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Time for health care supply chains to feel the e-commerce effect?

The evolution of health care businesses over the past few years has often involved these companies becoming more like organizations in other industries. Due to the essential and literally life-saving work that goes on in hospitals and other care facilities, it can be tempting to consider the medical world separate from general enterprise operations.

That kind of hard-and-fast separation can lead to missed opportunities, however. The latest efficiency-building technologies and techniques changing supply chains in general will make welcome additions to the health care toolkit.

The fact that changes to health care procurement efforts can have a direct effect on patients' care and health outcomes shouldn't make leaders timid about updating their processes. Instead, they should be actively pursuing new methodologies, looking for ways to make their whole organizations better.

Entering the consumer-goods chain
As Spend Matters recently pointed out, there is a major opportunity for hospitals and other care facilities to create more comfortable and safe environments for patients. While the site described the relationship between health care systems and e-commerce goods providers as "conspicuously absent," there is a great opportunity for hospitals to buy from online sellers.

Hospitals that focus their procurements entirely on health care-specific purchasing may not be providing comforting basics for their patients. The experience of receiving care has gained focus in recent years, and this involves providing what Spend Matters described as "a healthy meal, comfortable bedding and a good internet connection."

Recent years have seen the rise of products that blur the line between consumer goods and professional health care investments. Spend Matters pointed to a line of anti-microbial sheets that will be sold to home shoppers via QVC. The products are also available to hospitals, and the manufacturer behind them made sure to establish a contract with a care system during the launch period.

A hospital emergency entrance.Where can hospitals improve their supply chains?
General adjustments needed
Seizing new opportunities to change and improve patient experiences is a concept hospital leaders should seriously consider over the years ahead. Changing sourcing practices to create savings and efficiencies is another such priority, related but distinct. As Healthcare Finance News reported in late 2017, general supply chain spending takes up 30 percent of hospital budgets, making it the second-most expensive line item after paying staff. Using better practices to cut those expenditures is a valuable priority.

The source pointed out that recent research has discovered that some areas of the supply chain are far better at delivering monetary savings than others. Medical-only commodities are fairly set in their prices, with large organizations controlling distribution. Furthermore, pharmaceutical prices are also out of administrators' hands.

The actual products that have highly variable prices, and that can therefore provide bargains, are medical appliances and supplies dictated by physician preference. Supplier representatives may drive costs up by creating direct links with physicians, a practice that has been mostly eliminated when it comes to pharmaceuticals.

However they accomplish care improvements and cost savings, leaders in the medical world should be unafraid to explore possible supply chain changes in the near future. The world of hospitals is becoming more like other consumer-focused inventories, and that means competing and improving over time are core values.

2017 was a huge year for Amazon, and 2018 is already off to an auspicious start for the e-Commerce giant.  Jeff Bezos is now the richest person in human history, the company has surpassed its neighbor Microsoft in total value, and the hunt is on for a second corporate headquarters.  The latter development is particularly interesting and informative for Procurement professionals.

Amazon commenced their search for HQ2 by publicly releasing a Request for Proposal.  Opening the project to every city in the United States and Canada, the document is a remarkably-slight 8 pages long.  Source One's Procurement and Strategic Sourcing consultants have seen significantly lengthier RFPs aimed at office supply purchasing.

Amazon's brevity in proposing this massive project can teach Procurement professionals a great deal about effective RFP construction.  In the first installment of our ISM2018 Session Insights series, Senior Project Analyst Jennifer Engel discusses some key takeaways.  She examines the document and offers suggestions for companies looking to follow Amazon's lead.

Visitors to ISM2018 can count on many conversations regarding Amazon and its continued success. Get a head start by checking out this episode today.
Supply chains that don't self-examine may be weakening over time

Keeping the supply chain efficient and effective is a top priority across industries - and neither as easy nor as straightforward as it may seem. With market variables and best practices changing around companies, it's not uncommon for long-held strategies to fall behind the times.
One of the main problems that can afflict a supply chain operation at a company of any scale and description is a lack of self-reflection. Organizations that lose track of their own operations may end up surprised as competitors take the lead in their industries.

The importance of this kind of active supply chain is only increasing as businesses turn more to their logistics operations as sources of value. Organizations getting strategic and monetary advantages from processes spanning sourcing to delivery will have a natural advantage over others that cannot optimize their operations.

