’s Impact on Procurement, outlines how new technology is rapidly evolving and changing how procurement will be executed in the future. The research helps Chief Procurement Officers understand how technology is impacting the future of procurement and make plans now to address predicted impact on process, staffing and execution.

This blog highlights four key findings from the report, detailing how procurement needs to adopt AI-powered sourcing technology to both drive cost savings and efficiencies and also allow the business to ‘self-serve’ so that procurement teams can focus on more high-value strategic initiatives.

1. AI-powered sourcing provides a competitive advantage

Organizations will have the ability to run more sourcing events, driving incremental cost reductions to the bottom line while increasing policy compliance. These advantages will give them a competitive advantage. Procurement organizations that do not embrace AI technologies will find themselves at a cost and agility deficit compared to their competitors. Procurement organizations will automate repetitive tasks, such as PR approvals, internal and external communication, and supplier approvals, with virtual agents, enabling teams to focus on other value-add initiatives.

2. Autonomous sourcing solutions 'consumerize' the buying model 

3. Gen AI will improve sourcing speed and efficiency

4. Organizations want to drive efficiencies and savings through AI

Interest in AI use cases for procurement has increased dramatically in 2023 – (based on Gartner inquiries with procurement executive leadership and IT leaders responsible for procurement technology on the topic of AI in procurement increased by 17 times in 2023 versus 2022) with organizations exploring ways to drive efficiency and cost savings through practical adoption of AI. This will result in a high number of AI pilots in 2024, positioning acceptance and use of AI to be more pervasive in procurement in the coming years.

Click here to download the full Gartner 2024 Predicts Report with recommendations on actions procurement leaders should take to address the challenges outlined above.

And contact us here for a demo of Globality’s AI-powered autonomous sourcing platform to see how it meets those challenges, delivering 70% efficiencies and 10-20% cost savings instantly.

Gartner, Predicts 2024: CPOs Adjust to Technology’s Impact on Procurement by Micky Keck, Kaitlynn Sommers, Naveen Mahendra, Ryan Polk, Meghan O'Doherty, Lynne Phelan, Fareen Mehrzai 4 January 2024.
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

Autonomous sourcing not only increases efficiencies by automating routine RFP-based tasks but also guides business users to make better buying decisions more quickly and easily, while enabling procurement teams more time to focus on higher-value strategic tasks that drive better business outcomes.

What is AI-Powered Autonomous Sourcing?

AI-powered autonomous sourcing involves the application of cutting-edge technologies, such as Machine Learning (ML) and Natural Language Processing (NLP), to streamline and optimize procurement processes. From creating concise briefs to identifying potential suppliers and negotiating the right price, AI brings automation and intelligence to every stage of the sourcing journey. The goal is not just increased efficiencies and reduced costs but also better, more strategic, decision-making based on real-time data insights.

What are the Key Benefits of AI-Powered Autonomous Sourcing?

1. Efficiency and Time Savings: AI automates repetitive, time-consuming manual tasks such as RFX creation, and email and spreadsheet-based collaboration to identify suppliers and assess proposals. This allows procurement professionals to focus on more strategic activities, accelerating the overall sourcing process.
   
   
2. Deep Category Knowledge: An AI-powered sourcing bot such as GLO intelligently navigates you through the right path for all types of sourcing scenarios (RFP, RFI, RFQ, Sole Source, Delivery of Staffing, and Supplier Panel) with built-in category expertise for more than 7,000 offerings.
   
   
3. Data-Driven Decision-Making: AI analyzes vast amounts of data to provide actionable insights. Procurement teams can leverage this data to make better, more informed decisions, identify trends, and optimize sourcing strategies for cost savings and efficiency.
   
   
4. Supplier Identification: After the scoping process, the AI instantly presents an unbiased list of risk-vetted suppliers, both new and preferred options. Users can review their statuses and attributes, such as diversity certifications and MSA, to select the best providers to invite.
   
   
5. Cost Savings and E-Negotiation: AI-driven analytics can optimize negotiations with suppliers through tactics such as E-Negotiation, which unlocks savings by enabling buyers to initiate a negotiation round with suppliers, sharing how competitive their proposals are relative to others, and encouraging them to submit their best bid.

Act Now or Fall Behind the Competition

The potential of AI-powered autonomous sourcing far outweighs any previous spend management technologies – we are experiencing an acceleration in software innovation and adoption unlike anything seen before. Adopting a wait-and-see approach is not an option in this case as companies who fail to seize the moment will fall behind their competition – and with the proven ability of autonomous sourcing to deliver dramatic savings and increase efficiencies many times over, you won’t be able to catch up on this occasion.

Globality can help you transform your spend management model. Talk to us and let’s calculate the immediate bottom line savings and new value that autonomous sourcing can deliver.

Times are still tough for companies of all sizes and CFOs are continuing to try and work out how they can do more with less as they face more pressure than ever to combat the stubborn inflationary pressures and reduce Operational Expenses (OpEx), while simultaneously helping add strategic value and driving growth across the business.

A McKinsey report found that 70% of CFOs and other finance executives felt ‘unprepared’ or worse when asked about confidence in meeting spend reduction targets. And these cost-reduction targets continue to become more aggressive – respondents said they were aiming for an average cost-reduction target of about 16 percent for SG&A over the next year, representing a 45 percent increase over McKinsey’s previous survey.

So the question for CFOs is how can they achieve this holy grail of driving growth, while aggressively cutting costs and doing more with less? Recent research from Hackett identified that the key action of successful finance leaders was to cut costs only in areas where the work can be replaced by more efficient technology, such as innovative, autonomous solutions.

Supporting this imperative, Hackett’s CFO Report 2023 states that digital transformation has now become finance’s top priority and CFOs must be prepared to invest in new digital solutions to reduce cost and create new capabilities through aggressive adoption of AI and other game-changing technologies. And CFOs agree – 73% made digital transformation of the finance function their No.1 priority for 2023 (the next highest priority was optimizing working capital on 32%).

100% Satisfaction From AI Applications in the Finance Function 
However, for finance to succeed and add greater value and impact across the business, digital technologies need to be rolled out at enterprise scale and, according to Hackett’s findings, this is not happening currently.

Less than 10% have invested in Cognitive computing/artificial intelligence (AI) solutions but, and this is the biggest takeaway from the report, where they are utilized, AI-driven solutions are, without exception, delivering business value and ROI. Of the companies Hackett surveyed, 100% reported that AI deployment had met or exceeded business objectives.

So the goal is clear for CFOs across all sectors and industries – become the intelligent, autonomous enterprise of the future by adopting AI-powered technology in order to gain competitive advantage through cost savings, reduced expenses and adding strategic value across the business.

• 73% of CFOs want to prioritize digital transformation of the finance function
  
• 100% of programs adopting the power of AI met or exceeded expectations – finance organizations have significant opportunities to expand these beyond pilot projects or small-scale deployments
  

How does embracing this smart automation improve your buying model and enable you to better manage your company spend? Autonomous procurement and sourcing technology allows companies to quickly and easily define their needs, compete those needs among both approved suppliers and pre-vetted challengers, then negotiate digitally before ultimately making the best decision based on insights, transparency and compelling alternatives.

It eliminates the repetitive, manual work that takes up procurement’s time, while the consumer-grade user experience means business stakeholders no longer work around procurement (a process known as unmanaged spend) with the subsequent lack of supplier competition leaving substantial cost savings on the table.

By democratizing how an organization buys everything it needs – putting the purchasing decisions in the hands of the experts who own the budgets and allowing them to work however they want – this new model also ensures issues such as risk management and ESG targets are adhered to while instantly improving your bottom line.

If finance partners with a company’s CPO to embrace this game-changing new procurement technology, together they will reap the rewards and drive cost savings and new efficiencies from day one – as the Hackett 2023 CPO Report states, these are the top priority for procurement, as well as finance, and solving this challenge provides a great opportunity for the two functions to work together.

• CPOs top priorities – Combat inflationary price increases & reduce spend cost
  
  
• Hackett’s key focus areas for CPOs: 1. Architect your tech landscape to utilise innovation and AI 2. automate core transactional processes 3. Invest in business partnering capabilities
  
  

BT Group and Tesco Lead the Way
Some leading companies have been early adopters in this field, identifying innovative technology as the way to reduce their SG&A, while freeing up procurement to focus on higher-value tasks and initiatives. BT Group, the UK-based telecom provider, has enjoyed double-digit cost savings on nearly £6bn worth of spend matched through the platform, while leading grocery retailer Tesco has placed record sums of spend through autonomous sourcing in less than six months to increase sourcing efficiencies and deliver greater value to its customers, communities and shareholders.

The Hackett CFO report highlights that high-performing companies automate more than 90% of their routine transactions, as opposed to just over half at their peers. And Hackett’s key focus areas for CFOs this year are to put their investment budget into key priorities – digitalisation– and then drive through this transformation at scale and with urgency.

• Digital World Class finance organizations automate 92% of core transactions, compared to just 58% for peers
  
• Key focus areas for CFOs: 1. Realign investments to reflect top priorities. 2: Transform digitally at scale
  
  

With the weight of evidence on the need to optimise a company’s SG&A spend, there is no reason for CFOs to adopt a wait-and-see approach. Those who follow the lead of the Fortune 500 businesses referenced above will be best-positioned to gain competitive advantage as they navigate the current economic uncertainty and drive future growth and opportunities.

Globality can help you can cut your SG&A instantly. Talk to us and let’s calculate how much bottom line savings autonomous sourcing can deliver.

Procurement may want a seat at the table, but the function is saddled with a perception problem. According to a research study by global consulting firm Kearney, more than half of CFOs surveyed see procurement as a transactional department that’s good for negotiating hard cost savings, but not as a strategic partner that adds value.

Herein lies the challenge: Procurement is associated with routine processes and administration. It cuts costs, but it won't elevate executives to the C-suite. To be there, they must drive innovation and value.

In considering the answer, it may be helpful to implement a bit of a mind shift. There's no real "seat at the table." Instead, there are hundreds of decision-making tables throughout the organization and no one can be present at all of them, all at once.

To secure its figurative seat, procurement must redefine its role and highlight how it can demonstrate new possibilities and new avenues to achieving company goals. It needs to acquire the seemingly superhuman ability to be at all of those decision-making tables at the same time, adding strategic value to every business unit.

How? Let’s start with what the C-Suite truly cares about, especially as we head into 2024:

1. Unlocking innovation
Cost-cutting is definitely on the minds of CFOs, but they also know that it’s not possible to cut one’s way to growth. Rather, what’s needed is to unlock innovation across the organization, enabling every employee to achieve more by removing obstacles and helping them focus on their core work.

How can procurement do that? By bringing sourcing down to the level of the employee, enabling “autonomous self-sourcing.” Giving employees the ability to source their own products and services quickly will dramatically speed up business outcomes, raise the level of productivity across the entire workforce, and—as a result—unlock innovation. When employees have more time and focus for their actual work and spend less time slogging through purchasing cycles, the entire business benefits.

But how is it possible to give employees that kind of power? Doing so ties into a second major priority of the C-suite, which is:

Globality’s AI, years in the making, ensures that all sourcing is done according to business protocols and processes, but it also demystifies the process and speeds up the outcome so that every employee can act as a procurement professional.

As mentioned, no one has the power to physically be at every decision-making table at once. But with AI, it’s not necessary to do so. Rather, AI gives procurement leaders the ability to be everywhere -- guiding each business unit to strategic outcomes with the power of autonomous self-sourcing.

An important consequence of this AI-powered procurement cycle will also get the attention of the C-suite: by bringing employees into the sourcing process, procurement has the incredible ability to meet business leaders “where they are” and transform indirect spend into a massive cost savings for the company. In many cases, indirect spend can be as high as 10-20% of a company’s revenue, resulting in a significant loss of operating capital.

If all indirect spend becomes controlled with AI guardrails in place spend and the ability to negotiate and bring down contract prices effectively – companies can save more than $10 million for every $1 billion in revenue.

Procurement perfected

So procurement definitely can have a seat at the table – or, to be more specific, procurement can be seen as a strategic player that’s on par with anyone in the C-suite. It can do so by helping unlock innovation and unleashing employee productivity through the power of AI. And as a result, it can help the company recover tens of millions in dollars that would otherwise be lost due to poorly managed indirect spend.

That’s an outstanding story for procurement leaders to tell as they head into 2024!

Globality can help. Talk to us and let’s discuss your AI strategy for the New Year and beyond.

Financial Planning and Analysis (FP&A) managers play a pivotal back-office role – budgeting, forecasting, and analyzing financial data to drive intelligent, strategic decisions that will not only enhance efficiencies and cut costs but also help enable company growth.

Today, FP&A managers have a unique opportunity to leverage automation across their spend management model to drive better business outcomes and also increase their own impact and influence across the organization.

Here are six reasons why they should champion this AI-powered corporate finance transformation:

1. Drive Better Decision-Making
   

   Automating company spend management means finance teams have greater insight into how and where an organization spends its money, not only aiding short-term planning but also guiding CFOs and leadership teams to make more informed long-term strategic decisions.

   
   
2. Increase Productivity and Efficiencies
   Automating repetitive spend management tasks, such as the time-consuming manual sourcing process based on spreadsheets and emails, frees up valuable time and resources enabling procurement teams to do more with less. Financial Management magazine recently reported that two-thirds of FP&A professionals believe AI will transform the function – act now to get ahead of the game. 
   
   
   
3. Add More Value
   

   With those time and resource savings, FP&A managers can focus on more strategic activities such as scenario planning, financial modeling, and providing intelligent insights to the CFO – automation empowers you to be more proactive, forward-thinking and add wider business value.

   
   
4. Deliver Double-Digit Savings
   

   Automating the spend management process means that FP&A managers can easily track spending patterns, identify cost-saving opportunities, and implement cost control measures. For example, Globality’s autonomous sourcing platform delivers 10-20% cost savings from day one, as well as 70% efficiency gains and 20x ROI.
   
   

5. Improve Compliance
   

   Automated spend management platforms such as Globality’s include built-in compliance checks and guardrails, which ensure that all purchases align with corporate purchasing policies as well as regulatory requirements, reducing the risk of non-compliance  financial penalties.
   
   

6. Stand Out From the Crowd
   

   According to McKinsey, next-level FP&A managers stand out from the crowd by identifying the critical factors that will have a material effect on the business, explicitly linking those factors to financial performance with data, and participating in decision making. Championing spend management automation is one of those factors and will mark you out as a finance leader with strategic vision and leadership skills.
   
   

If you are interested in learning more about how FP&A managers can lead spend management automation within the organization, reach out to us here.

Procurement has to move beyond its traditional role of merely sourcing goods and services at the cheapest price.

It needs to deliver strategic value to the organization, utilizing the power of AI to automate repetitive, transactional processes and free up procurement teams to drive better business outcomes as strategic deal-makers and value creators.

Here are six steps that procurement leaders should take to enable their teams to become true business partners:

1. Make Data-Driven Decisions
   Use new AI-powered technology to make more informed and intelligent sourcing decisions that utilize features such as E-negotiation to expose cost/qualitative supplier differences and fully enable category strategies to facilitate business sourcing, optimizing costs, improving efficiency, and increasing speed-to-market.
   
   
2. Embrace Game-Changing Tech
   Showcase how better managing company spend with NLP-driven interactive dialogue fueled by a bot that understands over 7,000 spend categories is a tangible business use case for generative AI, increasing productivity and efficiency, and reducing OpEx from day one.
   
   
3. Do More With Less
   With no training or procurement experience needed due to the consumer-like UX and Al bot guiding every step of the process, autonomous sourcing technology enables leaner procurement teams to run more projects, while actually having more time to focus on strategic tasks that add wider business value. 
   
   
4. Develop Supplier Relationships
   Transform relationships with your suppliers from transactional to strategic, reviewing provider proposals by AI bot with complete qualitative, quantitative and compliance analysis, increasing your speed of decision making, and driving collaboration and innovation with both internal and external partners.
   
   
5. Think Long-term 
   Add more, longer-term strategic value to the business by using AI-powered technology that collects information from each completed sourcing project and applies to ML models, making every future event more intuitive, personal and insightful for  stakeholders across the organization.
   
   
6. Attract Top Talent
   To transform into an impactful business partner who delivers real value, you need to attract and retain today’s best talent, offering them the innovative, intelligent, and consumer-like technology and platforms they are used to in their personal lives.
   
   

As McKinsey concludes in its recent report Procurement 2023: Ten CPO actions to defy the toughest challenges: “Procurement leaders who demonstrate value to the enterprise can become full-fledged strategic partners to CEOs, CFOs, and COOs. No longer should CPOs be merely guardians of a portion of enterprise costs. Now is the time for procurement leaders to step into a new horizon of value creation.”

If you are interested in learning more about the exciting opportunities for procurement in its new role as 'Business Partner', reach out to us here.

For all the talk of the power and potential of generative AI to revolutionize how we work and transform the productivity of teams tangible use cases that are having an instant impact on productivity and the bottom line are still in short supply. But there are some functions where generative AI is already making a tangible impact and delivering increased productivity, new efficiencies and instant cost savings. One such example is in procurement – indirect sourcing to be precise.

Indirect vs. direct spend
Indirect sourcing has traditionally been more complex and bespoke than direct – after all buying legal, HR, marketing or IT services is less straightforward than ordering the materials required to build a physical product –something that you have to define every time that you are contracting for these types of needs. And the need for indirect services often arises spontaneously unlike direct goods which can be planned and budgeted for months in advance.

Most organizations don’t have a very good handle on these costs. P&L statements almost always place indirect spend as between, at the low end, 20% of revenue to as much as 40% or more at the high end, particularly in the industries such as banking and financial services. In the average Global 2000 company this amounts to billions of dollars of cost that ultimately impacts net income dramatically.

Leaving substantial cost savings on the table
Companies like to think they’re on top of all this but in our survey of global procurement leaders, only one quarter of respondents required a transparent, competitive buying model for their indirect spend. This is obviously much different than COGS spend which undergoes incredibly aggressive negotiations, auctions and fierce competition.

All this means indirect spend is harder to oversee effectively than direct and often leaves substantial cost savings on the table as it is not managed fairly, transparently or competitively. But there is an answer as finance and procurement leaders now enjoy easy access to powerful AI-powered applications that can improve their processes, streamline operations, and boost productivity, gaining competitive edge in the marketplace.

Use gen AI to scope projects faster than ever before
As explained here, generative AI can analyze any long-form text and rough notes and automates the rest of the scoping process, drastically reducing the time taken to a professional brief that can immediately be sent to best-fit suppliers, enabling procurement teams to get to market faster. For example, GLO, our AI-powered bot, will take any notes and documents that have already created as part of project planning, such as project requirements and project challenges presentations, easily uploading one or more files in various formats (e.g., PDF, Word, Excel).

Using generative AI, GLO learns from the given information, asking thoughtful follow-up questions and offering suggested answers to expedite the scoping process. Users can easily accept, reject, add to, or edit GLO’s suggestions. And to ensure privacy, the project-related documents are not be shared with providers.

Tap into deep category knowledge
As procurement teams adapt to the current economic conditions and are challenged to do more with less, users may find themselves managing sourcing projects across areas they don’t necessarily have huge experience of. But if a buyer is unsure how to respond to a question about a topic they are not fully familiar with, generative AI can step in and fill the gap.

With its deep category expertise, GLO engages users in a thoughtful conversation and provides intelligent insights on the topic in question, enabling the buyer to move forward with confidence, having gained deeper knowledge in that area, and ensures that the specifications for suppliers are thorough and accurate.

Act fast to gain competitive advantage
With the arrival of generative AI, this technology is no longer seen as a futuristic concept but rather as a vital tool for businesses to stay relevant and competitive in an ever-changing and challenging landscape. Gartner’s recent research revealed that 70% of companies are already experimenting with generative AI use cases.

