The digital transformation of procurement is well underway, and any organisation that is clinging to analogue procurement in today’s digital world, is in danger of extinction, warn experts. This was one of the key messages from the procurement maestros who shared their insights with over 150 IT and professionals who gathered online for the third annual IT Sourcing Summit hosted last month by Smart Procurement World.
Held under the theme “Digital Darwinism – Embracing the Technological Revolution”, the summit put the spotlight on the state-of-the-art procurement technologies, processes, tools and expertise that are driving bottom-line value for businesses that have invested in the digitalisation of their procurement.
In his riveting presentation, MTN’s Group Executive and Chief Procurement Officer Dirk Karl discussed the top enabling technologies for procurement and revealed how these are being leveraged by the continental telecoms giant which has an annual procurement spend of USD12 billion. MTN’s Global Sourcing and Supply Chain (GSSC) division has developed and successfully implemented several digitalisation initiatives. These digital programmes are focused on combining a high-performance blend of automation with intelligence as well as business analytics with machine learning.
During the COVID-19 pandemic and other supply chain crises in recent years, MTN’s early investment in digital transformation paid off, Karl told IT Sourcing Summit attendees “We were in a position to respond to the disruptions with a different kind of expertise than other operators. Our business resilience exercises delivered business value. We can ensure early bookings in terms of capacity and that our 19 markets across Africa get supplies in time. If there are logistics issues, including issues at ports and borders, we can reroute materials. We have the entire supply chain function on our watch.”
Data scientists are now integral members of the procurement team at MTN, ensuring that the right data shapes procurement decisions and strategy.
Karl’s other message for IT Sourcing Summit delegates was that procurement professionals must develop their technology skills and know-how. “In our digital transformation journey, we have looked at the skill sets of our people and we have had a radical cultural shift. We now have a huge emphasis not only on the core expertise someone brings into sourcing or brings into a supply chain but also their digital capabilities and skills,” Karl said.
He discussed the value being added by MTN’s “bot”, an artificial intelligence (AI) assistant and decision support application (DSA) named GeSSiCa. ““She improves business efficiency and enhances fact-based decision making,” explained Karl. “GeSSiCa delivers market intelligence, including pricing benchmarks, supplier intelligence and supply chain insights from several external sources as well as performance data in our own markets. These enable us to see how much lead times are changing in terms of logistics or how much price curves and price benchmarks are changing on the market from our strategic supplier by using the AI modules.
“On the analytics side, our recommendation engine enables us to prevent value leakage in cost savings by proactively detecting bundling potential opportunities across the group and across our sourcing calendar using predictive analysis.
“GeSSiCa also analyses the common mix of vendors, and all recommendations for better unit prices that she makes are automatically delivered through the recommendation engine to the sourcer.”
Predictive price modelling is another component in MTN’s digital procurement arsenal. “The recommendation engine combines the sourcing calendar with the predictive price curves, takes into account the optimal period of negotiation by analysing the evaluation of the prices and the behaviour of the vendor, and recommends a future-proof opportunity for bundling. This feature in the recommendation engine enables the procurement expert to optimise the sourcing decision. We also have supplier behaviour analytics,” Karl expanded.
Since her introduction, GeSSiCa has also automated time-consuming, administrative and repetitive tasks inherent within supply chain management. “This gives GSSC staff the opportunity to focus more on strategic procurement and making better business decisions based on accurate data,” Karl noted.
Attendees have commended the 2022 IT Sourcing Summit. “There were great, enriching engagements,” commented Margaret Ngari, Chief Manager of Supply Chain Management Strategy and Planning at the Kenya Revenue Authority.
A well-received addition to the 2022 IT Sourcing Summit was a series of vendor-led demonstration sessions that offered procurement buyer delegates an important opportunity to learn about and evaluate the latest innovations and market-leading solutions. They could also engage with vendors such as leading source-to-pay software provider Oxalys and procurement analytics specialist Agilus and Tradeshift.
Smart Procurement World partnered with Oxayls and Commerce Edge to host the 2022 IT Sourcing Summit.
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Smart Procurement World (SPW) is the largest professional development event for procurement and inbound supply chain, supported and endorsed by industry professional bodies. SPW also achieves professional development for procurement and supply chain professionals while achieving economic development objectives in each region through enterprise, supplier development linking small business to supply chain.
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