Degrading over Time
As Supply Chain Digest editor Cliff Holste opined in a recent column, a company's order-fulfillment efforts can break down slowly over time, when leaders aren't paying attention. Inefficiency creeps into the fabric of day-to-day practices and damages the organization's ability to generate value, but it accumulates so slowly that the issues are imperceptible until they've caused significant damage. He referred to this symptom with the old idiom "death by 1,000 cuts."

Holste recommended implementing continuous improvement initiatives for every operation from receiving and picking to shipping. If employees are collecting streams of data about all of these processes and working on strategies to make them better, there's less chance of them falling into neglect. Adopting modern tech tools may also help prevent distribution center operations from backsliding into inefficiency. Warehouse management systems and automation have undergone increases in functionality in recent years, and the latest models could be hugely helpful.

As for single variables order-fulfillment teams can use to determine whether they've let their practices slip, Holste pointed to processing time. When a company gets an order, it should turn that around and ship the goods within a day. If the business can't perform quick turnarounds, it's likely time to ask which of its processes is holding the supply chain back, and what step of the process is bogging down.

A labeled shipping package.The last mile is where logistics reputations may be made or undermined.
Expectations in the Amazon era
Supply chain operations that fail to improve are effectively moving backwards, as the logistics expectations of consumers steadily rise. A Lane Report interview with Verst Logistics CEO Paul Verst touched on the demands being placed on companies in light of Amazon's one-day delivery promises. Organizations making, selling and delivering products of all kinds are now in active competition with some of the world's biggest brands, and their ability to tune up their order-fulfillment operations may determine their fortune.
Millennial buyers have spent a significant percentage of their consumer lives with quick and effective shipment options. These young people are becoming primary earners in households and taking purchasing positions at companies making B2B orders. This means organizations whose logistics operations can't keep up with the velocity and accuracy millennials have come to expect may find they've lost their appeal. With transformation everywhere, becoming antiquated is a real risk.

Era notwithstanding, George Washington and Abraham Lincoln may very well have succeeded as Procurement professionals. The Father of our Country excelled at motivating those around him, and his propensity for out-of-the-box solutions certainly provided a competitive edge. Abe proved similarly savvy in high-pressure situations. No schism between departments could ever compare to the conflicts of his presidency. What's more, his legal background would have served the contracting and negotiations process well.

Their strongest asset, however, (at least where Procurement is concerned) was probably their fabled honesty. Our 16th President was upright enough to earn the nickname Honest Abe, and every schoolchild in American remembers the story of George Washington and his father's cherry tree.

Washington probably never said, "I cannot tell a lie." It's equally unlikely that Lincoln, then a general store clerk, followed a customer for miles to provide him the correct change. They're not here to clear the air, so, for the sake of this hypothetical exercise, let's assume both legends are true.

Honesty, transparency, and integrity should define both Procurement's domestic (internal) and foreign (external) policies.

Domestic Policy:

Procurement professionals at every level should feel comfortable engaging in transparent dialogue with their peers.  For managers, this means clearly communicating expectations and providing consistent, honest feedback. Doing so is the only way to ensure that each member of the team understands their role and performs to their full potential.

More junior resources should show the same level of honesty. It's important they feel empowered to respectfully express their true feelings regarding workload, performance, and their perception of the Procurement team as a whole.

Senior leadership, too, needs to pride honesty in their interactions with employees. No member of the team should feel shut off from the company's operations. Professionals at the highest level should ensure that everyone is up-to-speed on new developments, fully aware of the company's mission and goals, and ready to provide their honest feedback if necessary/

Foreign Policy:

External stakeholder relationships depend on honest communication.  With so many services providers out there, an upfront and transparent communication style could be what sets your team apart.

In some companies, Procurement can look like an intrusion. Few organizations like being told to cut ties with their preferred suppliers or make changes to long-standing policies.  Even harsh truths, however, are better than lies. By presenting themselves as honest and trustworthy allies, Procurement can help smooth these transitions and mitigate any push-back.

The same rules of any relationship apply to relationships with suppliers and other external stakeholders. They can't hope to thrive if either party fails to establish trust. Whether you're advising a stakeholder to set more attainable savings goals, offering tips for reorganization, or making suggestions for supply base consolidation, honesty is essential to the relationship's continued success.

Looking for help in your next campaign? Cast a vote for the Strategic Sourcing experts at Source One.  Together we'll help improve Procurement's approval rating within your organization and build a cabinet of best-in-class suppliers.

ICYMIM: February 19, 2018

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check in with us every Monday to stay up to date with the latest supply management news.