Leading companies such as BT and Santander are using our AI-powered platform to deliver double-digit cost savings across more than US$3 billion of their indirect spend, while Tesco recently announced that it had become the first in the European retail sector to introduce autonomous procurement by using our Platform to achieve new efficiencies across all its indirect spend sourcing.

Check out how our Generative AI-powered bot, GLO, delivers 70% efficiency gains, 10-20% cost savings and 20X ROI.

Universities and other higher education (HE) institutions face well-documented financial challenges in today's rapidly changing landscape, ranging from declining public funding to increasing operating costs and changing student demographics to evolving market dynamics.

And, like all organizations, the cost of running a university continues to rise due to inflation, increasing labor costs, and technology investments. Energy expenses, maintenance of facilities, research equipment, and library resources all contribute to the escalating operating costs that are straining institutional budgets like never before.

Meanwhile, changing demographics, including declining birth rates and shifting student preferences, also pose new financial challenges for universities, while the globalization of higher education has led to a surge in the number of institutions vying for students, research grants, and partnerships, which in turn means universities must invest more in their international marketing efforts.

Operational costs running out of control

Research earlier this year found that universities and colleges across the US now spend more on administrative expenses and other services than they do on teaching their students, something which is causing understandable concern within the industry.

“Most U.S businesses are doing tasks with fewer workers,” says Richard Vedder, an economist and distinguished professor of economics emeritus at Ohio University, who was previously director of the now-defunct Center for College Affordability and Productivity, an independent non-profit center in Washington, D.C. “But the number of (college) administrators has soared relative to the number of students and to the number of faculty, and there’s a corresponding increase in the cost of doing business.”

And as Forbes recently reported, four of the 14 universities currently in the Big Ten conference have revealed they are facing significant budget shortfalls - topping $100 million at two institutions.

Indirect spend – an area ripe for savings

However, there’s an area of universities expenses which is often overlooked that can yield immediate cost savings of 20% – an absolute goldmine in today’s economic environment – namely, indirect spend. That is everything a university spends on those all-important IT investments, as well as the marketing budget, facilities and property maintenance and outgoings, and other expenses such as HR services, and any consultancy work from outside experts.

IT is a crucial aspect of modern universities, supporting various functions such as infrastructure, software and hardware systems, networking, and cybersecurity and can take up to 15% of an institution’s budget in order to ensure effective administration, teaching, research, and communication.

Similarly, universities need first-class marketing programs not dissimilar to corporate companies so competitive is the HE market today. In fact, US-based universities are now spending billions of dollars each year to attract new students, according to this Washington Post article.

At most institutions, the bulk of these costs – which are likely to account for 30-40% of the overall budget – are unmanaged, meaning they are awarded to suppliers without any competitive bidding or transparent sourcing process to ensure that the best-fit provider is awarded the work. Instead most buyers will rely on the same incumbent supplier regardless of cost or performance, leaving substantial cost savings on the table.

Deliver instant savings with autonomous procurement

The reality is that to maximize your institution’s value from its indirect spend requires market knowledge that may be at a premium, or even completely absent from your org chart so you may have to contract for sector expertise from a management consultancy third party—adding to the very costs you are looking to curb.

Some universities may like to think they’re on top of all this and have a purchase order for every sourcing project which means that somebody approved the spend and the finance team got invoiced for it. So this must be a rational process with the right governance and approval mechanisms in place. But very little of this indirect spend is subjected to a fair and inclusive sourcing process – in our recent survey of global procurement leaders, only one quarter of respondents required a transparent, competitive buying model for their indirect spend.

But the advent of new AI-powered autonomous sourcing technology means universities, colleges and other HE institutions can now quickly and easily find the best-fit supplier for all of the above indirect spend requirements. This will deliver immediate cost savings of up to 20% through increased supplier competition, as well as 70% efficiency gains and 20X ROI.

Using this innovative technology, which incorporates generative AI throughout its model, stakeholders at universities are quickly guided through the process of defining their sourcing needs by the AI-powered bot which then presents a list of qualified, pre-vetted suppliers. Users can then negotiate with their preferred suppliers while taking advantage of intelligent insights to ensure they select the best provider every time.

Using AI to meet today's financial challenges

As this article in Forbes, by Michael Nietzel, President Emeritus of Missouri State University reports, colleges are already benefitting from the adoption of AI-powered technology in areas such as enrolment, student retention and donor targeting. There is no reason why they should not also benefit from the opportunity to better manage their spend, reducing OpEx and cutting costs with new efficiencies and greater supplier competition.

With the funding climate for universities and colleges set to become even tighter over the coming 12-18 months, those who act now to slash their indirect spend by 10-20% will be able to allocate more valuable funds to the vital staffing, research and long-term investment to position themselves at the head of an educational market that is more competitive than ever.

Check out how our Generative AI-powered bot, Glo, delivers 70% efficiency gains, 10-20% cost savings and 20X ROI.

CFOs, who are taking an ever-closer interest in the workings of their procurement functions, say cost control and cash accumulation are their top balance sheet priorities over the coming 12 months while, on a three-year timeframe, their focus is on technology, digital transformation and skill (Deloitte CFO Survey: 2022 Q4).

These imperatives mean companies should adopt truly autonomous procurement technology in contrast to the traditional sourcing suites, which lack automated workflows, leading to repetitive, manual work, while business stakeholders often work around procurement (unmanaged spend) with the subsequent lack of supplier competition leaving substantial cost savings on the table.

CFOs and other key decision makers should aggressively sponsor this digital transformation that will enable business stakeholders to self-serve quickly and easily, not only driving bottom-line improvements but also allowing procurement to focus on the more strategic aspects of sourcing to add wider business value.

The problem: Traditional sourcing tools do not meet present-day customer needs

Traditional sourcing tools are not utilizing AI in sourcing processes like the new breed of bespoke AI-centric players are and their generic approach with manual-driven legacy systems delivers low ROI and fails to maximize savings due to clunky UX, which limits the incentive for any budget owner to use them.

The Solution: AI-driven autonomous procurement

Modern sourcing solutions leverage generative AI technology to significantly drive productivity. A great example is Glo, a generative AI-powered bot that embeds intelligence into every step of the buying process and automatically helps define project requirements by having an interactive dialogue with the user, finds best-fit suppliers, provides negotiation insights, enables collaboration between buyers and suppliers, and more – driving significant business outcomes.

Leading global companies such as British Telecom and Santander Bank are ahead of the game as they have adopted the power of AI, using Globality’s technology to maximize returns on more than £3 billion annual spend each on the platform.

Cyril Pourrat, BT’s Chief Procurement Officer (CPO) and Chief Executive of BT Sourced said: “We want our people to have a consumer-grade user interface, which means you reduce the level of training. None of us have to take any training for the apps that we have on our phones – and the idea here is exactly the same. If there’s a user interface that makes sense, my team will have to spend less time being trained – and that’s a big win for me.”

The benefits: Savings, efficiencies and improved business outcomes

AI-driven platforms facilitate digital transformation of the sourcing process which enables businesses to benefit from faster speed to market, increase in ROI, TCO and the ability to maximize savings at every stage of the sourcing journey:

1. Increased sourcing efficiencies
Previously, sourcing tools could process and carry out 1-2 RFxs at one time but with AI/ML and NLP driving a truly autonomous procurement model there is no limit.

2. Improvement in ROI/TCO
Ensuring that all company spend is managed fairly and transparently will help solve the issue of maverick spend that plagues many organizations. Competition is especially important for indirect services, which are sourced differently from direct goods and typically do not undergo the same competitive bidding process. With business users now able to fully self-serve, autonomous sourcing enables procurement teams to spend more time on strategic, value-adding tasks or to increase their productivity levels, even with fewer people.

3. Ability to maximize cost savings
CFOs can work with CPOs to introduce AI-powered sourcing quickly and realize immediate results, including cost savings of 10-20%, to meet the challenges of today’s uncertain global economy. Leading enterprise companies are already realizing substantial savings across the indirect spend using advanced technology like Globality. As a whole, traditional sourcing vendors lack advanced automation, and AI/ML is completely absent in many tools.

Future of sourcing: “True” autonomous procurement via AI/ML

Company spend management is becoming more complex as the current market evolves; there is an urgent need for procurement and finance to work together and implement AI-driven strategic sourcing practices to combat continuing economic volatility. Democratization of the S2C process enables business stakeholders to truly self-serve while complying with guardrails put in place by procurement teams. True autonomous sourcing will enable procurement to add real value to the business as not only does it deliver immediate improvements to the bottom line but its people are no longer constrained by repetitive, manual processes and can focus on more strategic tasks that will help enable growth and foster competitive advantage. It is time for CFOs and CPOs to take the leap, think seriously about how their company is spending its money and create the urgency to automate its procurement model.

Check out how our Generative AI-powered bot, Glo, delivers 70% efficiency gains, 10-20% cost savings and 20X ROI.

The hype and excitement around generative AI shows no signs of abounding and rightly so –  it will transform the way we do business like nothing before. But with so much being written and said about this transformative technology and the breakneck speed at which new use cases are coming to the market it can be difficult for executives to understand how best generative AI can deliver immediate benefits across their organizations, reducing Operating Expenses (OpEx) and gaining the competitive advantage that is more important than ever in today’s volatile economic environment. For example, generative AI is optimizing organizations’ buying models to unleash productivity and purpose across their company spend. Read on to discover five key use cases where generative AI can transform outdated workplace processes and drive instant improvements to the bottom line.

1. HR: A better understanding of corporate requirements
Leading HR and performance management advisor Josh Bersin says that generative AI will radically change the HR Tech landscape. Not only will systems be intelligent by design, they will have powerful conversational user interfaces, they will embed multiple AI models, and new disruptors will appear. As a result, enterprises will better understand the role of skills, culture, diversity, pay, and other factors on improvements in hiring, development, internal mobility, job design, productivity, and growth.

2. Workplace suites: Increased productivity from leading providers
As you would expect, tech giants Microsoft and Google have wasted no time in implementing generative AI into their workplace suites to enhance user productivity. Microsoft CoPilot is integrated throughout the Microsoft 365 suite, summarizing long email threads to quickly drafting suggested replies and summarizing key discussion points from Teams meetings in real time. Similarly, Google’s Workspace helps users write, organize, visualize concepts, and accelerate workflows, enabling teams to get their routine work done faster and more accurately. Slashing the 80% of workers’ time which is consumed by repetitive low-value tasks and allowing them to focus on more productive, high-value tasks means teams can accomplish more with less resources – something all companies are under pressure to do currently.

3. Design: Create content more quickly with less resource
When it comes to product design, Adobe is enhancing its Firefly suite – using generative AI models to create and transform audio, video, illustrations and 3D models. It will help professional editors cut down on the repetitive elements of their work by automating tasks such as colour levels, after-affects and inserting placeholder images and music, allowing the humans to focus on the bigger picture – literally – and be more efficient in their output – creating more content, faster and with less resource required. As Adobe’s Vice-President of AI told Forbes, the company thinks that all content will be in some shape or form, edited through generative fashions in the near future.

4. Coding: Faster output to improve speed-to-market
Accenture has highlighted how, in IT, software coders are already using generative AI to significantly boost productivity—rapidly converting one programming language to another, mastering programming tools and methods, automating code writing, predicting and pre-empting problems and managing system documentation. As well as improving speed-to-market for new products and upgrades, this will once again enable companies to reduce OpEx as their teams’ output increases exponentially.

5. Procurement: Cut costs through autonomous sourcing
Surprisingly, the area where generative AI can make the most powerful impact – improving productivity and delivering substantial savings from day one – is one which is often overlooked: procurement. Using AI-powered technology to manage company spend buys eliminates the laborious and outdated manual sourcing models that most enterprises still have in place. Generative AI helps quickly and accurately scope briefs which are then instantly matched with the best-fit supplier at the right price, enabling a business to realize cost savings of 10-20% across its company spend from day one, with efficiency gains of 70% thanks to the ability of the AI-driven platform to automate the archaic RFP process in a manner which is much more effective and scalable.

New AI-powered tech key to gaining competitive advantage
Companies can reduce their OpEx immediately and achieve more thanks to the power of AI-driven platforms and tools. This will ultimately become the new normal for businesses with fewer people making greater impact thanks to this re-setting of the operating cost of each business function with much more automation. Those who act now will realize the benefits first and gain decisive advantage over their competitors.

Check out how our Generative AI-powered bot, Glo, delivers 70% efficiency gains, 10-20% cost savings and 20X ROI.

Over the years, PE firms have mastered the art of creating value for their portfolio companies through aggressive cost reduction, increasing operating efficiencies and reducing headcount where necessary through outsourcing of back-office functions, the streamlining of processes and optimizing supply chains. But after years of rationalization, many firms have started to exhaust this low-hanging fruit along with the option of merely cutting budgets as the typical cost-saving options. The reality is that costs are going up and will continue to go up—inflation is a rising tide which figuratively raises all boats—starting with unit prices and finding further savings in the future will be a much harder task for even the most focused of firms.

Furthermore, cutting departmental budgets within portfolio companies is now only having the effect of making it harder for leaders within those businesses (CMOs, CTOs, CHROs etc) to deliver the impacts they are charged with. The only way of reducing overhead is to look at other parts of the enterprise which can produce savings if better managed. As EY recently revealed, the pressure on PE Firms is arguably even greater, as they also face falling price multiples and higher financing costs, propelling a need to maintain EBITDA levels and adding greater urgency for further cost improvements.

FOCUS ON INDIRECT SPEND TO REDUCE OPEX

But the good news is there is one area, ripe for immediate cost savings, that is often overlooked by finance chiefs of enterprise companies—better managing a company’s indirect spend. The amount of indirect spend is typically around 20% to 40% of revenue, and is usually classified as Selling, General and Administrative expenses (SG&A). As this report from Alvarez and Marsal highlights, there are big savings opportunities for mid-sized companies from their indirect spend—uplifting EBITDA by between 0.4 and 2.0 percentage points, which equates to circa US$20-25 million in savings for a US$1 billion revenue company.

Autonomous sourcing allows you to manage this spend more efficiently, delivering instant savings through the automation of the previously manual process of running Requests for Proposals (RFPs) via spreadsheets and emails. This transformation enables leaner teams to do more with less, while reducing speed-to-market from weeks to days and increasing supplier competition to drive down the prices you pay for all your indirect services from day one.

SELF-SERVE SOURCING TO HELP DRIVE GROWTH

With autonomous sourcing, business stakeholders can self-serve through an AI-powered platform rather than labor-intensive procurement teams managing the process for them. Instead, smaller procurement teams oversee the process, ensuring guardrails and compliance are in place, while focusing their time on more productive, strategic tasks that add wider business value and drive growth across the enterprise.

So with nothing left to squeeze out of supply chain costs or departmental budgets, and the workforce already trimmed back as far as it can go, private equity owners should prioritize indirect spend within their portfolio as the area where they can optimize costs quickly and effectively. One reason that most c-suites aren’t already doing this is that it’s traditionally been very hard to get real transparency into that ambiguous “20 to 40%” bucket. However, times are changing. With the help of data at scale and especially the application of machine learning, new and better ways of sourcing even the most bespoke indirect spend is available and deployable now.

By adopting new technology to ensure that all third-party spend is tendered fairly, competitively, and transparently, companies are instantly able to get more visibility, control and assurance of buying the right goods and services at fair market prices across all of their expenditures. Legacy procurement processes and technology mean that many employees simply bypass the designated systems and engage in unmanaged spend as they need to be able to execute their jobs in the marketing, R&D, technology, human resources, real-estate and other functions in the company with a reasonable degree of speed and simplicity.

Globality's 2023 research for CFOs found 82% of procurement leaders say their indirect spend is not well managed during the sourcing process, leaving substantial cost savings on the table. But forward-thinking companies have identified autonomous sourcing as the answer to this conundrum—the user-friendly, consumer-like experience means using this technology for all company spend above a certain threshold is one mandate that their workforce is happy to embrace.

DOUBLE-DIGIT SAVINGS FOR GLOBAL ENTERPRISES

Leading global companies like BT and Santander have partnered with Globality and leveraging advanced AI technology to avoid overbuying and saving 10-20% on their billions of dollars of indirect spend across categories including marketing, IT and hardware, legal, HR, property management and construction. As they have already discovered, when the transformative power of Generative AI meets autonomous sourcing, the use case is compelling and it accelerates automation further and faster to cut costs and deliver ROI even more quickly.

And there’s other good strategic reasons for PE firms to mandate the adoption of this new technology across their portfolios. Digital transformation is seen as an increasingly important value creation lever that can help portfolio companies increase cash flows and profitability. A recent survey from KPMG revealed that investing in game-changing digital solutions such as autonomous sourcing will double in importance over the next three years for private equity firms.

ADDING VALUE TO YOUR PORTFOLIO COMPANIES

Successfully implementing a buying mandate across a PE firm’s portfolio means substantially more spend at each company will be managed by technology with streamlined processes and more competition through a transparent, inclusive sourcing process that immediately drives costs 10-20% lower and increases efficiencies by up to 70%. Thanks to the intuitive, user-friendly experience, PE firms who invest in autonomous sourcing solutions will find that mandating their use is far easier than has often been the case in the past and that their portfolio businesses will not only realize value from day one but also be better positioned to improve the bottom line in the long term.

Check out how our Generative AI-powered bot, Glo, delivers 70% efficiency gains, 10-20% cost savings and 20X ROI.

You can’t watch a news broadcast or flick through your social media feed or without seeing and hearing about generative AI, and how it will transform the way we work, bringing new efficiencies and enabling people and teams to accomplish more. According to this report from Accenture, 98% of global executives say that AI-driven platforms and tools will play a key role in their organizations over the coming years.

But how exactly is this game-changing technology going to affect procurement and what does every sourcing leader need to be aware of so that they can ensure they are ahead of the curve when it comes to using generative AI to improve and enhance their buying model? Read on to find out the top three things that you must know to ensure your company gains competitive advantage at this pivotal moment for procurement:

1. Learn fast – Deep dive into generative AI use cases in procurement

As we find ourselves at what must be the peak of the generative AI hype cycle, it is crucial to have a clear understanding of the benefits of this new technology for the sourcing function and how utilizing it effectively will enable companies of all sizes to better manage their spend, delivering new efficiencies and savings. Familiarize yourself with the way in which Generative-AI powered technology can engage in conversations and assist in answering procurement-related questions, while guiding users along the right buying path, considering various sourcing types and leveraging deep category expertise to create best-in-class project briefs quickly and easily.

When researching vendors who are utilizing generative AI, it is also important for procurement leaders to ensure that 1: the software’s infrastructure is reputable and enterprise grade such as MSFT Azure and 2: the user experience is where AI provides suggestions and it is up to the users (whether a procurement team member or a business stakeholder) to make the ultimate decision giving them the ultimate control.

2. Go hands-on – Experience the power of AI in procurement

The best way to truly understand the transformative potential power of AI within procurement is to dive right in and experience how bots that Gartner describes as Cognitive Procurement Advisors (CPA) or Virtual Personal Assistants (VPAs) leverage Natural Language Processing (NLP) to increase automation and deliver new sourcing efficiencies and increased productivity across the buying process. 

For example, Chief Procurement Officers who have implemented GLO’s generative AI capabilities share how they have catapulted into the future to drive productivity and purpose and how they consider GLO to be their new virtual team member. 

As AI bends the productivity curve by introducing new efficiencies, capabilities, and insights into every aspect of a business’ operations, procurement as a function has a unique opportunity to make huge impact by using this new technology to automate and optimize a company’s spend to advance its mission and purpose.

