Three Technology Trends to Watch that are Impacting Procurement

By Dennis Bouley

July 19, 2018 at 5:04 PM

Technology Trends.jpgTrends like the Industrial Internet of Things (IIoT) and rapidly expanding software defined service processes are driving changes across industrial environments.  In fact, a recent ARC market report asserts that IIoT is prompting 93% of industrial stakeholders to agree that computing power both at “the edge” and in the cloud will be part of their industrial automation infrastructure.

For those in procurement positions, an understanding of important technology breakthroughs such as edge computing, cloud computing and artificial intelligence will help them to both enrich and simplify their jobs and to adapt innovative approaches to solving traditional procurement process bottlenecks.

Edge computing

Edge computing is loosely defined as processing power that is embedded either inside or close to local users for the purpose of enabling analytics and control automation functions. Examples of devices that offer compute capabilities within industrial edge environments include sensor hubs, actuators, IIoT gateways, and edge servers.

IIoT at the edge enables local connected devices to generate data that can yield insights on-premise instead of relying solely on the cloud for heavy computing and analysis, thereby reducing both latency issues and cost while protecting the sensitivity of collected data.

From a procurement perspective, frameworks that facilitate edge computing procurement applications are currently under development in which a marketplace (platform) is established between sellers and buyers. Each buyer has a certain budget for their particular procurement campaign. The sellers access the platform online and offer their computing capacities along with prices for the various services that they offer. When a new offer is uploaded to the system, the platform makes an irrevocable decision, without knowing future information, to accept the offer or not and to allocate the accepted resource to which buyer. Efficient online optimization methods help the platform maximize the total system utility with guaranteed performance.

Cloud computing

More familiar to most than edge computing, cloud computing has gone mainstream in most businesses.  Compared to traditional processing systems, cloud-based systems have proven to be quicker to roll out and easier to customize. They also can help to accelerate the speed and volume of collaboration between suppliers and distributors.  Cloud implementations have helped manufacturers drive productivity by capturing and applying company-wide intelligence and knowledge through the use of analytics and by achieving a higher quality of customer service and customer engagement (e.g., through online order status inquiries online, and via distributed order management and pricing).

Cloud computing, although a known entity, continues to evolve.  In fact, cloud and edge are merging to form “hybrid” infrastructures that leverage the advantages of both while reducing data processing and analysis costs.  Procurement stakeholders will turn to cloud-based and hybrid applications more and more to drive business process transformation and to improve efficiency, speed, and supplier collaboration. Technology trends such as edge and cloud give procurement the ability to capture much more data, and to do a better job analyzing and interpreting that data so that they can be more responsive and cost-effective within their corporate organizations.

Artificial intelligence

Artificial intelligence (AI) implies systems that have been taught or learned how to carry out specific tasks without being explicitly programmed how to do so. AI combines rules and information to carry out automated “reasoned” decisions.

According to a recent Accenture Artificial intelligence (AI) research report, corporate profits will increase by an average of 38% by 2035 in large part thanks to a more advanced deployment of AI into financial, IT and manufacturing applications.  The volume of AI-like machine learning activity has picked up over the last 2-3 years.

AI algorithms quickly look for patterns in large quantities of data and combine that with outside market intelligence in real-time thereby improving both the accuracy and speed of daily decisions.

As AI capabilities get imbedded into procurement applications, repetitive tasks that were tedious and time consuming for the procurement manager are left to the information systems to execute, thereby freeing up the human resource to solve more complex business process issues.



Tags: Procurement AI procurement edge procurement cloud procurement trends
Category: News Article

Dennis Bouley

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Dennis Bouley is Editorial Director of MyPurchasingCenter.com and special advisor to MediaSolve Group, a strategic B2B marketing services firm focused on helping companies and institutions leverage the web and social media to achieve business goals. He spent 18 years at Schneider Electric as Managing Editor of Global Publications, and was responsible for cross-division management of the corporation’s white paper and customer success story processes. Prior to that, he spent 10 years working for IBM managing both small and large accounts. He holds a Bachelor of Arts in Journalism from the University of Rhode Island and holds a Certificat Annuel from the Sorbonne in Paris, France. 


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