Michael Lamoureux, Sourcing Innovation, 2/12/2018
Even if your outsourced Procurement Services Provider doesn't tack on hidden costs, that doesn't mean they're delivering the full value they promised.  So-called 'full-service' technologies and  consulting firms often fall short of expectations. No firm or solution can truly offer expertise in every area, but it's important to audit your choice to ensure they come as close as possible. Ensure, for example, that your firm is truly providing expert in-house resources rather than a team of freelancers. Some firms promise expert resources, but will only arm their clients with a few hours of these experts' time. Delegating most tasks to interns and junior resources, they'll leave your team disappointed.

Megan Ray Nichols, Spend Matters, 2/16/2018
As global supply chains continue to grow and overlap, it becomes more and more challenging to develop plans for avoiding risk and responding to threats. In food supply chains, increased globalization presents particular cause for concern. In fact, 77% of manufacturers surveyed cited global expansion itself as a decided risk factor. Spoilage, contamination, and packaging errors all contribute to an unpredictable series of supply chains. Product recalls can have consequences well beyond financial losses, so companies need to perform more consistent quality checks than ever as they continue to expand. A little extra effort could save businesses and even save lives. 
Michael Lamoureux, Sourcing Innovation, 2/14/2018
The Doctor advises companies to remember that sometimes they've already got what they need. Inventory and asset management are essential components of sourcing and value generation. Next time you're looking to upgrade your e-Procurement or S2P suite, make sure it includes an integrated inventory management component. Unused or unaccounted-for assets cost your company money. You're not only missing out on the value they were meant to bring, but in many cases, some of this inventory could be licensed or rented to generate further value.  
Unilever Threatens to Pull Advertising Funds from Tech Giants

It was the threat heard ‘round the world as Unilever, a global consumer goods company with a colossal   digital advertising budget (the second largest in the entire world), used its buying power to demand a safer, more positive digital ad platform from Google and Facebook for its more than 2 billion daily consumers.  If their demands aren’t met, the company promises to invest its digital ad budget elsewhere.  Unilever’s Chief Marketing Officer, Keith Weed, is weeding out the Tech Giants, maintaining his stance that these platforms are no longer safe for big-brand advertising.  The threat has created a palpable sense of fear as Twitter, Facebook, and YouTube have already released statements aligning themselves with this commitment towards ad improvements. 

Although, on the surface, this may seem like a power struggle between big-brand advertisers and the duopoly of the digital ad space, the undertone speaks to the importance of brand integrity.  Today, people average as many as five personal social media accounts, and, according to Adweek, spend an average of 50 minutes every day perusing these sites. That means Unilever’s consumers are inundated with ads every day, and Unilever refuses to continue to debase and dilute their brand with divisive, hateful or false news.  As the demographic becomes increasingly socially conscious, ad agencies expect to continue seeing the proliferation of ethical and socially responsible marketing.  Unilever and several other household names operate with full transparency, leveraging data to build an engaging brand that transcends look and feel and taps into this socially conscious zeitgeist.  CNN released excerpts from Weed’s speech earlier this week. Weed states, "2018 is either the year of techlash, where the world turns on the tech giants - and we have seen some of this already - or the year of trust.  The year where we collectively rebuild trust back in our systems and our society."  Weed recognizes that he and other advertisers need to call attention to the issues at hand since currently they have the leverage; the Tech Giants’ ad platforms are almost entirely funded by the billions of corporate ad dollars.  Facebook, for example, earns 85% of its revenue from corporate ads and videos. 

This lesson in brand integrity and creative vision is also important to the broader Supply Management function.  Ethical supply chains have been a hot topic for quite some time now, and as Procurement and Marketing continue to find their footing on how to best operate alongside one another, it is increasingly more important that Procurement understands the significance of maintaining brand integrity.  Branding shapes perceptions and influences purchasing decisions.  Procurement should continue to evaluate agencies to ensure they understand the core brand and messaging, and can promote products that leave a strong impression on both internal stakeholders and consumers.  This topic will certainly inspire a greater discussion.  To learn more about sustainable procurement, brand integrity and socially conscious marketing, or ethical supply chains, contact one of Source One’s Marketing Sourcing experts today.   

February 16, 2018

Here's a look at where Source One's cost reduction experts have been featured this week!

Recent Podcasts:

A relationship with a stakeholder, like any relationship, depends on trust, mutual investment, and effective communication. Source One Consultant Liz Skipor has learned this through years of successful client engagements and savings initiatives. She joins the Source One Podcast to discuss the importance of maintaining trust and learning to speak your stakeholders' language. Her insights should help any Procurement professional better encourage collaboration, achieve buy-in, and develop strategic partnerships.