AI-first applications that are well-developed, with exceptional user experience (UX), should enable you to quickly try them and experience their value. This eliminates the need for lengthy traditional assessment processes when evaluating enterprise solutions. Being hands-on and familiar with the technology will also enable you to advocate within the organization, influencing and driving successful adoption leading to improved business outcomes more quickly.

3. Act now – Don’t be left behind

The power of generative AI far outweighs any previous technological advances – we are experiencing an acceleration in software innovation and adoption unlike anything seen before. Adopting a wait-and-see approach is not an option in this case as companies who fail to seize the moment and start utilizing generative AI right away will fall behind their competition – and with the potential of the technology to deliver dramatic savings and increase efficiencies many times over, if you fall behind you won’t be able to catch up on this occasion.

With the arrival of generative AI, this technology is no longer seen as a futuristic concept but rather as a vital tool for businesses to stay relevant and competitive in an ever-changing and challenging landscape. Gartner’s recent research revealed that 70% of companies are already experimenting with generative AI use cases and leading companies including BT and Santander are using our AI-powered platform to deliver double-digit cost savings across more than $3 Billion of their indirect spend. 


If you are interested in seeing a compelling generative AI use case for procurement and how enterprise companies are already utilizing it to deliver cost savings and increased efficiencies, reach out to us here.

What is really exciting about being in procurement is the influence that you can have and the opportunity to make a difference using the external spend that you control. Leverage is the bedrock of procurement and the whole reason we exist. Traditionally, we have tried to use that leverage to minimise risk, ensure compliance and get the best prices ,but today we can add a new goal – helping to foster gender equality throughout our global supplier bases.

At Logitech, equality and the environment are our two core values. A lot of global companies are doing very well on the latter and making great progress on targets such as Net Zero and becoming carbon neutral. Conversely, in terms of equality, particularly gender equality, things have gone backwards since the pandemic hit, and there is a danger this consideration falls further down the list of corporate priorities.

PRIORITIZING GENDER EQUALITY

We can certainly learn from the way in which businesses have aligned around the need for collective action on climate change and the environment. Leading companies all know what their aspirational environmental goals are but if you asked them when they are going to be gender equal, most wouldn’t have a clue. So we badly need equality goals similar to Net Zero that can focus minds at the biggest global organizations.

At Logitech, we want to work harder not just on making our supplier diversity programme deliver results but also influencing other companies to commit to equality with similar energy to that they are focusing on environmental objectives. Most companies currently spend around 6% of their supplier spend with diverse suppliers, so that leaves this huge untapped opportunity with the other 94% of your supply base. And the reality is that we are not going to replace all of our large suppliers with diverse suppliers because in an industry like ours – technology – we have to partner with large organizations that have millions of employees and accrue trillions of dollars of revenue each year.

So the key question for my team and I is: How can we influence these huge peer companies to commit to equality and diversity in the way that we do? The way to achieve this was through the power of collective action – the Coalition For Gender Fair Procurement which we recently launched. Gender Fair was formed in 2016 to assess companies in the B2C sector on equality with the aim of influencing consumers to spend their money with businesses that have women in senior leadership positions, family-friendly employment policies and break stereotypes with their advertising.

USING OUR PURCHASING POWER FOR GOOD

We came up with the idea of doing something similar in B2B procurement. With the huge spend in this area, we can have influence and drive progress towards gender equality, especially if enough companies group together and put pressure on their suppliers to commit to these goals. The founding coalition of companies, including Logitech, manages around $15bn USD in spend so that’s quite a bit of weight to throw around for good.

We have gone to each of our high impact (high headcount, high revenue) suppliers and asked them to take the Gender Fair assessment, create an action plan and put it into place, thus becoming an ally with us on this journey. We want our suppliers to work with us to help create a more equal society and this is a great lever to make that happen. If just Logitech had done that, it may have some effect but it would have been limited. By joining together with other like-minded companies we can have a much greater impact and drive change quicker and more effectively.

We are hoping the coalition will grow quickly next year to more than $100bn USD spend under management and that will increase the weight of pressure on suppliers to commit to these gender equality goals. I don’t think they will have a choice if it is not just Logitech asking them to do so, but half a dozen or more of their other global customers too.

As we head towards recession, understandably there is a temptation for CEOs to abandon D&I goals and just focus on guiding their company through the tough times that lie ahead but this is exactly the wrong approach. In fact, it’s time to double-down on gender equality.

LEVERAGING AUTONOMOUS SOURCING TECHNOLOGY

The final piece of this puzzle is to ensure internal buy-in and make our business stakeholders willing to engage with suppliers who are committed to these equality goals. Logitech is quite an autonomous company and if people feel that our purchasing model hinders rather than helps them, they will bypass us and simply use whichever suppliers they want, regardless of whether they are committed to equality.

So the key for procurement is to provide a seamless, user-friendly experience which makes the business stakeholders’ lives easier and makes them want to work with us to find the best supplier for each project, ensuring that the list of providers they are offered includes diverse options. New technology is the way to make it easy to drive gender equality and at Logitech, Globality, our agile sourcing platform, delivers a consumer-like interface which our business stakeholders love.

Using the platform, our teams can scope their buying needs quickly and easily, and are instantly matched with not only the best-fit suppliers from preferred provider lists (with diverse suppliers labelled for easy viewing) but they also offered a selection of fully-vetted diverse providers as alternatives. With the user-friendly interface, buyers can quickly compare the shortlist side-by-side, see which options support diversity and make informed, merit-based decisions on which supplier is the right one for that particular sourcing requirement.

Having immediate access to this broad base of diverse suppliers means we can benefit from the new ideas and perspectives they offer, which can be a crucial competitive advantage in today’s challenging economic environment.

The platform’s intuitive user experience, supported by the relevant intelligent data insights, encourages our stakeholders to partner with us so together we can drive this positive societal change that ensures companies put gender equality back to the top of their agenda, benefitting both themselves and the global economy as a whole.

Globality has been revolutionizing the buying process with sophisticated AI technology to deliver on its autonomous sourcing vision for years. Just as ChatGPT has created waves in the B2C space, our AI bot, Glo, has already taken the enterprise world by storm, with several companies transforming how they source by going autonomous. It’s exciting to witness the rise of AI tools like ChatGPT that are now accessible to consumers. This development has made Globality’s work in the B2B space even more relevant because we have been way ahead of the game, utilizing AI technology for years to drive value for our enterprise customers.

The Enterprise World Loves Glo for its Current AI Capabilities

Our customers love the interactive dialogue experience with Glo because it guides them step by step to make the best decisions for every sourcing need across billions of dollars of their company’s spend. Glo uses natural language processing to understand the complex intent of strategic high-value projects and accurately scopes project requirements. Our AI engine provides best-fit suppliers derived from unbiased multidimensional analysis and delivers meaningful negotiation insights to make better data-driven decisions. The response from our customers, ranging from CFOs who have sponsored the technology to procurement to business stakeholders who use the platform, has been overwhelmingly positive.

Unstoppable Advancement of Glo with the Power of Generative AI

With the momentum around generative AI gaining speed, Globality has explored compelling use cases to empower users with an unprecedented level of automation in sourcing. Let’s take a closer look at how Glo leverages generative AI to deliver even greater value to enterprise companies.

Glo creates briefs for you faster and better than anyone else

Glo uses GPT capabilities to analyze any long-form text and rough notes you bring from your project planning sessions and automates the rest of the process for you. As Glo asks relevant scoping questions, you can with a single click accept or reject its high-quality suggested answers.  The result is a dramatically faster process of writing a professional brief that can immediately be sent to best-fit suppliers, allowing you to get to market faster.

Glo curates your short phrases and converts them into meaningful project specifications

While scoping your project, input your short-phrase answers, and let Glo curate and suggest relevant options.  Glo will recommend a polished, more complete version of your short phrase answers, as well as a detailed version based on its understanding of your company and your past projects. This allows you to save a significant amount of time and lets Glo do the heavy lifting of articulating your ideas.

Glo gives scoping insights by engaging you in a thoughtful conversation

If you are unsure how to respond to a question about a topic you’re not fully familiar with, Glo can help. With its deep category expertise, Glo can engage in a thoughtful conversation with you and provide insights on the topic. This enables you to move forward with confidence, having gained deeper knowledge in that area, and ensures that your specifications for suppliers are thorough and accurate.

Globality’s AI-powered platform empowers enterprise companies to achieve significant cost savings and enhance operational efficiency. With granular scoping, intelligent analysis, and increased supplier competition, companies can avoid overbuying, reduce costs and operational expenses, and improve governance. Furthermore, Globality’s constantly learning AI engine enables companies to generate compounding returns from their spend data. By harnessing the power of generative AI, Globality is setting a new standard in autonomous sourcing by delivering exceptional value.

If you’re interested in witnessing Glo’s capabilities firsthand, don’t hesitate to get in touch with us. We would love to showcase our current offering as well as what’s in the pipeline. 

As 2023 approaches, we have identified five trends that will result in companies reimagining procurement within their organizations as they contend with economic challenges in the year ahead.

"Enterprise companies have a great opportunity to ensure that their balance sheets remain strong amid inflation by taking a closer look at indirect spending," says Keith Hausmann, CRO at Globality. "In the year ahead, as the C-suite looks for more levers to minimize expenditures, this is the chance for procurement to embrace modern, intelligent buying systems and digitalization to optimize indirect spend, deliver new sources of value, and improve spend efficiencies to meet or even exceed business goals.

Our recent webinar, organized with Art of Procurement, highlighted how companies need to provide a better user-experience for their business stakeholders to encourage them to work with procurement rather than around it. If procurement can engage earlier in the sourcing process with its internal partners, then it will reap the benefits through more spend coming under management and be able to increase its influence across the organization, driving better business outcomes. Here are five key takeaways from the session:

Procurement leaders have, for some time now, found themselves under growing pressure to inject a greater degree of flexibility into operating models and offer their stakeholders an improved, consumer-grade user experience. The impact of the pandemic and subsequent soaring inflation has only added to this pressure, forcing procurement to shift its focus toward finding new ways of increasing the resilience and agility of its processes and operating models. Ultimately, the recent events have served as a wake-up call for CPOs everywhere and while, agility has always been important to the success of procurement, it has now become a, if not the, top priority.

The key to injecting more autonomy and agility into procurement is to take the functions’ operating processes, historically manual and time-consuming with employees spending countless hours on administrative tasks—and design them to be user friendly, completely digital and intelligent. Not only does this increase efficiency and enable procurement to do more with less but it also delivers new real-time data and greater insights, which will help CPOs respond more quickly and efficiently to meet future unexpected challenges and maintain a competitive edge, even in times of uncertainty.

Agile value chains are heavily reliant on businesses having access to the intelligence that will allow them to respond immediately to both internal and external changes. As has been highlighted by the recent disruption, the use of AI to automate a company’s core processes is critical to its ability to achieving better and faster results. By reimagining current capabilities and embedding intelligent insights into a company’s business processes, it will allow both procurement teams and business stakeholders to access and act upon valuable information and insights, driving better outcomes across the entire organization.

By leveraging the innovative power of AI through digitalization, procurement can maximize outcomes for indirect spend and benefit from an autonomous sourcing process that has three main elements:

• Digitalization allows procurement to do more with less, generating 60-70% productivity improvement, bringing 30-40% more spend under management, and delivering 10-20% cost savings, which together leads to more than 20 times ROI through an inclusive, competitive and transparent sourcing model.
• Moving more spend to self-service without sacrificing any aspect of compliance or risk management drives and multiplies these operating efficiencies and cost savings, while freeing up procurement talent to become business advisors and relationship managers, focusing on more value-driven strategic tasks such as supplier collaboration, innovation and R&D.
• Creating a consumer-grade, intuitive experience that delights business stakeholders will not only bring more spend under procurement’s control but also increase the function’s influence across the organization and will help to earn that long-talked about seat at the table.

Forward-thinking CPOs are already adopting new technology that can optimize the sourcing process and enable their teams to operate in a more agile manner. With an intelligent, autonomous sourcing platform like Globality, business stakeholders are guided, step-by-step through an intuitive interface by our AI advisor Glo, helping users to make the right decisions and connect with the most valuable supplier quickly and efficiently. This new intelligent and agile approach will enable procurement to deliver better business outcomes and help companies not only survive but also thrive during the current uncertain economic times we are living through.

With news of the US economy shrinking for a second straight quarter, recession fears are becoming all too real, and companies are preparing for the worst. As Sal Guatieri, Senior Economist at BMO Capital Markets, explains, “The economy has quickly lost steam in the face of four-decade high inflation, rapidly rising borrowing costs, and a general tightening in financial conditions.”

During the uncertain times that lie ahead, businesses will need to prioritize agility, making quick decisions and changing direction when required. In a LinkedIn poll, we asked procurement professionals how they thought their companies would change spending plans over the next three to six months, and the results were unequivocal: 55% expect their companies to significantly cut spending during this period, while a further 18% also expect to see smaller spending cuts at their organizations.

One area that has already been impacted by budget cuts is staffing. As Business Insider reports, a “wave of layoffs has swept across American business in 2022.” As they navigate their way through these turbulent times, many companies will be forced to do more with fewer employees, and will need to quickly tap into new expertise, often in areas they are unfamiliar with, to fill in any gaps. Procurement can help connect business functions with the best specialist external talent at affordable rates, but to do this, companies need to harness cutting-edge digital technology.

Automation fills in key gaps left by team reductions as AI takes over the repetitive manual work that is crucial for everyday operations but that team members no longer have the capacity to carry out, such as traditional RFPs, a slow cumbersome process. Digitalization drastically shortens the time required from scoping a sourcing need to awarding the work from months to days, or even hours, maximizing efficiency gains for the smaller teams many CPOs will find themselves leading.

While adopting new technology hasn’t always been straightforward, today’s digital technology can be implemented with ease. Digital transformation will not only allow procurement to do more with less people, but also empowers business stakeholders to quickly and easily identify the right suppliers for every need as they seek to meet the inevitable new challenges that lie ahead.

Learn more about how procurement can add more value to the business even with leaner teams.

B2B services have long been the final frontier for digital transformation due to the difficulty in defining in clear terms the complex variables involved, but innovative technology is now enabling seamless buying processes that mirror the value creation and intuitive user experience that has existed in the B2C sector for more than a decade.

As such, the transformation of the B2B services sourcing model into a modern, agile, real-time marketplace that forms 90% of leading global companies’ spend is inevitable. At the recent World Procurement Congress, Globality brought together a group of procurement leaders together to discuss how these new marketplaces can revolutionize the way companies source services, with five key takeaways emerging:

1. Prioritizing user experience

New B2B marketplaces should deliver a top-notch user experience no different from those we experience in our everyday lives with B2C marketplaces, such as those Amazon, Airbnb, eBay and Alibaba have created. Whether a seamless interface with a core end-to-end solution or part of a new best-of-breed ecosystem, the entry point into the marketplace should be obvious and intuitive, with NLP then helping scope the user’s needs and providing instant access to all the requisite buying information.

2. Broadening the supplier base

The freedom to use a B2B marketplace helps procurement overcome some of its traditional perceived boundaries around standardization specifications and pre-priced items, enabling companies to tap into an inclusive market of highly qualified, suppliers. This new sourcing model not only removes bias and improves compliance and transparency but also creates a merit-based pool of potential new suppliers, which increases D&I, encourages innovation, and helps build a fairer, more equitable global economy.

3. Adding strategic value

AI-powered marketplaces enable companies to source high-value, complex indirect services by empowering stakeholders to do what historically has been procurement’s responsibility. This not only makes the sourcing process more efficient but also gives users visibility across both their internal ecosystem and the broader external supplier ecosystem. The result is much improved collaboration between different stakeholders while also freeing up procurement teams to tackle more strategic tasks and initiatives that add greater business value.

4. Getting a mandate

It can be a challenge for procurement to dictate what the buying experience should look like versus the traditional decision-making power business users have in dictating the organization’s buying process. Transformative procurement leaders are utilizing broader company initiatives such as ESG, inflation mitigation, or supply chain resilience as a mandate to implement an inclusive, transparent, fair, and competitive AI-powered marketplace across their organizations.

5. Seizing the moment

In calm waters, fear of failure often outweighs the argument for change, but in the current tumultuous economic and geopolitical environment, the risk of simply carrying on as before is actually greater than that of trying something new. The concept of marketplaces and empowering business stakeholders is new in B2B sourcing and can feel daunting, but the real danger lies in not engaging in new thinking and being left behind as other companies seize the opportunity to transform their operating models to gain competitive advantage.

Tough times ahead

According to a recent article by Bloomberg, the US economy is starting to show signs of strain under the weight of the highest inflation for decades and climbing interest rates – raising the risk of a downturn. Many of the world’s top economists also see the storm clouds on the horizon. Ethan Harris, Head of Global Economics Research at Bank of America Corp., says: “We’re either going to have a weak economy or a recession.”

In an economic downturn, every business will need to prioritize agility – being able to make quick decisions, take immediate actions, and change direction when required. One of the main areas where this agility will be required is staffing. Companies will be forced to do more with fewer employees, which can slow down progress and hinder growth. With the global economy having enjoyed good times for the majority of the past decade, the impending slowdown will mean businesses having to meet unfamiliar and different challenges. Many will lack the capabilities within their internal teams to do so and will need to quickly tap into new expertise, often in areas they are unfamiliar with.

Using AI to sustainably eliminate the gaps

With staff cuts inevitable across most sectors, procurement will have a crucial role to play, connecting business functions with the best specialist external talent at affordable rates. However, companies need to harness cutting-edge digital technology to enable this. Advances in AI have made it possible for procurement to tackle more complex processes and categories of spend with leaner teams, while helping business stakeholders to find the right suppliers for their changing needs quickly and easily.

Automation fills in key gaps, as AI takes over the repetitive manual tasks that are crucial for everyday operations, but that team members no longer have the resource to executive efficiently such as traditional RFPs, a painstaking, antiquated process, with cumbersome steps. The new streamlined, modern experience drastically shortens the amount of time required from scoping a sourcing need to awarding the work from months to days, or even hours, maximizing efficiency gains for the inevitably, smaller teams many CPOs will find themselves leading.

Immediate cost savings

Of course, the benefits of automation extend beyond time savings. As storm clouds gather on the horizon and belts have to be tightened, thoughts inevitably turn to how companies can cut costs as quickly as possible. Innovative technology enables companies to generate immediate cost savings through precise scoping of specifications with AI-powered category expertise, while managing demand efficiently to prevent overbuying.

And opening up sourcing projects by increasing competition among both preferred suppliers and new alternatives not only ensures fairer, merit-based matching processes but also delivers significant cost savings of more than 20%.

Technology to free up talent

With sophisticated AI-powered technology, there is no future where a company’s best talent should be spending time on spreadsheets, email, or outdated legacy platforms that haven’t changed in 20 years. The value that people bring is based on a combination of contextual understanding, experiences, and emotional and raw intelligence. As companies think about maximizing the impact of their leaner teams, employees’ skills and capabilities should be reprioritized away from manual repetitive work toward more strategic initiatives that add wider business value.

In procurement, this means becoming relationship managers with business stakeholders and suppliers; consultants and trusted advisors with deep business understanding; or problem solvers who have the flexibility and innovative ideas to meet the new challenges a recession always throws up.

Time to act is now

Digitalization can no longer be put off. Adopting new technology has historically been daunting but modern digital solutions can be implemented and adopted with much simpler change management programs. This transformation will not only enable procurement to do more with less people within its own teams but also allows business stakeholders to quickly and easily identify the right suppliers to meet inevitable new challenges that lie ahead – a win-win combination. But procurement leaders must use these uncertain times as a catalyst to drive this long overdue digital transformation that will position their companies to successfully navigate the rocky road ahead, while laying the foundations to build long-term value.

Learn how procurement can reduce costs and overcome economic challenges using Globality. Or contact our team to schedule a demo.

We live in uncertain times, and procurement leaders understand that they need to modernize their processes to make the function more strategic and valuable in the digital age. But in many cases, they are constrained by both internal and external factors. Below are four of the major challenges procurement currently faces and how digitalization can help companies solve them.

1. Building a resilient operating model

New technology connects internal business stakeholders, partners, and suppliers remotely, making real-time collaboration seamless and enabling companies to pivot quickly and react to the fluid, volatile geopolitical situations we have experienced over the past two years.

AI-powered sourcing builds vital agility and resilience into supply chains and value chains. Enterprises no longer have to rely on suppliers in a single location or even a single country, minimizing operational and geopolitical risks. Although businesses were traditionally limited to a specific number of suppliers and service providers, often in the countries in which they did business, technology has now made buying services and goods from everywhere a real proposition.

2. Solving the talent crisis

Leaders across all functions, including procurement, face the challenge of retaining their top talent while trying to attract the best fresh blood. They must organize their teams in new ways to ensure the most productive employees – those with the right emotional intelligence and relationship-building skills – can focus on the highest value work while simultaneously tapping into the marketplace of service suppliers for new sources of innovation and talent.

Innovative digital technology allows companies to scale quickly and take advantage of fast-changing markets without having to recruit large numbers of new employees. At the same time, cutting-edge platforms and solutions can also help attract the cream of today’s workforce, who expects a seamless, consumer-like experience in their professional as well as their personal life.

3. Eliminating bias

A major problem with many procurement processes is that a company’s business stakeholder simply uses the same incumbent supplier or supplier they “know” and have bought services from for years. But do parents invest in their children’s college education without evaluating multiple choices? Would consumers buy a new car or a new home without researching consumer feedback or comparing the price with alternatives?

If a business stakeholder just chooses a given supplier whom they know personally, not only are they creating bias in the value chain, but they are missing out on generating value through an inclusive, transparent process. Conversely, when companies create a competitive market among suppliers, it not only generates cost savings but also leads to new ideas and innovative solutions.

AI-powered technology enables this fair, transparent, and competitive market by selecting supplier characteristics to include during the scoping process. With real-time matching, companies can instantly identify qualified, diverse suppliers, invite them to submit proposals, and then easily compare and assess their options side by side.

4. Leading the ESG agenda

ESG is one of the most pressing considerations for global business, offering procurement an unprecedented opportunity to demonstrate the value it brings to an organization. Previously, many CPOs believed they could not be game changers, but procurement leaders now have the tools to become the key drivers of overall company performance, helping create a better world with greater environmental sustainability, more inclusive economies, increased transparency, and better corporate governance.

By digitalizing and democratizing the sourcing process, companies can help create more inclusive economies in the 100-plus countries in which most global enterprises operate today by matching business needs with highly vetted, inclusive options from a network of their own and other qualified suppliers.

Procurement can overcome each of these different challenges through the adoption of innovative AI-powered technology, but forward-thinking leaders must act now to enable this transformation before the moment passes.

New innovations are being developed every day, powered by AI and other leading technologies. While it can be difficult to keep up with what’s state-of-the-art, and to separate the flash-in-the-pan tech from the tech that is truly revolutionary, one thing is certain: Traditional solutions cannot deliver the expected speed, efficiency, and results on their own without newer innovative platforms.

As technology becomes more complex, IT must leverage systems that are intuitive, user-friendly, and speak to the specific requirements of different departments. While one system may be right for one team, it likely won’t be the best choice for another. Rather than rely on an outdated one-size-fits-all solution that doesn’t yield results, best-of-breed AI procurement technology can ensure that businesses see greater value.

Globality’s Keith Hausmann explains: “End-to-end platforms pieced together with acquisitions of varied solutions tend to lose their innovative edge and focus, whereas built-for-purpose solutions are nimble and bold enough to unlock greater value.”

Many IT departments know this, but they are slow to adapt due to fears of failed integrations. As a result, they stick with what they know. But without robust, consumer-like procurement processes and approaches, including the untapped area of strategic service spend and supplier management, IT cannot succeed.

With Globality’s prescriptive methodology and flexible infrastructure integrations can take weeks, rather than months. Globality simplifies integrations, importing only the required master data for necessary validations, reducing dependency between platforms. Well-designed and optimized Standard connectors offered by Globality supports common business processes and systems, accelerating the pace of implementation without compromising necessary flexibility of customer configurations.

For highly customized or uncommon business processes, Globality offers a comprehensive set of Public APIs providing access to business-critical data in an efficient manner, leveraging technology like Webhooks. “We are in the business of making integration simple, productive & delightful for the digital procurement ecosystem of the future” explains Mangesh Phadke, VP of Digital Ecosystem at Globality.

AI-powered sourcing provides a frictionless and compliant environment for procurement and business users. Globality’s AI technology complements existing systems, and key API integrations can ensure different systems are speaking to each other to avoid over-complexity. This empowers the digital procurement ecosystem of the future by enabling enterprises to reshape sourcing, introduce sourcing autonomy, and enable a seamless source-to-pay user experience. The benefits are overwhelming:

• Seamless entry into Globality from buying portal like Ariba Guided Buying via SSO
• Automation of project creation in Globality post triaging via inbound Public API seeding with key information driving user journey on the platform
• Self-serve sourcing for business users, from managing demand to awarding work
• Elimination of manual downstream procurement activities by easily connecting Globality‘s Platform to SAP Ariba and Fieldglass with enterprise-class extensions validated by SAP
• Streamlining Contract creation in CLM solution of customer choice transferring rich set of information captured during sourcing process on Globality Platform

Many Globality clients have already benefited. Santander Group Company, Aquanima is one such customer who has optimized its procurement process by combining its core SAP Ariba system with Globality’s platform, resulting in faster, more effective, and more informed sourcing decisions.

Ultimately, technology must meet the unique needs of different spend categories, satisfy and empower internal stakeholders, and support complex analytical requirements. Only a best-of-breed procurement ecosystem that is oriented around user experience, data and analytics can support your organization’s continued evolution.

Learn how Globality seamlessly connects to a preexisting procurement workflow.

Marketing is a highly complex discipline. It’s rooted in human emotion but increasingly played out in data-driven environments. Those environments provide a rich source of information that can tell us so much about the people marketers are trying to target – and indeed can make sense of what motivates them to buy.

This data-rich environment means that the marketing ecosystem has become more demanding. The function must coordinate the complex interplay between technology, agencies, and capabilities to support the various activities across omnichannel touchpoints. Doing this effectively, at scale, and to budget increases the complexity of sourcing the right marketing services. So how can technology help?

1. Overcome sourcing complexity

AI’s ability to manage complex data sets and to interpret intent means it’s ideally placed to help CMOs source the services they need. Typically, comparing, contrasting, and marrying the needs of campaigns with the services marketplace is time-consuming and inefficient. It’s also blurred by human bias and limited visibility.

An AI-driven buying platform cuts through that. By giving marketing the ability to precisely define service criteria per campaign and then match them with the right supplier, it reduces sourcing time, improves search accuracy, and enhances agency performance.

Moreover, by helping marketing to easily define complex requirements and compare proposals, the RFP process is accelerated. With the best fit agencies and services secured faster, speed to market is quicker, and so too is product launch. The net result is better support of R&D, growth of top-line revenue, and the ability to rapidly action new campaigns.

2. Support the ESG agenda

As organizations move to be more socially and environmentally conscious, the need to communicate ESG credentials is growing. For CMOs that’s an opportunity to effectively demonstrate the organization’s commitment in this area – and one that they can take a lead on too.

As has become increasingly clear, there are many hidden risks in your value chain. Organizations engaged in malpractice, human rights exploitation and unethical behavior can be hard to spot. To buy services and goods from those organizations is to support that behavior – even if it is unwitting or by-proxy. To that end, clear visibility over your value chain is essential.

AI supports that transparency by sourcing service providers that adhere to a strict set of criteria aligned to your ESG policy. By analyzing KPIs, commitment to ESG standards, past performance, reputation, and financial governance (among other criteria), AI can rapidly identify service providers that meet the needs of the organization.

And by basing selection on data-driven fact, it removes innate human bias and thus creates a meritocratic sourcing process that further support ESG efforts.

3. Influence ESG policy

There’s greater pressure than ever for marketing to play a key role in business strategy. In fact, Deloitte’s CMO Survey 2021 found that more than half (58.7%) of marketing leaders surveyed report increased pressure from CEOs. That is, in part, down to a bigger focus on Diversity, Equity, and Inclusion (DEI) and ESG. CMOs must double down that if they’re to compete in modern markets and improve performance.

How does technology facilitate that? Most marketing departments have purchased from the same suppliers or connections for years, which limits their ecosystem. Ironically, the number one reason they do not want to go through a procurement process is because it’s slow and inefficient, so it’s easier to simply buy from the same old suppliers. Conversely, using an AI-driven procurement platform allows them to efficiently evaluate and distribute marketing spend among diverse, equitable, and inclusive suppliers.

In real terms, it means that marketing can play an influential role in the enterprise by enabling fair, competitive and sustainable self-serve sourcing, and fostering relationships that drive better ESG practices.

4. Unlock talent

It’s a given these days that AI will relieve workforces of monotonous and time-consuming tasks so that they may pursue more creative and productive work. How that plays out has been less obvious. One way, according to Forrester, will be through rapidly processing swathes of data to produce unique insights and spur innovative ideas. In that way, they say, AI will augment people’s creativity by helping them to think differently.

In turn, AI has the potential to foster new relationships in the organization too. The capacity to identify insights and spur ideas will connect departments across the company, allowing talent to collaborate and innovate in new ways – the net result of which is a democratizing of business opportunities. Specifically, in marketing, AI helps innovative solutions be democratized, unlocking hidden gems and reinforcing best practices.

As the complexity of marketing increases, the need for CMOs to bridge the skills gap within their teams is also becoming more important. For those that are looking to bridge that gap through outsourcing, an AI-driven buying platform offers the perfect solution. Its ability to precisely define required skillsets, map to relevant projects and match agencies/services in real-time improves sourcing efficiency and accuracy. It also means that requisite talent is onboarded quickly, improving the delivery and quality of projects.

5. Cut costs and deliver value

According to Forbes, marketing budgets could drop by 30% in 2022, compared to 2019. It means that marketing departments already stretched by the pandemic will have to double-down on cost savings and get extra value from their suppliers. To that end, the performance of agencies and service providers needs to be scrutinized in more detail, while spend will need monitoring.

AI-based buying platforms can drive greater value in marketing by maximizing speed, pricing, and performance of both a preferred partner base as well as enabling identification of new, vetted partners to address any broad to specialized need. Having a base of new suppliers with competitive proposals, new ideas, innovative approaches, and different thinking can help to generate sustainable value and reduce spend in the long-term.

Equally, CMOs who may have a lack of understanding into marketing budgets can implement buying platforms and solutions with a data-rich portfolio to give them insight into what they are spending and with whom, thus identifying opportunities for cash savings or improved service agreement terms.

The Future of Procurement is self-serve, fueled by innovative AI-powered technology that makes sourcing a smarter, more efficient process. I recently joined Alejandro Schipani, Head of Global Delivery at Aquanima, and one of the most visionary procurement leaders I have had the privilege of working with, during AOP Digital Outcomes 2022 to examine how we’re delivering digital transformation to the global Santander banking group and Aquanima’s global enterprise clients.

On the panel, we discussed how Santander and others experience benefits, including increased efficiency and speed to market, closer collaboration with key business stakeholders, and new insights that improve the ability to anticipate customer needs and gain competitive advantage.

We explored how our technology leverages Natural Language Processing, which is capable of reading and interpreting the way a user will identify needs and requirements, and how the Platform then uses the information it has collected to not only find the best supplier for the user but also to support the user in negotiations with that supplier.

This consumer-like approach offers a seamless experience for those who aren’t experts in procurement because the technology delivers ‘crowd-funded’ expertise. As Alejandro put it: “The Platform helps us to be more accurate in the description of our needs, which benefits the business unit as well as the supplier. Everyone on the supply chain is saving time as a result.”

Specifically, Santander saw results within just 90 days of adopting our Platform. They gained substantial efficiencies by scoping projects in days instead of weeks and by awarding work in less than a month. This freed employees up to focus on more value-driven activities, such as category strategizing and developing relationships with suppliers.

Santander also enjoyed average cost savings of 15%, and users were challenged to explore alternative suppliers for their sourcing needs, including diverse suppliers to support the company’s ESG agenda. This groundbreaking technology identifies opportunities for potential new suppliers, and by using it, combined with data on ESG scores and other important diversity certifications for easy comparison, Santander has been able to successfully prioritize diversity and sustainability during the selection process.

Throughout the procurement journey, AI gets smarter with every project and interaction, as thousands of sourcing events help it learn to drive the best outcomes. We are now working with Aquanima’s global team to further leverage the scale of AI-powered sourcing and to help its clients negotiate even more accurately with suppliers aided by price prediction, receive alerts when inconsistencies are detected, and continuously improve their decision-making based on benchmarking data.

This really will signal that we have delivered the Future of Procurement–as Alejandro himself says: “We are especially excited about the Platform’s ability to predict price and supplier behaviour, which will be extremely important for us in the future.”

Download the White Paper, Aquanima’s Vision for the Future of Procurement, to learn more.

As enterprise companies struggle to digitally transform, Globality CRO Keith Hausmann discusses how innovative technology can help procurement meet today’s biggest challenges, while increasing its influence through the power of ‘Performance Spending’.

In her book Trade wars, pandemics, and chaos: How digital procurement enables business success in a disordered world, Dr. Elouise Epstein, a digital futurist at Kearney, explains why most companies have historically been underwhelmed by the digitalization of procurement processes, noting that it hasn’t always delivered on the promise to empower people to move at speed, be more agile, and work how they want.

However, progress has since been made. As Dr. Epstein explains, “Digital procurement technology has evolved, the expectations for leadership regarding digital technology has changed, and the opportunity has arrived for those who are able to seize it.” There is now significant opportunity for procurement to be a crucial driver of enterprise growth and value.

A recent survey Globality conducted, in partnership with SIG, found that only 15% of respondents believe that they are “best-in-class” or “industry leaders” when it comes to the digital transformation of their operating models, and an eye-catching 50% describe themselves as “laggards.” Globality and SIG discussed these findings at an executive virtual roundtable – below are three key takeaways for procurement leaders who want to successfully transform their operating model:

1. Utilize the Power of Performance Spending

Turning the money that procurement spends into an asset to accelerate business performance is a new concept which we at Globality call ‘Performance Spending’. This approach will enable procurement to become a key driver of enterprise growth and position it firmly at the heart of the business.

Performance spending will help procurement drive improved business performance and impact, whether that is speed to market, agility and resilience during times of disruption, savings, or increased inclusion and sustainability.

A key part of this new idea is helping to enable a company’s ESG strategy. There’s no doubt that ESG is increasingly top-of-mind for investors, CEOs, employees, and customers. Procurement can help enterprises hit their targets of increased environmental sustainability, more inclusive economies, greater transparency, and stronger corporate governance—all via a global trade ecosystem that is transparent and fair, with greater opportunities for companies of all sizes.

2. Democratize the Procurement Process

Procurement has long talked about the need to democratize the buying process and there is now a clear need to expedite this transformation. Few procurement teams have enough people to actually stay ahead of the business needs of all of their stakeholders across their entire company.

So the question is how do visionary procurement leaders empower users to self-source, but with appropriate guardrails around issues such as risk, preferred suppliers and vetted suppliers?

Traditional buying channels should become new digital self-sourcing processes where we empower and democratize what traditionally was done by the procurement people that teams no longer have enough of, particularly given the current talent shortages in the marketplace.

3. Set Procurement Talent Free

Closely linked to the above is how companies can transform their procurement models, so they are less reliant on humans in the performance of traditional, repetitive procurement tasks, such as running RFPs. Not because humans aren’t capable of doing this, but because there is an increasing shortage of talent on which companies can rely and that talent can be better utilized on more strategic work, such as business partnering and supplier relationship management.

AI technology can help companies deliver better outcomes for many repeatable processes, effectively picking up the burden and freeing up limited human resources. When this happens, procurement talent can focus on more value-driven work. Rather than navigate cumbersome legacy systems, for example, workers can prioritize activities such as problem-solving, supplier collaboration, and product development.

Ultimately, as intuitive technology takes routine tasks out of human hands, it’s important for procurement leaders to expand the role of the few team members they do have from being transactional to becoming important innovators within the business. Doing so also opens up the definition of what “procurement talent is” and where people with the required skills can be found (often in other business functions).

Embracing the Future of Procurement

Transformative CPOs and procurement leaders need to articulate a clear vision of the Future of Procurement – one where they adopt innovative technologies and platforms to either replace outdated analog models and legacy systems, or to enhance and augment installed core systems. Taking this approach, alongside building a team that actively wants to explore new ways of doing procurement to add greater strategic value, will help the broader business gain competitive advantage both today and tomorrow.

Download our survey report with Sourcing Industry Group (SIG) to find out how innovative solutions are helping companies create new sources of value.

Transformative procurement leaders have a unique opportunity to turn their company’s spend into a valuable asset that drives long-term sustainable impact beyond the traditional definition of ESG, writes Mita Gupta.

When we think about the power of procurement to influence company performance, savings and risk mitigation are the traditional levers that come to mind. Increasingly, so do Environmental, Social, and Governance (ESG) initiatives like supplier diversity and value chain sustainability.

To explore how today’s CPOs are defining the “power” of procurement in the context of enterprise priorities, we hosted an Executive Roundtable that was co-facilitated by Christopher Sawchuk, Principal and Global Procurement Advisory Practice Leader at The Hackett Group, and Philip Ideson, Founder and Managing Director at The Art of Procurement. The group discussed the practical steps that procurement executives can take to turn spend into an asset that drives long-term sustainable impact across the entire value chain – something we call ‘Performance Spending’.

The conversation focused on three key areas:

1. Using Digital Technology to Create an Optimal
Supply Base

Building a more diverse and inclusive supply base will inject fresh ideas and innovation into a company’s value chain that can help drive growth and add strategic value. Companies should utilize innovative digital technologies and platforms to find these new suppliers and identify which of them are certified as diverse – partnering with those companies will drive sustainability beyond tier two of the value chain and contribute tangibly to an organization’s ESG strategy.

Additionally, this work cannot become a sidelined “special project.” It has to be fully integrated with category strategies. Not only does this advance programs like diversity and sustainability, but it also brings procurement into contact with everyone in the business looking to move the company forward on stated ESG targets.

2. Turning Spend into an Asset

Procurement should enable the company to convert corporate spend into an asset of substantial value for customers, shareholders, and employees. This requires a more expansive mindset than can be achieved when savings and process compliance are the function’s central focus. Transformative leaders should ask themselves: what does procurement stand for as an organization? What are the corporate values? The answers to these questions should be apparent in procurement’s working priorities and results – and also align closely with the organization’s broader corporate objectives.

By reframing the conversation with stakeholders, procurement’s work should no longer be about getting the lowest cost for a particular item or service. Instead, they prioritize investing spend in furtherance of the company’s broader purpose and values: diversity, sustainability, and beyond.

3. Democratizing the Procurement Process with
Effective Intelligence

A democratized procurement process is one that is open to all, allowing companies of all sizes to compete for business on a level playing field, in a competitive and transparent manner, with no one excluded by outdated, analog processes. When businesses resist the temptation to over-consolidate the supply base, diversity will naturally follow. They may not achieve the diversity spend percentage they are looking for overnight, but the first step is using digital technologies to remove the barriers to entry.

Reporting is key to making this work. Procurement teams must have access to digital technology and platforms that enable them to identify diverse suppliers and track spending over time. Suppliers need to be appropriately tagged in procurement systems, and diverse companies should be able to reach out and identify themselves as qualified prospective partners to the business. This makes it easier to achieve corporate targets, establish accountability, and maintain visibility of the progress made over time.