Before establishing savings targets, companies need to fully understand the capabilities and capacity of their Procurement departments. Failure to do so could lead to depletion and disappointment as companies chase unrealistic targets. Source One Director Diego De la Garza has spent years helping Procurement team's assess their operations, optimize their processes, and achieve their savings goals.  He joins the Source One Podcast to discuss the importance of conducting a maturity assessment before setting out on a savings initiative.

In every category and industry, Procurement initiatives rely on apples-to-apples comparisons. Maintaining a level playing field for judging suppliers is the only way to accurately assess the strategic value of their goods and services. In Less-than-Truckload Logistics sourcing, such comparisons are particularly hard to come by.  Carriers in this space have developed their own personal pricing and discount structures. Source One Senior Consultant Ken Ballard has proven himself an expert in navigating this complicated category.  He joins the Source One Podcast to discuss his methods for optimizing your LTL purchases. 

Supply chain reorganization battles the 'retail apocalypse'

What happens to a company when a huge portion of its audience decides, en masse, to conduct business in a new and different way? The retail world is suffering through a real-world example of this hypothetical puzzler as online shopping makes entire parts of organizations' established infrastructure obsolete. Emerging strong from the changing focus affecting retail means reacting quickly to not only the changes that have already occurred, but those that are about to.

The supply chain will naturally become the locus of a lot of new practices, with goods traveling along different pathways than they have in the past, and at greater speed. When the dust settles, it seems clear that even the buildings used to house retailers' supply chain operations will likely have changed.

Supplier networks are shifting
Retail companies' supply lines are changing shape, and in many cases, that means shortening. Supply Chain Dive noted that procurement's decades of offshored production have stretched manufacturing overseas, but need for speed and bottom-line benefits have moved production back into companies' home countries and increased the number of regional distribution centers.
While some government policymakers would probably like to claim reshoring suppliers as a victory for tax incentives or political pressure, the news provider explained that simple changes in underlying market forces are actually behind a bulk of the reshaped supply chain map. After all, tax structures and political power can shift in a matter of a few years, while macro-economic trends follow longer arcs.

Companies are thinking about their customer bases, and trying to find fast and affordable ways to get items into their hands. This is especially important in industries that involve custom production. Since there's no way to prepare a customized product ahead of time, any seller dealing in such goods has a great incentive to keep production facilities close to their customers' locations.
The general move toward more supply chain real estate within companies' home markets is ongoing, though Supply Chain Dive noted it's not a workable model for every company. Businesses that examine their current value chains may discover they are already operating at peak value for their expenditure. On the other hand, the time could be right for change.

A forklift in a warehouse.The consensus best location for warehouses and factories is changing.
Real estate patterns emerge
Sellers that haven't yet changed their approach to warehousing and distribution may find they've fallen behind the curve, with increased real estate prices being one potential consequence. Transport Topics reported that demand is high for large plots of land near transportation hubs, with the central New Jersey area proving especially expensive. Organizations are having to make more shipments in the e-commerce era than they did when dealing primarily with brick-and-mortar stores, driving the demand for central shipping centers.

Shifting the shape and focus of the retail supply chain is a complex operation in many parts, and the changing real estate market for warehouses and distribution centers will be accompanied by new digital infrastructure and communication methods. As long as customers are interested in buying physical goods, however, the cost-effective manufacturing and distribution of those products will be a high-level priority for all companies involved in the retail supply chain.

In Procurement, trust is as valuable a commodity as any other. It's both the glue that keeps stakeholder relationships together and the fuel that drives savings initiatives.  Without trust, Procurement consultants and their clients cannot hope to work together toward common goals.

Consultant Liz Skipor joins the Source One Podcast to discuss the importance of gaining and maintaining trust in stakeholder engagements. "Trust," she suggests, "is the keystone to a successful engagement."

Leveraging her years of experience engaging stakeholders and producing savings, Skipor offers her tips for building strategic partnerships and encouraging collaboration.  Speaking the stakeholder's language, maintaining consistent communication, and always coming prepared are all essential components of her method.  She's an expert at the art of supplier relationship management, and these practices have helped her achieve this status. 

Listen to the episode today.  You'll gain new insights into the factors that drive long-lasting, mutually beneficial vendor relationships.
I’ve had quite a few conversations about data granularity with organizations seeking to conduct a spend analysis. One of the common questions I am asked is, “how do we know if we have enough detail?