Summary: Procurement’s Unique Opportunity to Enable the ESG Agenda

As Chris Sawchuk pointed out during the roundtable, many global organizations have set ambitious targets for supply base diversification. By the end of 2021, the median organization aims to increase from 5.2% to 8%, whereas top quartile performers intend to have 20% of their overall spend with diverse suppliers by 2025.

How are they planning to meet those objectives? By utilizing new technologies and marketplaces that enable them to achieve these ambitious targets. Leading procurement organizations have to take their existing supply base and expand it to meet their changing needs. Ultimately, the conversation has to start with what is at the top of the CEO’s agenda and why it is there.

Whether the priority is ESG, diversity and inclusion, or sustainability, procurement has to translate that into their goals and objectives, continuously driving, tracking, and monitoring the success of everything it is executing upon. Accelerating that power with fit-for-purpose digital technologies is the rocket fuel that will drive value well into the future.

Click here to download our infographic showing how to successfully implement a supplier diversity program at your company.

At a time when companies are increasingly focused on their corporate purpose and ways of contributing positively to the economies and communities in which they do business, it’s a stark fact that the average global enterprise spends US$4 billion on services each year, yet 70% of this is never exposed to transparent, fair, and competitive processes. Transforming the way a business procures its services will not only rectify this gap but also deliver a wide range of benefits—more efficiency and lower costs, improved speed to market, a broader supply base featuring more diverse providers, and the elevation of procurement’s standing among business stakeholders. In addition, this new, intelligent, automated, and easy-to-use ecosystem for global trade in B2B services can enable a company’s ESG agenda, fulfilling that purpose by helping to build fairer, more sustainable and inclusive global economies.

Eliminating Bias

A major problem with many procurement processes is that a company’s buyer simply uses the same incumbent supplier they have bought services from for years. Yet, do parents invest in their children’s college education without evaluating multiple choices? Would consumers buy a new car or new home without researching consumer feedback or comparing the price with alternatives? If a buyer just gives business to a supplier they have a personal connection with, not only are they creating bias in the value chain, but they are missing out on generating any value. Conversely, when buyers create a competitive market among suppliers, it generates savings and leads to new ideas and innovative solutions.

Increasing Speed to Market

Similarly, most businesses want a faster sourcing process, so business stakeholders often find it easier to just buy from the same old suppliers rather than go through a slow and inefficient traditional analog procurement process. However, innovative digital technology now allows buyers to procure services in a fair as well as a quick and efficient manner, so they can still prioritize speed to market while ensuring complete transparency and making informed, merit-based decisions and selections that are the best fit for their requirements.

Broadening Your Supplier Base

Using new digital technology to implement competitive and transparent procurement processes builds a more diverse supply base, enabling enterprise companies to easily do business with qualified companies of all sizes regardless of location, helping create a more inclusive global economy. Numerous studies have shown that diverse populations produce better results and improve company performance, so tapping into them can help build competitive advantage. And, according to the Harvard Business Review, “inclusiveness can make value chains more resilient and agile.”

Improving the User Experience

Dr. Elouise Epstein, in her recent book, “Trade Wars, Pandemics, and Chaos: How Digital Procurement Enables Business Success in a Disordered World,” highlights how many business stakeholders are dissatisfied with the technology decisions procurement has made. AI-driven procurement platforms enable real-time collaboration and increased visibility at every stage of the sourcing life cycle, so users gain alignment quickly and easily. Stakeholders can also be empowered to source services autonomously with full transparency and compliance via an intuitive, self-service platform. This creates the seamless end-to-end experience that people are now used to in their personal lives and expect at work.

Elevating Procurement's Role

Transformational technologies like AI have also unlocked a huge new opportunity to move procurement from a cost center to a function that drives enterprise growth and helps create strategic value. Although finding the best services and products at the best price remains a core focus, procurement can use innovative digital platforms to automate repetitive, manual processes and make better decisions quicker, allowing its talent to focus on higher-value tasks, such as supplier collaboration, product development, and innovation. Putting this new operating model into practice will enable transformative procurement leaders to earn that long-talked-about seat at the table.

Enabling the ESG Agenda

Another way that procurement can position itself at the heart of the enterprise is by capitalizing on the unique opportunity to enable a company’s ESG agenda because how a company spends its money can be the biggest asset it has to advance and achieve that strategy. Through digital innovation, visionary procurement leaders can create far more impact on a company’s profitability as well as its sustainability, governance, and inclusiveness. This exciting new world of performance spending will help build global economies that are more inclusive, more transparent, and open to all.

Seize the Moment

Committing to buying the company’s billions of dollars of services through fairer and more inclusive processes using cutting-edge, AI-powered technology is the right thing for a business to do both ethically and financially as they embrace a new way of sourcing complex services. And innovative, digitally-driven operating models are the foundations on which this bold vision for the Future of Procurement is built, improving both the quality and diversity of a company’s supplier base. The sooner a business puts these changes into practice, the greater the value will be to the wider organization as it seeks to gain a competitive advantage in today’s fast-changing world.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing supplier diversity.

The focus of the CIO has shifted dramatically in recent years from cost reduction to enabling their organizations’ most important strategic objectives. Meanwhile, the pace of technological change in this period has also accelerated greatly. These converging trends are driving technology departments to rethink how they deliver best-in-class products and services to their businesses and customers – vendor and supplier ecosystems are fast becoming a defining factor in achieving these goals.

As the technology landscape continues to rapidly expand and diversify, finding and engaging with the right vendors and suppliers becomes even more challenging. IT leaders must act now to clearly define how they want to engage with suppliers, and they need to be explicit, transparent, and consistent in articulating their requirements. It is only by taking these steps that IT departments will transform the quality and value of the services they receive and, ultimately, the services they deliver.

Benefits of Ecosystems 

Technology departments operate across a spectrum – some work with just one or two major suppliers, whereas others may have hundreds delivering a range of products and services to support their needs. Often, these capabilities are provided in relative isolation, resulting in IT organizations not realizing the benefits that integrating them brings.

It is for these reasons that the new best-of-breed ecosystem sourcing model offers transformational benefits when implemented effectively; speed to market, agility, flexibility, and innovation improvements to name a few. To realize these benefits, IT departments need to get comfortable with signing more flexible contracts with multiple suppliers, enabling them to switch providers as and when the business demands, for example when expanding into new geographies and markets, and during M&A activity.

In this type of innovative ecosystem environment, the IT organization becomes an orchestrator, combining in-house capabilities with the ability to seamlessly integrate suppliers and their interactions with one another. This new role requires an agile approach, and it means the procurement mindset and processes must shift to prioritize enabling best-of-breed vendors, products, and services – multiple fit-for-purpose technologies that work together to deliver superior user experiences for customers, business users, and stakeholders.

Transforming Mindsets and Processes 

Many procurement processes are cumbersome and time-consuming for everyone involved, often involving supplier contracts that can last many years. As IT teams lead the way in experimenting with modern ways of working by using ecosystems of suppliers that can be called upon as and when needed, procurement must also shift to innovative digital platforms that offer smarter and faster decision-making capabilities.

Successful procurement functions in complex supplier ecosystems need to have a much deeper understanding of technological and business-case dependencies, such as how one application provider might depend on consuming a set of services from an infrastructure provider. Organizations must consider those dependencies and ensure they are reflected in vendor agreements.

AI-driven procurement provides additional benefits to IT departments by giving tech and business stakeholders the autonomy to run the events they need at any time, whilst offering procurement visibility across all events so that they can get involved in those that are most important from a strategic, cost, complexity and risk perspective. Such platforms are infused with deep category, domain, and business expertise—augmenting the knowledge of the IT department experts running events to deliver enhanced sourcing and supplier management for complex services and software procurement.

Building Tomorrow's IT Function

Adopting this new approach, utilizing novel digital technologies to manage supplier sourcing and relationships, enables the IT organization to become a true ecosystem orchestrator. Enterprises can leverage the learning capabilities of AI-powered platforms to massively reduce the time it takes to perform tasks such as scoping and awarding work to the best suppliers.

Right-fit matching for providers becomes a real-time process, as opposed to taking weeks, and the re-use of technical requirements, contractual terms, and agreements is made extremely simple. For example, platforms can surface the relevant information from previous sourcing events, which business users can quickly amend and use on new projects—no more sifting through old RFP documents, email trails, and instant messages to find the information required.

One of the main benefits that AI-driven procurement offers is the ability to free up procurement talent to focus on value-added activities such as engaging with business and technical stakeholders early, gaining a deeper understanding of the context around individual sourcing events, and becoming a trusted advisor to the business for their most important requirements.

It is not an understatement to say that these days every business is a technology business; best-of-breed ecosystems of the right suppliers working in unison will become ever-more important to the long-term success of any company. Now is the time for CIOs and other leaders to lay the foundations throughout IT and procurement organizations to take advantage of the transformational benefits of ecosystems, underpinned by the technologies to best identify and manage suppliers across the enterprise.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing enterprise growth and supplier diversity.

At Digital Procurement World 2021, Globality brought together a panel of transformative procurement leaders who are putting strategic innovations into practice to help drive growth and lead the ESG agenda across their companies. Paula Martinez, CPO at Novartis; Cyril Pourrat, BT Group CPO; Vanessa Pepperell, COO and VP of Strategy for Aquanima, the procurement function for the Santander Group, were joined by Globality’s Chief Revenue Officer, Keith Hausmann. During the session, moderated by Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader at The Hackett Group, the panel highlighted the key ways that procurement can create enterprise value and economic impact:

Turn Spend into an Asset

Procurement now has a unique opportunity to use a company’s spend as an asset that drives social impact, transparency, fair practices, and governance. Turning spend into an asset rather than viewing it as a cost can drive innovation and new product development capabilities with suppliers. Pourrat highlighted how BT is building a network of partners – suppliers who are also customers – using reciprocal trade to add value to the stakeholder ecosystem.

Bring Procurement to the Business

Panelists discussed how to bring procurement to business partners, both internally and externally, and asked how companies can empower their stakeholders to buy goods and services in a way that is simple and on their terms. Martinez explained that for stakeholders, and suppliers, getting access to cleaner spend data in a seamless way and having adequate modern digital solutions will help make procurement more efficient. Pourrat added that his priority was to simplify the way BT purchased goods and services with a consumer-like user experience.

Redefine Value Measurements

Procurement is redefining how it measures success—in addition to the traditional focus on savings, compliance, and risk, the function must now prioritize factors such as an organization’s impact on the environment, social issues, and communities as well as how companies drive sustainability and resilience into their procurement organization. Pepperell said her customers are now more concerned about their sustainability and the responsibility they have as a big company: “In negotiations, we take ESG values into account as a key factor for awarding business. And I’m sure that in the coming months, this focus will only increase.”

Build a Best-of-Breed Ecosystem

Rather than a one-size-fits-all platform, companies should use modern procurement technologies to build a best-of-breed network of suppliers specific to their needs. Pourrat explained how building BT’s Digital Garage has allowed his team to engage seamlessly with the various startups in his procurement ecosystem. This gives his practitioners the freedom to pick the particular solution that will really fit their purpose – he has a motto of “no more than two clicks.” Martinez highlighted how buying something is seamless in our personal lives but can be a slow, laborious process in the corporate world—and AI technology is the enabler that can solve this pain point.

Uplift Procurement Talent

Procurement leaders should expand the role of their teams from being transactional to becoming an evangelist, coach, analyst, relationship manager, and innovator. As Hausmann noted regarding the people who are driving BT’s Digital Garage, “That’s a very different use of talent than the traditional focus on running an RFP or processing a transaction.” This material change in what procurement talent should be doing is made possible by new technology that automates repetitive transaction-oriented activities and frees up procurement people to add value to the wider business through more strategic activities such as problem-solving, supplier collaboration, and product development.

Be Bold

The panel concluded that the key to using procurement to propel an ESG strategy is to be bold and embrace new technology to transform the way companies buy services and goods. Pourrat noted, “Disruption will come, so it’s better to drive the disruption—otherwise you’ll be disrupted yourself.” Pepperell added, “If you don’t move, the market is going to move without you. So don’t be afraid to embrace this new technology instead of the disjointed systems we’ve relied on for the past 20 years.” Hausmann summarized, “Reimagine a vision for procurement through the lens of your business stakeholders internally and externally. And drive that vision into your organization, through your peers and other company leaders.”

Click here to watch the “The Future of Procurement: How Leading Companies Are Creating a Better World” session.

Keith Hausmann explains why the time is right for procurement to expand its influence across the organization and deliver the future of sourcing today.

Although procurement includes a broad remit, the key objectives for procurement leaders across industries remain those of driving lower costs, ensuring availability and supplier quality, and driving compliance. However, companies are experiencing a paradigm shift in the way they procure goods and services with the advent of new operating models, talent, AI, and digital technology.

On top of these factors, the increasingly important environmental, social, and governance (ESG) agenda offers a unique opportunity to make procurement much more strategic and valuable as well. As we all know, this no longer just relates to what happens inside an enterprise but more broadly reflects the impact an enterprise’s entire supply base has across the countries in which it operates.

Five steps to success

While the time is right for procurement to increase its influence across the enterprise, enabling inclusive, competitive, and sustainable self-serve sourcing for every strategic need, this can be easier said than done. In order to create this bold vision of tomorrow’s procurement model, companies must redefine how they procure goods and services, adopting five new guiding principles.

These principles involve turning key aspects of the function on its head and viewing them differently. Procurement should shift its focus beyond overseeing processes and ensuring savings and compliance to finding new and innovative ways to increase strategic value to the whole company and deepen relationships with suppliers.

The pillars of digital transformation

This transformation can be driven by reimagining how a company procures goods and services, using innovative technologies such as AI and advanced analytics to help procurement to work more efficiently and become more user-friendly. When managed correctly, modern technology can contribute toward a best-of-breed procurement ecosystem that provides an elevated stakeholder experience, superior provider quality, lower total costs, and increased collaboration. At the same time, freed from manual, repetitive processes— procurement talent can focus on partnering with business stakeholders to achieve their strategic goals with KPIs that match this new vision of procurement.

Understandably, procurement leaders are excited about the opportunity to positively impact the future of the global economy, using their company’s spend to enable its ESG strategy by ensuring all business is awarded fairly and transparently, and that suppliers across the value chain share the same sustainable values. Even before the COVID-19 pandemic, stakeholder expectations were evolving and becoming more demanding. Digital transformation has profoundly accelerated across businesses, regardless of sector, and a new procurement operating model is now a requirement, not an option.

Delivering the future of procurement

Leading CPOs agree that the time is right to seize the new opportunities afforded by new ways of working and modern technology. These procurement leaders are implementing platforms that not only deliver visibility, efficiencies, and cost savings but also drive strategic growth and create enterprise value. A Globality survey of 101 procurement executives revealed that 97% agree digitization will advance their strategic goals; however, less than 5% are fully digitized in a manner that meets or exceeds stakeholder expectations. To meet these goals, the time is right for CPOs to adopt the five bold new guiding principles that will allow them to deliver the future of procurement today.

Learn more about the five principles by downloading the white paper.

The article was originally published by Global Banking and Finance.

Now, more than ever, procurement leaders across the globe are aware of just how important digital innovation is to help their business remain competitive. But achieving this change is a huge undertaking, and not all digital transformation projects are successful. There are serious questions that must be asked when faced with such a considerable challenge. For example, how can procurement transform so that it can better help businesses to succeed in an increasingly fast-changing and unpredictable world? And what separates those who succeed in digitalizing their procurement function, from those who continue to struggle?

The following five points go some way to answering these questions and, in doing so, form the key pillars upon which a successful procurement digitalization strategy is founded.

1. Focus on what your business needs, not on what procurement wants

A change of mindset is required if procurement is to make the most of digital. Traditional procurement processes and models were largely built around what procurement needed to achieve rather than what might have been helpful or easy-to-use for those in the wider business.

Through digitalization, procurement teams can begin to put the needs of the business user first. By designing platforms that focus on what those users want, and that deliver a more user-friendly, consumer-like experience, procurement can drive up compliance and, perhaps more importantly, play a bigger role in driving growth across the business as a whole.

2. Put self-service at the heart of procurement’s digital transformation

The self-service approach has been used in a number of areas, such as requisitioning and travel booking, for decades now. The time has come for procurement to catch up.

Some people may have concerns about letting their colleagues in the business loose with procurement projects. The truth is, however, that the latest AI-driven solutions will give stakeholders the advice and guidance they need while enabling procurement professionals to turn their focus toward more strategic tasks and projects with which they can really add value and make a difference to the business.

3. Ensure procurement platforms and processes are available around the clock

We all know from our own experience that not everyone works the same hours and that people often want to be able to carry out their work where and when it best suits them. Indeed, post-pandemic, many companies will be operating remotely or with a hybrid model for the foreseeable future.

To enable the required level of flexibility, procurement can no longer restrict its services just to office hours; platforms and processes now need to be digital, automated, and always on.

4. Make digital procurement an enabler of agility

With new challenges and opportunities arising on a daily basis, today’s business environment is in a state of constant flux. To remain on top of this constantly shifting landscape, there’s one thing every business will need its procurement function to deliver: agility.

Agility is essential in allowing businesses to make quick decisions, take immediate actions, and change direction when required. To enable this agility, procurement needs to harness the power of digital technology.

When stakeholders want a list of suppliers that their procurement function recommends, for instance, they should be able to access it immediately through a self-service platform rather than having to wait for the function to draw the list up – or even having to wade through spreadsheets to produce it themselves.

5. Use technology to drive diversity and inclusion

By enabling businesses to source goods and services in a more and competitive way, digitalization has created significant new opportunities to increase diversity and inclusion among their suppliers.

In the past, many organizations would tend to go back to the same few suppliers they’d always worked with, simply to avoid a slow and laborious RFP process. By speeding up those processes, business stakeholders are encouraged to consider more fully a broader field of potential suppliers, ultimately leading to more innovative and diverse choices.

Businesses everywhere are enjoying the benefits of digital transformation in improving the efficiency, flexibility, and agility of their operations. Indeed, the impact of the pandemic taught us all how important it is to make fast, informed business decisions. Procurement should be no exception.

To succeed in today’s fast-changing world, procurement leaders must embrace digital technology, and use it as a competitive advantage, allowing them to deliver an intuitive, easy-to-use experience to stakeholders on their terms.

With these five pillars in place, the procurement function will be on the right track to unlock the advantages of digitalization, moving from a singular focus on supply and cost savings to help position their companies for long-term growth. The challenges are significant, but the opportunities are deep and extremely rewarding for those who are ready.

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Keith Hausmann is Chief Revenue Officer at Globality.

The second part of our blog on supplier diversity highlights the ways companies can successfully broaden their global provider base for services sourcing. You can read the first part on why it is critical for companies to focus on supplier diversity here.

Most, if not all, businesses understand the benefits of making supplier diversity an enterprise-wide priority. A conscious effort to improve diversity in a company’s value chain, including services and goods, will not only create a more robust supplier base but will help strengthen the economy and fuel economic growth. But if achieving supplier diversity was easy, every company with ambitious diversity and inclusion (D&I) goals would have done so by now. Putting these good intentions into practice can be the challenging part. So, here are seven ways companies can implement a successful supplier diversity program.

1. Set concrete and measurable goals

The first step for an organization is to define what the supplier diversity program is designed to achieve. It is essential to recognize which underrepresented groups a company is hoping to target and identify the desired outcomes. This could be working with more female-owned businesses, minority-owned businesses, or LGBTQ-owned businesses. Or a company might want to consider more diverse suppliers in each request for proposal (RFP), funnel a certain percentage of spend to diverse businesses, or have more diverse teams assigned to its matter regardless of whether the supplier is certified as diverse. Supplier diversity goals should also align with and support wider company goals. For example, moving into new markets requires suppliers that reflect those markets. An organization needs to be clear on the goals from the outset to create alignment on what success looks like.

2. Promote supplier diversity efforts internally

The support of company leadership and procurement is instrumental to designing and implementing any major program, including increased supply chain diversity. Engaging key leaders and procurement teams early on to secure their endorsement and marketing the program internally will ensure that everyone involved in sourcing services knows that supplier diversity is a business-wide priority. Similarly, engaging stakeholders and employees throughout the company and promoting the business value of increased supplier diversity will create more buy-in and participation, increasing the odds of the program’s success.

3. Measure progress and create accountability

Once a company has set the goals, the only way to know whether it is getting closer to achieving them is by looking at the data. Using new digital tools enables procurement teams to measure their progress by providing visibility into key metrics such as percentage of sourcing events where diverse suppliers were considered, percentage and gross spend allocated to diverse suppliers, and number of new diverse suppliers that have been engaged since program inception. Measurement of progress does several key things: it creates accountability for procurement partners to hit company-wide goals, gives leadership a picture of the health of the supplier diversity program, and provides the opportunity to evaluate which strategies are working and which may not be.

4. Run more competitive sourcing events

One of the major barriers to increasing supplier diversity is stakeholder inertia. It’s much easier for business users to rely on a small group of existing suppliers than issue an RFP to make the process competitive. Utilizing new technologies to automate the sourcing process is one way to reduce time spent on outdated analog RFPs as well as increasing competition, driving down costs, and increasing the number of diverse suppliers your company has access to. If stakeholders keep awarding work to the same handful of legacy suppliers, there is very little chance of a supplier diversity program achieving its intended goal. It’s important to open up the playing field so new entrants have a chance to compete based on merit and proven experience.

5. Make it easier to onboard new suppliers

Many companies have complex and arcane onboarding procedures for new suppliers, which creates a natural hurdle for stakeholders or procurement when considering working with a provider they’ve not engaged before. Why take an extra six weeks to onboard a new supplier when the entire project you’re looking to source has a target delivery date in eight? While some onboarding procedures are necessary to protect the company from outside risks, procurement leaders should look at their processes and timelines to see whether there are ways to cut the time and paperwork required to onboard a new supplier.

6. Eliminate implicit biases in the selection process

It’s crucial that companies revisit their current provider selection processes and look for weaknesses or areas that may unintentionally be introducing bias. If, for example, the RFP process includes a lengthy questionnaire, larger firms with marketing departments whose sole job is to respond to RFPs have an inherent advantage over small businesses with less staff who likely won’t be able to devote a lot of time away from paying client work. Companies should think about whether the requirements they’re putting on suppliers are actually geared toward something productive or if they stem from outdated legacy processes that could be improved through use of new, AI-driven tools.

7. If the program’s not working, change it

There is no silver bullet when it comes to increasing supplier diversity. Companies may not strike gold on the first try—or even the second or third. Periodic reviews provide opportunities to see what’s working and what isn’t. If the program isn’t delivering the desired results, the end goal is important enough that businesses must keep trying until they land find solutions that work. Aided by the new technologies and platforms available, an organization will eventually land upon the right mix of actions, measurement, and processes that enables it to help build a fairer global economy through a sustainable and impactful supplier diversity program.

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Mili Desai is Director, Legal Sector & Customer Success at Globality.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing supplier diversity.

It’s one thing for companies to talk about diversity and inclusion but another to truly put those words into practice and build an organization where people from right across the spectrum can come together and work collaboratively, feeling that everybody is treated equally and fairly, regardless of their background. At Globality, we were privileged recently to have NBC Bay Anchor Raj Mathai interview Prakash Janakiraman, Co-Founder of Nextdoor, to discover his insights on creating a culture of belonging that enables every employee to achieve their maximum potential each day.

Expanding the Talent Pool

Janakiraman pointed out that, to remain competitive in today’s complex and fast-changing world, companies have to resemble their customer bases, which means ensuring they have different perspectives around the table. It further means going to new places to find talent from diverse backgrounds—if a business just recruits from a small base, it’s missing a lot of underrepresented talent. Technology companies, in particular, need to actively work to overcome the systemic barriers that prevent people from diverse backgrounds from enjoying the opportunity to work in what is a rich economy of innovation. For example, this could mean going into public schools, some of which may not even have computer literacy programs, and building innovative programs to train the next generation of coders and AI engineers. It also requires conviction within a business to divert resources and encourage employees to spend their time doing these things.

Looking Beyond the Numbers

While trying to improve diversity and inclusion, companies often focus solely on the numbers. How many employees do they have and what percentage of them fall into each different demographic? This is useful information, but they should instead prioritize building a culture that ensures people feel they can be their authentic selves, have a connection to that purpose, and believe their voices are valued. Creating this sense of purpose leads into the practical elements of inclusion that all companies should implement—for example, making sure that pay and promotion practices are fair, recruiting practices are free of bias, and the company is reducing microaggressions in the workplace. The inevitable result of this should be that people from different backgrounds will all feel a much stronger long-term connection to the company, which improves employee retention and productivity.

Top-Down Leadership

Continuously fostering a culture of diversity and inclusion requires leadership from the top of an organization. If company founders or CEOs take the lead on diversity and inclusion and speak in an authentic voice about why it is important to the company’s collective success and identity, they can move not just resources but also hearts and minds—that’s what leadership is ultimately about, says Janakiraman. Leaders also need to clearly articulate the business imperative, which helps align those people who may not necessarily see the moral imperative as clearly as others. If they understand that the business’s collective success is defined by improving diversity and building a better culture, that supports the dollars-and-cents argument, which is proven by the strong data that show diverse companies perform better.

Bottom-Up Participation

Leaders should also continuously take the pulse of their companies to ensure people from different backgrounds are feeling that sense of belonging. If some groups say their voices are less valued, this can be addressed head-on through the formation of small, bottom-up organizations within the company for people with shared experiences to collaborate, communicate, build communities, and advocate for their needs. At Globality, we have recently launched Women at Globality to ensure our female employees’ voices are heard by the leadership team and their concerns and recommendations acted upon swiftly. Whether for religious, racial, or other groups—each of these subsets of employees has real lived experiences they can use to advise how companies should be creating the diverse and inclusive culture we are talking about. It’s not about putting the burden of thought on these groups but using them as trusted allies, says Janakiraman, and it helps companies understand the sentiments of these diverse communities.

Speaking Out

Companies can also demonstrate their commitment to an inclusive culture by speaking out on the wider societal issues that are aligned to their core values, purpose, and mission. If a business sees things happening in the world that run counter to its purpose, whether on immigration, discriminatory practices against LGBTQ communities, or racial equity, articulating those concerns will show its people that it genuinely believes in what it says about diversity and inclusion. Janakiraman highlights how living these values is a powerful statement of intent: “Employees care about these things, customers care about these things, and, to be successful as a company, a business really does need to have a voice on these issues if it wants to stand for something.”

Acting with Purpose

By focusing on these areas and continuously reevaluating its actions, companies can ensure they are not just paying lip service to diversity and inclusion but instead putting them at the heart of its everyday purpose and mission. As Janakiraman concludes, “when people can join businesses that are purpose-driven, they know they’re positively impacting communities like their own, and it all comes together in a virtuous cycle.”

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Sonia Mathai is Chief Human Resources Officer at Globality.

After years of diversity and inclusion (D&I) being treated as a buzzword, many organizations are now taking a closer look at whether their actions are making a meaningful difference. In some cases, companies are thinking more about D&I in the businesses they work with, particularly their suppliers. Tackling the development of a more inclusive value chain, including services and goods, may seem like a daunting task. But, if there’s anything that 2020 has taught us, it’s that now is the time to move from words to action in achieving your organization’s goals.

Why Is Supplier Diversity a Critical Priority Now?

In the procurement space, the term supplier diversity has been used for many years. Generally speaking, the concept of supplier diversity refers to companies seeking to do business with organizations that are owned by certain traditionally underrepresented groups or those that meet a certain size criterion. Numerous studies have shown that diverse populations produce better results and improve the bottom and top line. Inclusive value chains are no different. Here are three reasons why diversity is more important now than ever:

1. Value Chain Diversity Adds Economic Value

Research shows that companies with a diverse supplier base actually add economic value by employing businesses that otherwise would not be able to survive. Small and diverse businesses may have more limited access to capital and business development opportunities. By investing in relationships with diverse suppliers, larger companies can support smaller businesses by creating jobs and uplifting the communities in which they operate. For example, in 2018, CVS Health reported that its commitment to working with small and diverse suppliers had created an economic impact of $5.5 billion and supported over 30,000 jobs.

Moreover, improving the inclusiveness of your value chain can mean a direct increase to your bottom line. If your business operates in the B2B space, your customers may require that your value chain meet certain diversity criteria before they will consider awarding your company business. A Hackett Group study found that developing a strong reputation for dedication to supplier diversity can result in increased market share—in fact, the companies that had a high proportion of diverse spend increased market share at a distinctly better rate than those that did not.

2. Diversity Ensures Agility and Innovation with the Best Service at a Competitive Price

It’s well documented that increased competition in the value chain drives costs down and pushes efficiencies up. Introducing more small and diverse suppliers to competitive sourcing events ultimately lowers costs. As a recent HBR article notes, “inclusiveness can make value chains more resilient and agile.” Small and diverse suppliers are often leaner and more responsive than larger players and are able to pivot quickly when things change. As we’ve all learned in 2020, things can change drastically and rapidly. An inclusive value chain will make your organization more agile and provide multiple channels from which to procure goods and services. A diverse value chain can also lead to greater innovation. Providing an inclusive platform for different voices to be heard can lead to new and innovative solutions to customer problems as well as new approaches to product development and services delivery. Pursuing supplier inclusion can help give your company an edge when it comes to competition, costs, and innovation.

3. Diversity Promotes Company Values and Honors Corporate Responsibility

Simply put, sourcing and onboarding smaller and diverse suppliers is not just the right thing to do, but it is a way for organizations to give back to their communities. Many companies have corporate statements about their company values and commitment to corporate responsibility, economic inclusion, and making the world a better place through the goods and services they provide and the way that they operate. Pursuing supplier diversity helps companies stay true to these statements. In an era where performative allyship has become rampant and consumers are rightfully skeptical of empty corporate statements about D&I with no real teeth to them, statements alone without substantive actions are not going to be enough to convince customers and partners that a company is really honoring its commitment to D&I. Putting the spotlight on supplier diversity is a great way for companies to “put their money where their mouth is.”

Supplier Diversity Is Everyone’s Responsibility

We are at a pivotal moment globally where the world’s attention is focused on social justice issues. D&I are just pieces of that puzzle, but they are essential ones. Today, there is unparalleled energy and momentum for these initiatives, and companies have unique opportunities to realize the benefits of a more inclusive supplier base. This is the right moment to capture the attention of senior leadership to get resources allocated to pursue these goals and to start realizing the vision of economic inclusion that these initiatives naturally foster. In part two of this series, we’ll explore best practices when it comes to supplier diversity programs, common challenges, and some tips to avoid the challenges.

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Mili Desai is Director, Legal Sector & Customer Success at Globality.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing supplier diversity.

In our rapidly changing environment, how can procurement become a driving force for change and a strategic partner to deliver value to the business beyond traditional cost savings? It is now imperative for leaders to fully leverage digitization to become an equal in the business and deliver the “consumerization” of procurement so stakeholders have a fast, simple, and seamless experience.

This was the focus of a Leadership Challenger session that Procurement Leaders and Globality moderated at the recent World Procurement Congress Virtual 2020 with digital procurement futurist Elouise Epstein as the featured guest. The thought-provoking roundtable with eight global CPOs and procurement executives centered on the challenges and opportunities that procurement is facing as businesses worldwide accelerate their digital transformation. Leaders are using this unprecedented time to reinvent the function, bringing new approaches and ways of working to their organizations.

Here are a few key takeaways from the session:

Societal Trends Are Increasing Pressures on Procurement

Elouise shared insights from her book Disruptive Procurement: Winning in a Digital World and other recent research on how societal macro trends like the demand for greater social responsibility, growing nationalism, and the need for better health care are increasing pressure on businesses. In addition, a highly remote workforce where people are more connected while more autonomous, combined with an intensely competitive job market continue to affect the end-to-end value chain.

As a result, digital procurement innovation is now a baseline expectation or table stakes, with companies starting to disrupt the status quo, enabling procurement to shift from tactical execution to strategic partnership. Using sophisticated analytics, procurement can harness the service and supply base and use it for the common good. Leaders are creating ecosystems of innovative suppliers, reimagining the procurement and sourcing process, and delivering a consumer-like experience to the business stakeholder.

No one is better positioned than procurement to lead organizations in this kind of innovative thinking, inviting diverse suppliers that can bring the best to a company. There is no question where the direction is moving. The only uncertainty is whether companies will get there in three or five years.

Culture Needs to Shift to Make Room for Innovation

Another topic was changing the traditional procurement culture to make room for innovation. The longstanding procurement view needs to be challenged, putting people in a place of discomfort and forcing a shift in the current mind-set.

As one participant shared, “I want more agile teams. I want SWAT teams. I want to outsource some of the routine stuff. I want to put some categories on autopilot. We don’t have to source every category the same way.”

One idea discussed was completely rebranding the procurement function from the top down to better reflect the expanded scope and influence of the role. An analogy was made of the CPO increasingly being a copilot to others in the C-suite instead of one of the crew.

Leaders agreed disruption must start with them––that they must lead the discussion and shift away from the traditional bottom-line focus. Convincing people who aren’t on board with the concept of supplier collaboration and bringing more value to the company remains an opportunity. Leaders need to prove it through metrics so stakeholders see the value or they won’t believe it.

Others emphasized how procurement should let the customers speak for them—not only when they’re exuberantly positive but also when they have constructive feedback that can be incorporated into company operating models.

Constraints Must Be Removed to Accelerate Change and Risk-Taking

Although it has long been seen as risky, a good way to instigate change is to remove constraints from teams’ ambitions, allowing them to own and accept responsibility for their targets. The vast majority will do the right thing and bring diverse perspectives and approaches to getting more value from the supply chain.

The focus has shifted from policing what people do to enabling the operation to operate with greater agility, efficiency, and effectiveness. Companies can move much faster now that ex-post controls have proven to be an effective management system.

One CPO talked about how they ran an experiment where they did not tell their team what they wanted them to find. The only request of the group was to be deeply curious. After trying this with one category, the leader said that the team delivered triple the target, proving how easily people can be constrained by their own beliefs.

The pandemic has shown that organizations can change and change really quickly. One participant said, “I’ve found that over the past six to nine months, decision-making has become a lot faster. It may be that we need to create some other burning platform—not a disaster—but some other real event that would allow us to move digital platforms forward. If we keep banging on about savings and RFPs, we’re dead.”

One thing is clear: There are many calls to action that procurement can lead, and leaders are in a unique position at this moment to disrupt traditional operating models and processes and enable their organizations to drive meaningful growth and change.

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Keith Hausmann is Chief Revenue Officer at Globality.

No one is better positioned to drive disruptive change and lead the reinvention of the enterprise than procurement. To thrive in the “next normal,” an increasing number of procurement leaders are challenging the status quo, embracing transformational innovation, and taking bold action to deliver new sources of value and accelerate growth at their companies.

Last week for Art of Procurement (AOP)’s Mastermind LIVE virtual event, I joined Chris Sawchuk, principal and global procurement advisory practice leader at the Hackett Group, to discuss how procurement has become a catalyst for disruptive innovation by applying emerging technologies.

AOP Founder Philip Ideson opened the session by asking participants which word best describes their experience as a procurement leader over the previous seven months.

The group response confirmed that although this year presented unprecedented challenges, there is also optimism about the opportunity that lies ahead. Change that has been underway for the past 10 years was suddenly accelerated over the past seven months, resulting in completely different requirements for our profession. More than ever, procurement needs to be able to deliver value to the business—bringing their stakeholders closer and transforming how companies buy and sell services and goods across the value chain.

The following are a few key takeaways that resonated with me from the session:

"Procurement needs to expand what we are doing, and we have a lot of wind at our back because of the pandemic. But we need to understand our value through the eyes of our customer.”—Chris Sawchuk, Hackett Group.

There is a strong, evolving notion that procurement leaders sit at the hub of a vast ecosystem of stakeholders, with more of us starting to think about how to utilize this sphere of influence. By thinking about all relationships differently, procurement can gain a competitive advantage unique to this role. Agility is critical, as is investment in being able to predict where procurement needs to be next. The old operating models of category management, sourcing, and transaction processing are no longer agile enough for today’s dynamic business environment.

Three-sixty-degree relationship management is a critical requirement. Skill and advantage can be gained by approaching the supply base as truly strategic partners whom you buy from, sell to, and innovate with and who are therefore incentivized to share in your success. The closer we are to our key suppliers, the more value everyone gets out of the relationship. It works both ways. Why wouldn't procurement want a supplier to also be a customer?

As Chris emphasized, procurement needs to drive customer value. "One way to create a more customer-centric and agile procurement model is to create flexible customer-centric teams that form and 'disband' in response to business needs.”

Procurement can function more like a “sales force” that actively manages “accounts” within the business. This approach should emphasize responsiveness; it doesn't take months, weeks, or days to do anything in our consumer lives. We must reinvent corporate procurement to be equally agile.

As Salesforce.com CEO Marc Benioff says, “You've gotta get out of paralysis and into participation! You have to become relevant!”

Now is not a time to be paralyzed but to act on digital transformation that completely changes what we do. Today’s transformational CPOs are leading their teams to reimagine what is possible while driving new sources of value for their companies and stakeholders.

To view the full panel session, click here.

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Keith Hausmann is Chief Revenue Officer at Globality.

In a recent white paper about the best of breed ecosystem, A.T. Kearney urges CPOs to “embrace the new architecture and adopt individual solutions, updating them as they evolve.” This recommended path for procurement leaders requires a very different type of procurement leader: “a certain type of CPO who has unique leadership skills—one who is in it for the long haul.”

In the first two parts of this series, we examined past approaches to technology and why procurement leaders are excited about the future with an interconnected network of best-of-breed solutions that use AI, machine learning, and other technology to deliver a seamless and effective experience for the end user. For procurement to realize the full benefits of this future state, there is one critical element left to discuss––the opportunities this new model presents to CPOs across all companies and industries.

In order for CPOs to successfully lead the transition to a best-of-breed ecosystem, they must take three steps to ensure they can launch the journey with strong buy-in from executive management and be able to successfully lead this evolution across their company which requires that they:

1. Align procurement’s performance with the C suite’s priorities for maximum enterprise-wide impact.
2. Consumerize the corporate buying process to increase stakeholder satisfaction and make it easy to be compliant.
3. Emphasize and deliver maximum spend transparency in all initiatives and for all types of spend.

Step 1: Align procurement with enterprise-wide priorities

Fortunately for CPOs, executive teams have a much better understanding of what procurement is capable of than in the past. The C-suite now recognizes the impact that procurement has on the top and bottom line and has seen that indirect spend can be very key to turning supplier and value chain capabilities into a lasting competitive advantage. This is less because of the “savings” that can be achieved and more because of the value that business agility, focus and the absolute best and most innovative suppliers (vs. most familiar) can deliver to companies.

So how do CPOs meet their company’s expectations? By starting with a set of reimagined objectives. While CPOs may continue to use proven strategies to manage spend and suppliers, they must recognize the fact that their reasons for doing so have changed. If the objective is a competitive advantage rather than straight savings, the potential value associated with spend and suppliers must be captured in a more nuanced way—justifying the long-term view and a dramatically different procurement technology architecture, as A.T. Kearney suggests. This shift will need to be reflected in both process and technology, complemented by a deeper knowledge of business functions in addition to category expertise.