I understand exactly where this question comes from – we live in a world where collecting and storing large swathes of data is commonplace. In the context of a spend analysis, however, I reject it. I think a much healthier question to ask at these early stages is “how do I know if I have too much?

Less Really IS More

Many people used to live by the words ‘less is more,’ opting to simplify in order to underscore and emphasize a main point or priority. It was a simple, efficient philosophy that often yielded results when applied correctly. Yet we now live in a world where having more is cheaper and easier than ever before. Surely the ‘less is more’ crowd only felt that way because it didn’t have the tools and big data capabilities that we have today… right?

Again, I reject this notion. I certainly agree that technological strides have in fact made collecting massive amounts of data much easier, but none of us are here right now with the stated mission of collecting data simply for the sake of filling up a data warehouse. We’re here to accomplish a mission – develop a clear, concise picture of where money is spent, with who, and how often. Then, we’re going to take that clear, concise picture and use it to identify key strategic sourcing initiatives.

I’m getting conceptual, so let me provide an example. Consider your latest Staples purchase. We have pens, pencils, paper clips, notebooks, and dozens of other individual line items. Digging into just a single one of these items, I have black vs. blue pens, felt tip vs. ball point, name brand vs. store generic, on-contract vs. off-contract buys, and the list goes on – just for the pens! For a simple office supplies order, there are a lot of data points to consider.

... Or are there?

Think about all of those data points in relation to our goal: Is our office supply spend a viable candidate for a strategic sourcing project? Maybe it is, maybe it isn’t… but I can tell you with absolute certainty that the answer isn’t hidden in the color of my pen’s ink, how thick a line it makes, or any of the other countless data points we could collect.

Choosing the Right Map

If we thought of a spend analysis as a map, then we have a few options for the type of map we want to create.

First, consider the topographical map – for those not in the Boy Scouts or Girl Scouts, topo maps are full of details, including elevation lines, man-made and/or natural structures, forested areas, and more. This is great detail, but I can’t necessarily use it to get from here to St. Louis. Now consider the lowly gas station road map. This thing has three colors – blue for water, yellow for land, and red line roads. Can’t get simpler than that. But, you know what? I can use it to get from here to St. Louis… and avoid driving into any lakes or rivers to boot.

So, the next question is, what are those few, basic details in a spend analysis? I would start by considering these high-level qualities:

  • Product Similarity: How similar are the goods and services being procured? More appropriately, can I group them by the types of suppliers that offer them?
  • Like-Suppliers: What differentiates my suppliers in the context of these products? Are their cost structures, SLAs, or contract terms similar? Do they offer similar value-adds?
  • Sourcing Strategies: Are there similarities in how I would go to market for these products? Can I group together products that would do well in a market basket for an RFQ? Is there a group that could be considered for a GPO agreement opportunity?
  • Projected Savings: Can I group products into savings range buckets? Are my savings ranges relatively high or low? Are they wide or tight?
Continuing on with our office supplies example, I would consider all of the products from Staples to be pretty similar insofar as office supplies go. I’d also consider suppliers like Office Depot or W.B. Mason to be similar based on how they conduct their business and structure their agreements. I know that a combination of product substitution, supplier consolidation, and a market event like an RFQ will drive cost savings, while internal pushes to drive adherence to an on-contract list will ensure those savings are realized. I also know that, off-hand, I can expect savings of somewhere between 10% to 20% of annual spend.

For all these reasons, we’re going to group these suppliers and products simply – We’ll call them all “Administrative Expense: Office Supplies” suppliers, and we will consider if 10% to 20% of that consolidated total is worth a strategic sourcing initiative.

The Right Time and Place for ‘More’

Everything above notwithstanding, I truly do believe there’s a time and place for looking at more granular details – during our sourcing event. Once we’ve identified a path forward towards savings, we can go nuts identifying all the best pens to include in our on-contract pricing agreement. But to put the cart before the horse and do this deep, granular analysis before we even know where we want our strategy to go puts us at risk of paralysis by analysis, and will lead to lost opportunity costs.

So, as we begin our spend analysis journey, let’s all keep the ‘less is more’ mantra in mind.

Finding the right Procurement hire isn't so different from finding love.  Sure, there aren't' many songs about screening or on-boarding a new hire, but the same basic principles apply.  Hiring Managers suffer through awkward first dates and the other thrills and disappointments of relationships on a daily basis.  Essentially, they've got to try and find 'the one' for their company again and again.  To avoid the heartache of underwhelming candidates, many organizations are outsourcing these efforts to a Procurement recruiter.