Step 2: Consumerize the corporate buying process

Beyond the nuance that allows procurement to drive value specifically associated with each category, a best-of-breed ecosystem will improve the distributed buyer’s procurement experience. The consumerization of the enterprise is just as important for procurement as the rest of the business, and stakeholders are now demanding an intuitive user experience in this age of surging e-commerce popularity and consumer expectations of convenience.

CPOs have to place users’ interests at the center of the procurement process. Friction caused by poor usability or delays will not lower demand or stop spending; buyers will simply find a path of least resistance—one that meets the business’ immediate need but may not involve procurement from a governance and data centralization perspective. With a mindset that emphasizes internal customer satisfaction, CPOs must find additional incentives to select and implement the solutions that provide the best overall experience in each category, including self-guided buying or network-enabled self-sourcing.

Step 3: Emphasize and deliver spend transparency

While procurement teams were historically focused on managing spend and suppliers and mitigating supply chain risk, today their value is increasingly associated with data across the value chain, including services. Insight into spending patterns and predictive analytics allow companies greater control over their operational efficiency and opportunities to increase market share. While the quantity of the data has increased significantly, data quality issues remain a challenge.

Transparency cannot be achieved without high data quality that is consistently categorized and centrally stored, which brings us back to Part 1 of this series. The complete procurement technology ecosystem—all of the best-of-breed solutions layered on top of an AI-enabled data hub as the central integration point—will allow procurement insights to be put into practice meaningfully. A different architecture is required, but that cannot be instituted at the expense of centralized spend visibility. Procurement has to deliver value and cost benefits for the entire enterprise as well as across categories.

Today’s CPOs have an enormous opportunity to increase the influence of procurement, but they can’t seize it without the right enabling technology. That technology has to meet the unique needs of different spend categories, satisfy and empower internal stakeholders, and support complex analytical requirements. Only a best-of-breed procurement ecosystem that is oriented around data and analytics can support procurement’s continued evolution.

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Keith Hausmann is Chief Revenue Officer at Globality.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing enterprise growth and supplier diversity.

“In 2020, legacy procurement applications will be scaled back, while cloud-based core applications, best-of-breed solutions, robotic process automation (RPA), and data visualization tools will see significant growth.” — The Hackett Group

A new complement to traditional procurement solutions is emerging— an interconnected network or best-of-breed ecosystem—which is opening the door to procurement’s future. The ecosystem is quickly gaining momentum fueled by transformational automation and emerging technologies, including AI, machine learning, advanced analytics, and RPA. According to a recent Hackett Group study, we can expect an 11% increase in best-of-breed solutions this year, and this is still a nascent opportunity.

In Part 1 of this three-part series, we discussed why a best-of-breed ecosystem is the future of procurement and why CPOs must be invested in delivering against elevated technology expectations. In this second post, we will further explore what a best-of-breed ecosystem entails and how it’s changing the role of traditional models for procurement technology.

What are the elements of the best-of-breed ecosystem architecture? 

Procurement must deliver value to customers, with the business stakeholder at the center of the process. With its deep reach into every enterprise function and across the extended value chain, a best-of-breed ecosystem is critical for CPOs to immediately reduce complexity, increase speed and scalability, and ultimately manage costs and deliver value.

A best-of-breed ecosystem requires two elements:

1. An open architecture hub that enables seamless integration and collaboration across platform boundaries
2. Built-for-purpose solutions that are nimble and bold enough to meet end-user expectations

A best-of-breed ecosystem needs to include solutions that span the end-to-end procurement process, including service sourcing, contract management, market intelligence, spend management, risk, and compliance. These solutions need to address specific user requirements, with the hub bringing all of this together for greater speed, efficiency, and cost savings and better business outcomes.

In more advanced ecosystems, point solutions will collaborate or talk to each other via the hub technology solution, making the end-to-end user experience frictionless and fully transparent. Much like many app experiences consumers already enjoy on their smartphones, a single interface can intuitively bring users anything they need for the strategic sourcing of services without needing to know where one solution ends and another begins.

Why is the ecosystem approach better than traditional procurement models? 

New innovations are being developed every day in the procurement realm powered by AI and other leading technologies. Traditional solutions cannot deliver the expected speed, efficiency, and results on their own without newer innovative platforms thus the two need to coexist and complement each other. There is room for many different procurement solutions, and this is something that business stakeholders expect and demand, as “one size doesn’t fit all.” Procurement teams need to deliver the best solution that will anticipate the requirements of the business and provide additional value extending far beyond the pure automation of the process.

The consumerization of enterprise procurement only makes this demand more pressing. Technology is slowly transforming the procurement experience with some of the more advanced point solutions leading the way and changing the expectations of procurement’s customers and business stakeholders. Improving the overall sourcing and procurement experience is what will effectively drive adoption, ensure process compliance, and—finally—deliver the value and outcomes that CPOs have been pursuing for years.

With the agility required from enterprise procurement teams today, it’s clear that end-to-end systems need to be complemented with best-of-breed solutions to solve the most meaningful business challenges. Only the best-of-breed ecosystem can deliver the depth and scale required by procurement’s varied stakeholder groups.

In the third and final post in this series, I will discuss how CPOs can successfully lead the transition to a best-of-breed ecosystem, initiating a unique and transformational journey in partnership with the executive team, functional stakeholders, and strategic suppliers.

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Keith Hausmann is Chief Revenue Officer at Globality.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing enterprise growth and supplier diversity.

Procurement is ripe for reinvention with the rapid consumerization of the enterprise, and business stakeholders are demanding the same immediate, elegant and intuitive experience in the workplace as they are accustomed to in their daily lives. CPOs and their teams are faced with the reality that, without robust, consumer-like procurement processes and approaches, including the untapped area of strategic service spend and supplier management, they cannot succeed. It’s also clear that CPOs need to exercise a different set of skills and expertise to advance corporate growth strategies and turn supplier and value chain capabilities into lasting competitive advantage.

This can be achieved only with new operating models and with a completely different approach to digital innovation that is focused on creating value for business stakeholders and customers. It requires a procurement ecosystem––an interconnected network of “best of breed” solutions that uses AI, machine learning and other technology to deliver a seamless and effective experience for the end user.

Business stakeholders at the center of the process

Recent technology advances have made it possible to consumerize the buying experience, using truly innovative solutions that put the business stakeholder at the center of the process, which accelerates adoption to deliver the value CPOs care about. Only an ecosystem approach can deliver the specific capabilities companies require without having to settle for a one-size-fits-all solution that doesn’t meet the end user’s needs or expectations.

In this three-part series on the best of breed procurement ecosystem, we will discuss the following:

1. Why a best of breed ecosystem is the future of procurement and why CPOs must be invested in delivering against elevated technology expectations
2. What a best of breed ecosystem entails and why it is better than traditional models for procurement technology
3. How CPOs can successfully lead the transition to a best of breed ecosystem, including the steps they must take to start the journey and ensure it is completed successfully

The only way to future-proof procurement

In their report, The Future of Procurement, Dr. Elouise Epstein and Stephen Easton make the case that building a digital ecosystem is the best—and perhaps the only—way to future-proof procurement.

“Embrace the new architecture, and adopt individual solutions, updating them as they evolve. This route lets companies enjoy the benefits of being a first mover and influence the evolution of these technologies. This is the least risky in the long run because it avoids overinvesting in what will rapidly become outdated technology.”

Epstein and Easton reinforce the long-term opportunity for value creation that the digital ecosystem approach offers to CPOs and their procurement teams. End-to-end platforms pieced together with acquisitions of varied solutions tend to lose their innovative edge and focus, whereas built-for-purpose solutions are nimble and bold enough to unlock greater value. A new technology stack of microservices offers the best of both worlds: a seamless user experience with collaboration across platform boundaries and access to the unique innovation driven by each of these individual solutions.

The emergence of new technologies and technology frameworks

The future success of the CPO is increasingly dependent on how they use procurement technology. The demands on and expectations of procurement are changing rapidly and dramatically, and the shift has already begun—moving away from the historical focus on spend management and benchmarking supplier performance. A recent Horses for Sources study found that 56% of procurement executives need and want their intelligent automation agendas to be industrialized within 2 years or less. Procurement’s new objectives center on translating supply market value into product or service value for the end customer. The procurement function of the future must be top-line driven, not focused solely on cost savings.

CPOs who want to deliver greater value and impact and lead the next phase of procurement evolution in support of the CEO’s revenue and market share targets will need to embrace these bolder objectives. CPOs must ensure they have the right platforms and technologies that enable their teams to meet the business’s expectations.

Rather than continuing to settle for the limited results of legacy procurement processes, CPOs must embrace new technologies and technology frameworks:

• Redefining the business challenges and opportunities that are critical for future growth and applying emerging technologies such as AI, blockchain, and advanced analytics to those areas instead of focusing on the problems that have plagued procurement for decades
• Embracing the idea that an ecosystem model, with its extendable-yet-precise functionality, is vastly preferable to the cumbersome modular suites of years past—especially when the ecosystem is anchored around an AI-enabled data hub as the central integration point for procurement insights and a seamless end-to-end user experience

A seamless, transparent process that delights stakeholders

CPOs looking to further justify making the switch to an ecosystem model can compare the enterprise buyer’s journey with that of the day-to-day consumer using any e-commerce site. Every usability challenge or delay that a user experiences leads to lost value, frustration, and ultimately lost business. It doesn’t take long for a consumer [or stakeholder of enterprise procurement] to walk away and find another way to get things done.

Satisfying their internal customers has always been a challenge for procurement leaders, and the rising expectations generated by modern e-commerce have made the difference in the two experiences more striking. CPOs must deliver a seamless process with full end-to-end transparency and a delightful experience if they are to achieve what stakeholders and the executive team need.

In the next post in this series, I will share more on what a best of breed ecosystem entails and why it is the only option to meet the increasing demands on the CPO and their teams. Technological advances will continue to heavily influence procurement operating models—and, with the advancement of automation that is disrupting all industries, CPOs must be ready.

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Keith Hausmann is Chief Revenue Officer at Globality.

Watch this introductory video showing how Globality helps companies select the best service suppliers at the right price, while at the same time prioritizing enterprise growth and supplier diversity.

This is the final part of a three-part series about Why AI Matters to the CPO. To read part 1, What’s Real and What’s Not, click here, and to read part 2, Simple Facts about Complexity, click here.

We have already discussed the ways in which AI-enabled strategic sourcing helps procurement and internal stakeholders address current complexities and challenges, but, as every CPO knows, it is critical to have a bold vision for the future as well.

The more we allow technology to transform our processes, the larger procurement’s value proposition will be. Procurement’s willingness to focus its talent in strategic relational areas while pushing the limits of available technology will determine the slope of its evolutionary path.

Beyond increased speed and facilitated simplicity, AI-enabled strategic sourcing can radically alter capabilities and mind-sets around demand management, self-service sourcing, and supplier management.

Demand Management

Demand management allows companies to reduce costs—not by sacrificing quality or solely driving the price lever but by questioning whether purchases need to be made in their requested form. Most simply, demand management reduces the breadth of effort and or ambiguity associated with contracts, but this is only the beginning. With improved insight, demand management can eliminate overlapping or redundant suppliers to improve economies of scale or rationalize specifications and requirements to ensure they match the actual need. Flagging these opportunities is yet another value-add associated with AI. Identifying supplier overlaps and validating specifications are easy fixes for technology, and yet the return can be significant.

Self-Service Sourcing

The increasingly digitally savvy workforce has high expectations for the online buying experience. Non-transformed strategic sourcing is too slow, too cumbersome, and too constricted to be their preferred channel for meeting service and supply needs. They want to handle the sourcing themselves, and, as long as the proper guide rails are in place, procurement should encourage, empower, and reward this desire. AI-enabled strategic sourcing can facilitate this process through scoping, curated supplier short lists, and instant supplier proposal comparisons. And yet, providing the functionality is not the same as delivering an “experience.” Buyers want to see proposals in an elegant side-by-side comparison without having to rely on a team of people to handle data normalization or copying and pasting before they can look at the options and make decisions. 

Supplier Management

The majority of our discussions about why AI matters to CPOs has been internally focused, but procurement has to consider the supplier experience as well. Suppliers have been vocal about their frustration with the traditional RFP process, and not just because it is costly and time consuming. They often point out that the rigid structure of RFPs prevents them from putting the best proposal—and the best solutions—in front of buyers. If procurement can resolve this issue, the enterprise stands to gain in the form of closer supplier collaboration and increased innovative potential. With AI, suppliers can easily define the scope of work, key milestones, deliverables, project costs, expenses, and supporting materials in response to proposal requests. If buyers request more information, then suppliers can dynamically revise their proposals until agreement is reached, removing ballooning budgets and scope creep.

The strongest case for why AI matters to CPOs is understanding how they want to spend their time and what value the enterprise realizes through that time. Without AI-enabled strategic sourcing, CPOs will continue dealing with the foundational cracks in legacy procurement technology that continue to fall short of services spend and complex intent. They will be stuck haggling about project scope or settling for subpar results because resource constraints prevent them from doing better.

With AI, the CPO’s focus completely changes, shifting them to a trusted advisory role that positions them to lead the most effective spend management projects. Every part of the procurement value proposition becomes better if it is part of something bigger. Buyers get the experience they are looking for through a streamlined process that leads them to the most diverse, innovative, and cost-effective service providers. Suppliers are empowered to put forward the best, most creative proposals, and procurement achieves the professional fulfillment it desires.

AI matters to CPOs because the transformation it enables opens the door to the next level of procurement achievement.

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Keith Hausmann is Chief Revenue Officer at Globality.

This is part 2 of a three-part series about Why AI Matters to the CPO. To read part 1, What’s Real and What’s Not, click here.

As I wrote in my previous post, procurement teams are being asked to do more with less, all while addressing high levels of complexity across an expanded range of spend categories. For CPOs, this creates situations where they must apply every resource at their disposal to improve strategic sourcing—including technologies such as AI.

Automation is certainly not new to procurement, but, up to this point, most strategic sourcing technologies have moved legacy processes online rather than transformed them. Now that the “low-hanging fruit” spend categories have been managed, procurement is turning its focus to complex spend categories—including services. The strain from this mismatch is evident, as most strategic sourcing platforms struggle to support the advanced objectives associated with services spend.

In these cases, I often refer to the “complex intent” of business stakeholders.  This is the encapsulation of what companies really need from service providers. When the services provided are knowledge based—such as IT, consulting, marketing, HR, or legal—it can be challenging to articulate the requirements or the “demand” for an RFP.

Procurement leaders have a double incentive to embrace and capitalize on this complexity: first because they have to deliver savings and value in parallel, and second because they want other enterprise functions to seek them out as internal partners. Decision makers should be drawn to procurement teams for the experience they offer, not forced into working with them for the sake of compliance.

With the help of AI-enabled strategic sourcing, procurement can address this complexity with speed and simplicity—without sacrificing results.

Speed

Historically, speed was achieved by completing sourcing tasks faster using standard methods, but that is no longer meaningful. Meaningful speed changes how tasks are completed or whether they even need to be completed by leveraging data and applying the analytical power of AI. When buyers are uncertain how to define their specifications and requirements, basic information inputs can be used to guide them toward a curated short list of suppliers that can meet their demand. With that information, adjustments can be made, and the short list can be quickly refined. This process can be delivered digitally in an instant, improving results and the user experience.

Simplicity

When documenting specifications and requirements is already a challenge, figuring out how to capture them even with the help of technology is an additional barrier. Once again, this is an area where AI can provide critical assistance. With intuitive data input supported by natural language processing, stakeholders can provide their needs conversationally. This makes it possible for stakeholders to walk through their requirements intuitively, leaving AI to do the work of turning them into supplier-ready specifications in 30 or 40 minutes rather than hours, days, or weeks.

Results

In traditional strategic sourcing, the limits of human capacity (not capability) confine results. Only so many suppliers can be manually evaluated in a reasonable time frame. When we rethink sourcing in the face of “complex intent,” we once again realize technology has a critical role to play. Using AI, companies can compare, evaluate, and award contracts based on individual supplier merit, unencumbered by the limitations of resource availability and time. The selection of the best suppliers for each specific demand will lead naturally to improved results because it fully engages the pool of preferred and new suppliers and eliminates the buyer’s unintentional bias toward “known” suppliers.

Information about enterprise service suppliers is just as accessible as information about any other product or material. The difference is that the range of providers is so wide—and the differences between their offerings so nuanced—that without the support of AI, procurement cannot deliver value in the time allotted. Procurement cannot take this next step without the enabling capabilities of AI.

In the final part of this series, I will share how AI-enabled strategic sourcing can help CPOs transform the expectations that the rest of the leadership team brings to their engagements with procurement.

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Keith Hausmann is Chief Revenue Officer at Globality.

Today’s procurement leaders face a series of unparalleled challenges. To help their teams rise to the occasion, CPOs must think differently about how they utilize people, processes, and current and emerging technologies. The decisions made today will have a deep and lasting impact across the enterprise value chain and on the suppliers with which companies work.

One of the technologies that CPOs are showing increased attention to is artificial intelligence (AI). Although AI is not new, dating back to the 1950s and achieving maturity in the 1990s, it has not been an area of distinct focus for procurement until now. Today, however, AI’s primary capabilities—including the ability to “learn” and “think” quickly and with a lower error rate than humans—may be precisely what procurement needs to address supply challenges with goods and services.

The world of the procurement leader is rapidly evolving. Leading CPOs are gaining ground on a number of fronts, including value creation, stakeholder satisfaction, and alignment with enterprise objectives. Procurement is increasingly leveraging AI and machine learning to anticipate and ensure business continuity and proactively manage events with a focus on speed and value. AI can not only improve efficiency and results in the short term but also expand the scope of what procurement can achieve in the longer term.

In this three-part series, I provide the context and details that CPOs need to understand about the value of AI for procurement and sourcing, starting with what is real and what is not.

AI Delivers Speed at Scale

Technology can quickly process vast amounts of data and deliver qualified options or recommendations. The legacy sourcing process is in desperate need of improved speed and scale. The business does not have time to wait for a cumbersome request for proposal (RFP) process to be run, and procurement cannot constrain the number of suppliers considered for the sake of time. AI can shorten RFP cycle times by as much as 50% by applying analytics to available information, improving needs scoping, comparing those needs to prequalified suppliers, and quickly presenting a curated supplier short list.

AI Doesn’t Replace People, It Augments Them

AI has some procurement professionals worried that they are at risk of losing their work to robots that never make mistakes and have no need for downtime. But AI is not about human replacement—it is about allowing humans to focus their irreplaceable capabilities where they are needed most while allowing technology to handle data-driven tasks that can be automated. Only people can develop category strategies, deeper partnerships with stakeholders, and innovations with suppliers. Further, humans provide the intent behind the scope for each sourcing project, while well-programmed AI improves and streamlines the process.

AI Learns Over Time

Whether we realize it or not, we are involved in patterns all the time. Identifying these patterns and applying them to relevant future events are specialties of AI. When procurement professionals apply these capabilities to strategic sourcing, they gain the ability to apply pattern matching to past sourcing requests, uncovering latent connections among spend, suppliers, and demand that they can use to better inform decision-making. In addition, AI ensures each strategic sourcing project is not a linear, one-time event. AI improves over time, incorporating feedback about supplier curation, award decisions, cost performance, and service delivery.

Today’s procurement technology must be applied differently because of the scope of the challenge and the best professionals’ desire to do increasingly challenging and strategic work. AI is fit for purpose in these conditions. AI is a step forward to the next-level performance that procurement has long called for, but it is not a total solution. Without it, CPOs have to choose between speed, granularity, and results. With it, they can achieve all three while maximizing procurement’s impact, emphasizing total value, and building strong stakeholder relationships.