A good Procurement recruiter functions like a matchmaker. They build dating profiles of sorts for their clients and preferred candidates. Tailoring resumes, developing pitches, and generally singing the praises of both parties, they experience online dating's highs and lows for a living.  With time, they learn to spot some of the same red flags that veterans of dating apps will recognize.

1. Misleading Profiles
You don't need to frequent dating apps to know that users often stretch the truth.  Login for five minutes and you'll come across more exaggerations and half-truths than you can count.  Procurement recruiters, tasked with analyzing resume after resume, have to spot these before pairing candidates with clients.  The unscrupulous applicant might claim experiences or skills they can't actually support with facts. Trust a good Procurement recruiter to wade through the falsehoods and identify candidates who can truly bring the skills you need to the table.

2. Checkered Pasts
Dating apps and websites can tell you a lot about a potential partner. Even a misleading profile can offer enough about interests and opinions to paint a useful picture of the user's personality.  What they almost never offer is information regarding the individual's romantic past. In a sense, recruiters can go a step farther than dating apps and dig into an applicant's history.  Leveraging references, they can take a deep dive into an applicant's employment history.  Have they alienated people in the past? Are they missing something essential? Are they lying on their resume? A recruiter can answer these questions and more as they perform their investigations.

3. A Lack of Commitment
Nobody likes getting ghosted.  Whether it's a match on a dating app, or an applicant scheduled for an interview, getting blown off is always a bummer.  Recruiters take the burden of dealing with flakes off your company's back.  Part of their job is determining which Procurement professionals are dependable and which will never show up.  If a candidate continually blows off their interviews, reschedules with suspect excuses, or shows a lack of preparation, they can cut ties before your hiring manager has to.

Finding the perfect match on dating site is rarely easy.  With the right recruiter, however, finding the perfect match for your Procurement team can be. Leave the hard work of courtship to a Procurement matchmaker and find the supply management professionals of your dreams.  Call Source One's contingent staffing experts today.

In recent years, the procurement departments of companies around the world have revealed their true power and influence. When freed up to operate independently and strategically, these teams can set the tone for their whole organizations' efficiency and effectiveness. Sourcing is a function that touches every era of a business - every item and material used by the the company has to get there through procurement, which creates the potential to generate meaningful change.

Upgrading the software used by procurement professionals is one way to have positive ripple effects on the whole organization. Sourcing professionals equipped with the latest and most efficient digital tools may spot valuable opportunities invisible to less-advanced teams. When such a deployment has its full impact, executives will see a quick return on investment.

What's next for procurement software?
As Supply Chain Digest recently explained, some of the spend analytics systems in use today are dragging sourcing departments down. The news outlet quoted Gartner analyst Patrick Connaughton, who indicated legacy software in this category has fallen behind the latest wave of potential replacement options, and the next four years will see 50 percent of old-fashioned spend management tools decommissioned and replaced.

The problem with older spend-management systems, according to Gartner's analysis, is that they are designed to answer users' questions, rather than going beyond those parameters and delivering unique or novel insights. Artificial intelligence technology is constantly becoming more effective, and the latest generation of solutions, based in the cloud and able to work from larger and more varied data sets, may deliver more helpful information and make a material impact on decision-making.

Connaughton sees an opportunity for new entrants to the spend analytics field to quickly surpass the legacy providers currently operating in the space. The innovation introduced by these aspirants may be a simple combination of business intelligence and AI. Equipped with these new and more insightful kinds of spend analysis tools, procurement managers could make novel and exciting discoveries that set up their whole organizations for success.

A graph and coins on a tablet screen.Spend analysis is taking its next step.
Less hype, more progress

The useful applications of AI are coming into focus, and that makes the current moment an exciting time for software developers. That said, it may seem to supply chain professionals that they have heard about AI's promise for years, but not gotten the results that would back up the expectations. According to Forbes contributor Bernard Marr, however, 2018 will represent a turning point. While in the past, the amount of promotion and anticipation directed toward AI outstripped the tangible business effects, the ratio is set to change.

Marr specified that in 2017, there will be a concerted movement toward making practical use of AI in everyday business functions. Compared to previous years' efforts, which largely focused on proof-of-concept demonstrations rather than actual software development, the AI field in 2018 will be a must-watch sector for employees who want to keep their companies ahead of the computing curve. While some major efforts to tap into AI's power will fail, the realization of potential benefits and climate of focused investment mean the chances of success have never been greater.