In part 2 of this series, I will address procurement’s “complex intent” and how AI-enabled strategic sourcing has evolved to the point where it can handle even the most complicated service categories.

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Keith Hausmann is Chief Revenue Officer at Globality.

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Keith Hausmann is Chief Revenue Officer at Globality.

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Bill Brooks is General Manager of Legal Sector at Globality. 

Sonia Mathai is Chief HR Officer at Globality. 

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Martin Henley is SVP of Technology Services at Globality. 

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Erez Yereslove is Chief Marketing Officer at Globality

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Martin Henley is SVP of Technology Services at Globality. 

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Mili Desai is Director of Legal Services at Globality. 

1) Without influence, innovation strategies fail.

Any savvy CIO knows innovation is crucial to success. But how is the person whose team is known for fixing laptops and patching thousands of security vulnerabilities each week supposed to just switch to the role of innovation driver?

Successfully driving innovation means CIOs must bring people along on a journey with them. That doesn’t happen overnight. Starting any conversation about innovation, especially with stakeholders, requires much preparation. This may seem counterintuitive to the energy and enthusiasm that often drives innovation. A CIO might expect that people would quickly become excited about proposed new initiatives; but realistically ideas and proposals can often be met with skepticism and, in worst-case scenarios, can stop any potential progress before you’ve even started.

You have to be strategic about balancing conversations about innovation with the rest of your day job. As many CIOs know, it may well happen that while pitching an innovation strategy to the board, a senior executive or the CEO might just ask why their email wasn’t working that morning. This can certainly take the edge off an innovation discussion!

Truly advancing innovation takes a top-down, bottom-up approach. You move people one step at a time. If you push topics too quickly, especially in a room where potential resistors can shoot down your ideas, you may be doing yourself more harm than good.

Getting key decision makers and influencers on board—senior executives, as well as employees throughout the organization—takes time.

2) You won’t have a strong case for enterprise transformation without data.

In one of my roles as CIO, I was tasked with driving a change initiative affecting 650 people across the organization. This was a difficult global transformation, which, while meeting the organization’s targets, had a significant impact on a lot of people’s lives.

Partway through the initiative, my leadership team and I decided we needed more feedback from the team as a whole on how the initiative was progressing, and, knowing that the impacts were significant, what we could do better. We decided that the best way to obtain this transparent feedback was to conduct an anonymous engagement survey. However, much of the senior management, particularly the HR team, did not believe the timing was right in the context of the wider organization, so the survey didn’t get the green light.

A few more weeks passed. I was hearing a lot of feedback in the corridors on the impacts the initiative was having, but I had nothing concrete to act on. I decided to add an additional step to the process (and ask for forgiveness afterward), and went ahead with the engagement survey.

It had the desired effect on my team members, who were able to vent all their frustrations. It provided us with a clear set of topics we could work on to improve morale.

And what about the naysayers? In fact, the survey was seen as a success by many, and several other departments asked to conduct surveys for their teams. The technology team was viewed as pushing ahead—and caring about what the team members think.

Although it was a risk to go ahead with the survey, it turned out to be a win.

3) Procurement won’t be a strategic advantage unless partners are engaged in the journey

Procurement is often seen as a necessary evil. Historically, it’s an extremely slow process, but adopting an innovative approach can support you in convincing people of its strategic nature.

Involve your partners (vendors) on your journey to cut costs. For example, if your organization has a cost-savings target, you can translate this to your partners, as you need their help to drive these cost savings and show some real reductions in their current scope of work.

You can also use procurement to support your broader strategy. If you’re implementing a new operating model, for example, then ensuring the partner’s role is clearly important. This clarifies for everyone on the team the importance of those relationships to your business. Well-managed procurement can then help drive lower costs and better service.

Innovating in the procurement space can often be an easier sell. Because it’s not frequently seen as strategic, there’s less pushback by those concerned with the risks of innovation.

However, use care with the numbers. I’ve made the mistake of having the tech procurement team speak to senior stakeholders with little knowledge of the procurement processes. The stakeholders very quickly get excited about the potential and scale of the savings discussed. Later, they realize much of this is already built into the budget or will take several years to achieve. It’s cost avoidance. It’s much more effective to understand in advance where your audience is coming from and then tailor the discussion accordingly (easy to say, hard to do). In this case, showing only the savings to the actual budget, even if the numbers are smaller, would be much more powerful and useful in demonstrating the true value of procurement.

The biggest lesson? It’s all about people, and building trust is the key to turning failure into success.

Failure teaches us that building trust is the most crucial element of success. Without trust, your initiative is going to, at best, require much more hard work and, at worst, is likely to fail. With it, you can achieve what you set out to do—and usually much more.

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Martin Henley is SVP of Technology Services at Globality. 

TIP #1: CREATE URGENCY TO INNOVATE

Think about how your calendar has played out for the last three months. I am sure it was filled with many meetings. Now think about how many of those meetings were about running the business vs. transforming how you run the business. The overwhelming majority of the audience at my conference session shared that they spend their time running day-to-day procurement business. That’s not OK, and we have to change that.

It is critical to create an environment, a mindset, and to carve out time to bring innovation with the help of technology. The time is now. There is no waiting for tomorrow.

“Courage is doing what you are afraid to do.” —Eddie Rickenbacker, WWI

This quote from Eddie is a great one to keep in mind—we are all afraid of technology and change to some extent. Steve Chang, a military veteran on my team, is a constant reminder for all of us that courage is doing anything that we are afraid to do.

Speaking of technology and changes we are afraid of, automation is inevitable despite uncertainty it may currently be raising. A Gallup study shows that 85 percent of Americans use apps, from streaming services to ride-sharing apps—all of which already make healthy use of AI.¹

AI is proven to boost productivity, and we have to start investing in upskilling employees so technology can be complementary to human efforts. As just one example, Amazon is driving tremendous efficiency with robotics. The retail giant sees human and robotics collaboration as a key enabler, where robots will do the heavy lifting and human’s cognitive ability will be better leveraged—a perfect symphony of humans and machines. 

This report from Accenture states that the impact of AI technologies on business is projected to increase labor productivity by up to 40 percent—enabling people to make more efficient use of their time.²

After watching Globality’s AI in action and hearing feedback from our clients, it is clear that AI successfully performs the tasks of a human at a scale and speed that humans can never reach. Our human brain is biased, our operational capacity is limited, and our memory is finite—whereas the power of AI provides unlimited operational capacity. The machine never gets tired, it has infinite memory, and not just that—the unbiased decisions it can make while analyzing and learning from millions of data points is something humans can never do. That is the reality. 

An AI system should be your next hire to really boost the capabilities of all your existing teams.

I recently listened to this debate at Intelligence Squared (“Can AI change your mind?”) where an AI system debated a human on the topic of subsidizing preschool. It is mind-blowing to see how the AI system argued brilliantly in favor of the position it was given to support subsidies and contextualized knowledge better than any human could.  

This example proves that AI is not a buzzword anymore. It is solving real problems—for both consumers and businesses.

TIP #2: TAKE THE DRIVER’S SEAT AND GO BEYOND THE STATUS QUO

Procurement teams are heroes behind the scenes—but it is time to take the driver’s seat. With the right technology enablement and talent development, you can revolutionize sourcing and more. It is critical to be proactive when it comes to identifying and delivering value for all stakeholders. It starts with empathizing with the stakeholders to understand their pain points, collaboratively define the problems, brainstorm ideas, and test them quickly.

Instead of Procurement being pulled in different directions, this is about taking control and getting strategic.

TIP #3: DON’T WAIT FOR CHANGE MANAGEMENT—BE THE CHANGE AGENT.

We shouldn’t let change manage us—Procurement teams shouldn’t wait for C-suite executives to come and tell them that they need to automate. This is an incredible opportunity for Procurement to become the change agent.

Here are some actionable steps:

• Take time to assess and understand gaps and opportunities, then strategically analyze them with your team.
• Then go out and look out for technology that could solve for these problems—find an executive sponsor, test and experiment fast to see if it is indeed going to solve the problem, and be a game changer.
• If you see potential and are ready to implement, it’s critical to invest heavily to bring all stakeholders along on this journey.
• Lastly, identify how to measure success: implement, measure, and keep innovating.

Following my session at the Indirect Procurement Conference, we had an engaging workshop where Procurement teams applied the design thinking process and brainstormed challenges and solutions. The top challenges included driving better decisions and stakeholder engagement, as well as issues with project scoping and change management. Procurement leaders in attendance came up with creative solutions for these. You can see the results here: Procurement Innovator Workshop - Challenges and Best Practices.

Indirect Procurement has to be nimble and accelerate its transformation from a ship to a speedboat. To achieve this transformation, Procurement teams need to take charge, disrupt themselves, and lead innovation for their organizations.

¹ Reinhart, “Most Americans Already Using Artificial Intelligence Products,” Gallup, March 6 2018

² Purdy, Daugherty, “How AI Boosts Industry Profits and Innovation,” Accenture, 2017

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Jay Krishnan is VP of Product Marketing at Globality. 

Many in the legal profession have likely heard something about artificial intelligence (AI) by now. But in this nascent stage of a game-changing technology, most lawyers (along with lots of other professionals) are just starting to explore how AI can benefit them and their firms.

The immediate value of AI is the automation of complex tasks so that they’re done more efficiently and with better results every time. While the skills and specializations of practicing law are hard-learned and of high value, there are aspects to running a legal function that are ripe for what AI can do. Procurement, an ongoing challenge for general counsels (GCs), is one of those.

Most large corporations already work with the best-known law firms; it takes excellent legal support to get to that level of growth. But a company’s go-to firm may not be the best solution for every business need. With the burdensome process of scoping new requirements, creating and issuing RFPs, then finding and sourcing new providers, it’s often easier just to stick with incumbents, even if they may not be the best match for a new requirement or type of project. This is where AI can really make an impact.

At Globality, we’re applying AI to upend the traditional method of sourcing legal and other B2B services, providing an alternative approach that quickly matches GCs to the best service providers at the right price for every project.

For example, Luther Rechtsanwaltsgesellschaft mbH, one of the ten largest law firms in Germany, is well positioned to help international enterprises that want to enter or acquire in the German market. That’s expertise that home-country firms just wouldn’t have. Luther traditionally spent large amounts of time responding to cumbersome RFPs, but Globality’s AI-based solution helps potential customers find the firm more easily; Luther is able to present a legal framework that first helps clients better understand what services they need and then engage accordingly with clients it can truly help. This saves the client and the provider time, frustration, and expense.

Axis Law Chambers in Pakistan offers another great example. Given its location, Axis finds that many clients aren’t sure of the regulatory regime when entering the region. Through the Globality platform, GCs seeking legal assistance in Pakistan can be matched to Axis to take advantage of its specialized expertise. That’s particularly useful for getting insider know-how on things like how long it takes to process an application or the timeline for a court process in Pakistan. Because the Globality platform helps Axis share information with the client throughout the entire process, its clients never feel blindsided or unprepared when obstacles crop up.

There are multiple levels of value for GCs in the Globality approach. First, identifying the best outside counsel for any particular engagement is much faster and more efficient. With specificity, thoroughness, and quality of information about the pool of available providers—wherever they may be in the world—GCs can far more quickly and efficiently source the right help while eliminating the costly and onerous RFP process.

There is also the benefit of saving money on legal fees, because GCs will be able to compare and contrast the best lawyers for a particular engagement and mine data about them to drive down costs. Perhaps most importantly, GCs end up with a better result, because the best lawyer for any given case will be engaged.

This is not to suggest that the large incumbent firms a company currently uses should or will be tossed aside. In fact, as providers, they may in turn make advantageous use of the Globality platform. But one firm cannot excel in everything. Take commercial litigation, for example. In my own prior experience as a GC, my employer was a defendant in commercial litigation. Our first time in court, using our established counsel, we had a hung jury. Upon retrial, with a different, specialized attorney, we won. The attorney was the only differing factor. Any GC with a few years in the role has likely had a similar experience.

The service providers also benefit by saving the effort of responding to RFPs they know they’re unlikely to win because they’re not really the best fit for a requirement. And they’ll be more readily considered for other new opportunities to which they may be matched. It’s a win-win all the way around.

In reality, AI presents a revolutionary opportunity to disrupt the highly traditional domain of legal services, where buyer–provider relationships are often based on years of building trust. While new technology won’t ever negate or replace those relationships, as GCs give considered weight to suggested new providers who match their needs exactly, AI offers the potential to break the mold and improve the playing field for them and providers alike.

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Bill Brooks is GM of Legal Sector at Globality.  

Picture a marketer named Lena at a global apparel brand, charged with creating buzz for the opening of a new store in London. It’s happening in less than three months, and she needs an agency partner that can drive awareness. She’d like to build an in-store brand experience, potentially using virtual reality to showcase the brand’s penchant for innovation, but time is short.

A couple of event agencies Lena has worked with in the past come to mind, but what she needs is a cutting-edge digital shop to concept and build something unique that people will share on their social channels. So she opens her laptop and writes a brief in about 30 minutes, using a digital workflow that prompts her with focused questions about the capabilities she’s seeking, as well as her objectives, target audience, timeline, and budget.

Lena submits the brief, and a shortlist of agencies is returned within minutes. She scans the information about their capabilities and experience and clicks through VR case studies with objectives and outcomes similar to what she has in mind. Two of the agencies have worked with her company previously, though not with her team. She chooses the three she likes best and shares her brief with them and offers to schedule introductory calls to answer questions.

She closes her laptop and heads to her meeting. All told, the process of creating a brief and shortlisting three qualified agencies has taken an hour.

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No doubt you’ve already read about how artificial intelligence is poised to change the way we work—from far-fetched predictions of how robots will replace us to more nuanced discussions of how AI and machine learning will automate mundane, repetitive tasks, allowing us to focus on problems requiring creativity and empathy.

If you’re a marketer, the concept of harnessing AI to work faster and smarter isn’t science fiction, nor is it a sometime-in-the-distant-future proposition. At Globality, our clients benefit from an AI-powered sourcing platform that quickly identifies highly relevant agencies based on the specific, unique requirements of the client’s project.

To appreciate the value of AI-based matching, it’s useful to think about how clients are still frequently choosing their agency partners—a process that amazingly hasn’t materially changed in the last 25 years. There’s a deep irony in the fact that the most successful brands have managed to marry technology and creativity, yet many are still hiring agencies like it’s the ‘90s, through a slow and tedious analog RFP process.

Compounding this inefficiency is the continued shift toward project-based relationships and away from AORs. Behind this sea change is the fact that it’s hard for agencies to be good at everything in a marketing ecosystem this complex; brands want partners that excel in specific areas, such as digital retail, analytics, and influencer marketing. There’s now seemingly an agency for every discipline and target audience you can think of, which in theory should allow brands to be more innovative than ever before. And yet, all of the legwork required to identify and hire new agencies creates an inertia resulting in clients sticking with known quantities, which is a real impediment to innovation in large marketing organizations.

I’ve talked to several CMOs who would love to improve their agency management practices and ensure that the right partners are being awarded the right work for their skill set; however, they simply don’t have time to put this into practice.

To be clear, innovation doesn’t always require agencies that are wholly new to the brand. In a sprawling marketing organization, the odds are pretty good that the perfect partner for any given brief has already been hired by some internal team at some point in time. The challenge is making “long tail” agencies discoverable when there’s another fit for their skills—and capturing feedback on their performance to improve future matches. 

On the supply side, the agency ecosystem is increasingly rich and varied, and many shops have been able to compete and thrive because they’ve carved out a niche. Consider a few examples from Globality’s network of agency partners, such as Playgrnd, a retail and experience design agency; Volume AI, which focuses on conversational AI; and NellyRodi, a business and creative intelligence agency which specializes in trend forecasting for fashion and beauty clients. As new technology lets marketers more easily discover and evaluate the best shops for every requirement, agencies that hone an expertise will be rewarded with more opportunities to do stand-out work they’re passionate about, creating a positive feedback loop which is good for both sides.

Ultimately, it’s not that AI and machine learning can handle the task of generating agency shortlists better than people can. The point is that marketers’ time can be put to far better use in areas such as strategy, creative ideation, and even change management to enable digital transformation in their organizations—which is the kind of work that ultimately creates value for brands.

I believe marketing leaders have an enormous opportunity to rethink how they manage and work with their agencies, and I’m excited to play a role in shaping a better future for the ecosystem. 

Keep in mind that what we see now is just the beginning of what AI will enable brand managers to do in the near future. In a few years’ time, Lena will be guided by a virtual assistant that’s learned from millions of previous projects when she’s looking for an agency. In addition to helping her write a brief that perfectly captures her needs and matching her with well-suited agencies, it will also predict the results she can achieve with each potential partner and at what cost. Ultimately, early adopters like Lena’s company will increase the pace of innovation and personalization, while brands who rely on old-fashioned ways of working may fall significantly behind.

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Charlie Byron is Head of Marketing Sector (EMEA) at Globality.  

Innovative sourcing technology can enable local businesses to dramatically expand their reach and transform into global businesses; it can empower already global businesses to go where they’ve not gone before. This is possible when you have the right partner for every project. In this blog post, we’re starting a conversation about finding those partners.

Globality has spent several years developing a Smart Sourcing Platform to help businesses transform the buying and selling of services.  We utilize the power of Artificial Intelligence (AI) to streamline and simplify what global business leaders have told us is a significant pain point, and an untapped opportunity in the current procurement process.

In the US alone in the post-war period, the manufacturing and agriculture economies shrunk significantly while the services economy quickly grew to nearly 80% of GDP today. Western economies have been going through the same transformation. Services just surpassed 50% of the economy in China, and there is every reason to think this growth will further increase and accelerate to a higher extent around the world.

According to a January 2019 report from McKinsey, the global compound annual growth rate as a percent of GDP from 2007 to 2017 was 7.8% for technology and telecommunications services, and 5.3% for business services.¹ In addition, according to Gartner, IT services spend alone is projected to total more than $1 trillion in 2019, increasing 4.7% from 2018.²

Despite the many policies and initiatives that are currently aimed at goods trading (e.g., stimuli and tariffs), the services sector is growing 60% faster than manufacturing and trading-goods. Companies are digitizing, reducing wait times, adding efficiencies, and driving up overall growth and profits.

Whether you’re a general counsel, a marketing executive, or an information technology leader, an intelligent sourcing platform like Globality’s will help you find the best legal firm, advertising agency, or IT solutions provider at the right price, for every project. It enables you to thoroughly define the scope of your project upfront, and dynamically find and compare relevant and qualified service providers through instant service matching. With constant learning, each project search becomes smarter and more efficient delivering quantifiable results for your team.

This new Innovation Blog will feature Globality’s executives and other thought leaders discussing the possibilities of this new landscape. We have insights from providers in Germany who are working with Fortune 500 companies in Dallas, businesses in San Francisco who are calling on law firms in Pakistan, and consultants from around the world who are challenging the antiquated request for proposal (RFP) process - all of them realizing significant new opportunity as a result.

In the coming weeks, we’ll invite others across different sectors and industries to share their experiences and perspectives. In the meantime, we’ll share key insights about how global business leaders around the world are transforming the way their companies manage services sourcing and unearthing untapped opportunities across oceans and time zones. This will inevitably create more opportunity for more people in more locations around the globe.

It’s an exciting time to revolutionize the future of procurement and services, and Globality is proud to further the conversation. Follow us here, and be a part of this critical dialogue.

¹ Globalization in transition: The future of trade and value chains, McKinsey Global Institute, January 2019

² Gartner Market Databook, Q418 Update, Gartner, Inc., January 2019 

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Erez Yereslove is Chief Marketing Officer at Globality.