Buyers – Robot, Augmented Buyer, what will be the future of the buyer?
Patrick Chabannes: Welcome to this last conference in prefiguration of the Solutions Solution, the IS Procurement Exhibition which takes place on 5 and 6 October in Paris Porte de Versailles. We wanted to explore the theme of Buyers – Robot, Augmented Buyer, what will be the future of the buyer?
Why this topic of Robot – Buyer, Augmented Buyer? On the one hand our software vendor friends are using concepts such as autonomous procurement, cognitive sourcing, RPA, chatbot, artificial intelligence and recommendation engines. On the other hand, there is also the human world, the world of buyers who must use or can use these tools. In 1946, Georges Bernanos shared a forward-looking vision of optimising the use of human material in the modern world: “Progress is no longer in man, it is in technique, in the perfection of methods capable of allowing a more efficient use of human material every day”. (La France contre les robots, 1946)
To discuss this robotisation, this automation, this increase, we brought together Florence Baiget, Director of Group and French Procurement at Transdev, Laeticia Catrice, Director of Procurement at Sephora Collection, and a well-known figure in procurement information systems, Alain Alleaume, the creator of the firm Altaris, which has been providing advice for over 20 years.
Part 1: Is a robot-buyer, a buyer?
Patrick: Is this robotisation, this robot buyer, a necessity for procurement?
Laetitia Catrice: Hello everyone, thank you for this question. Is it a constraint or a necessity? I see it more as an opportunity. Today, all digital tools must be there to assist our procurement teams. This is really how I see the digitalisation of our departments. The important thing is to define what added value these digital tools will bring to the buyer.
What added value will the buyer be able to find in these tools at a given moment? First of all, to think better, to spend time where it is expected, i.e. to better understand the context of his company and his suppliers and to really use these digital tools as a source of efficiency and added value.
“What is important, the challenge is to define what added value these digital tools will bring to the buyer.
And I would just add one point. It’s important to understand how digital will develop intelligently to support the transformations, and particularly the procurement strategies, that buyers are facing.
Patrick: Alain, how would you define or explain this robotisation?
Alain Alleaume: What I’ve noticed is that the procurement function is still effectively cluttered with a lot of activities that interfere with the buyer’s work. We are on an infinite playing field for finite resources. We can indeed imagine that automation and its tools can bring this value that you have just defined to refocus the work of the buyer. There, it brings value. I’m pushing open doors, but you have to see that the computerisation of the function has existed for 30 or 40 years, from the first cobol machines to information technology. So we are indeed advancing in waves on technologies which are today more disruptive technologies. But how are we going to master these technologies to get to the heart of the matter?
“What I see is that the procurement function is still effectively cluttered by many activities that interfere with the buyer’s work. We are an infinite playground for finite resources.”
However, I have noticed that there is a fashion effect in companies. General management has set up a digitalization department with CIOs/CDOs pushing all the business lines to carry out experiments, the famous POCs (Proof of Concept), which have become POVs (Proof of Value), in order to determine the value through testing. I think we’re going about this the wrong way round. It would be better to first identify the irritants on which we actually want to gain in efficiency.
I also see that the occupancy rate of buyers is a question, as they are caught up in emails, meetings… activities that could be revisited with tools that provide much more automated processing to enable work on procurement strategies, for example. “Because I think we are very poor in terms of helping the buyer to develop good procurement strategies.”
Patrick: Florence, for you, is this automation, this buyer-robot, a competitor or an aid to carry out, as Alain says, the infinite number of tasks in the buyer’s day?
Florence Baiget: I’m not very comfortable with bringing robots and buyers together because I think it’s quite antinomic. On the other hand, we need to find a relevant and complementary way of working to focus our buyers on value-added tasks. That’s a fairly classic line of argument, but in concrete terms it involves automating parts of the process. We have to be precise and surgical about what will enable us to save time: deploying information, providing access to information, facilitating knowledge of our procurement policies.
“All this work that can be automated will free up the buyer to focus on everything related to relationships, analysis, building action plans, managing change and market knowledge.”
All of this automatable work will free up the buyer to focus on everything from relationship building, to analysis, to building action plans, to driving change and knowing the market. So I think that if Robot-Buyer means relieving the professional of a certain number of processes, then yes, it is a partner in the function.
Alain: The surgical approach, I like the term. I think that there are a lot of holes in the way processes are integrated into information systems today. There are a lot of use cases that require this very surgical approach to the ends of processes that are poorly addressed by the digital solutions on the market.
Patrick: Laetitia, we are guided by figures, by dashboards, human material immersed in a world of figures. What does this inspire you?
Laetitia Catrice: I do like this numerical environment that you highlight, Patrick. Today, I think it’s important when you’re managing a procurement strategy, you’re looking for performance. These tools allow us to put analytics into our procurement strategy to explain where we’re going. One of the skills of today’s buyers is to have this affinity for interpreting the data provided by digital tools. But these tools will never take away his skills: interacting with my internal and external environment with strong relational skills. This is something that will never be replaced tomorrow by a robot!
“I often tell my buyers to go and see their suppliers, to look at how the industrial process is carried out. Because that’s where the performance is, more than in an office, by doing data crushing.”
I really like your thought, Florence: “It is difficult to compare a robot with a buyer”. I often tell my buyers to go and see their suppliers, to look at how the industrial process is carried out. Because the performance is there, rather than in an office, by doing data crushing. What is important is to take yourself by the hand and go to the supplier. The robot is not likely to go there tomorrow!
Alain: I’d like to come back to the analysis I made: What percentage of a buyer’s working time is spent visiting suppliers? Answer: 5%.
And here I completely agree. The subject is to go to the internal customer and to go to the supplier to look for ideas, productivity and knowledge of industrial resources, and this is the job of the buyer of tomorrow. We hope that digital tools will give him more time to do this. We hope so.
Laetitia: Yes, you have to remember that buying is about understanding. Understanding the industrial process we have in front of us, understanding our suppliers and understanding the ecosystem in which we interact. And that’s something that a robot won’t be able to do tomorrow.
“We have to remember that buying is first of all understand.”
Florence: Just a quick word on the analytical part. I think it’s really important for our ability to involve our internal customers in the proper implementation of our procurement policy. Finally, when we have clear KPIs that say: here it is applied, here it is not – we can initiate action plans. As long as we are in the dark without having objective and factual elements to share with the management committees, it will always be extremely difficult to take action. For me, this is another example of complementarity and added value: a procurement strategy that can only be thought out by a human being and the production of KPIs to be analysed… always with this human added value.
Second part: The augmented buyer, a necessity in a complex world?
Patrick: Alain, where does this idea of the augmented buyer come from? It seems to me that you were the first to raise it. Doesn’t this concept follow on from that of the buyer’s office that you were already talking about nearly 20 years ago?
Alain: At the time, we were talking about the Buyer Cockpit or the Buyer Dashboard. The idea, well for me, was very central: the buyer arrives at his office in the morning, he opens his PC and immediately he should have all these actions to carry out, his reporting pie chart, all the elements he needs. His Cockpit! He has his shopping list for the day. At the end of the day, there’s not even an email, but he receives notifications directly from the platform. We’re getting there now with the solutions on the market. On the notion of the augmented buyer, it’s in the same vein as augmented reality. It’s about opening up the big antennas to be able to capture information. For example, the famous weak signals. It’s the idea of becoming more intelligent and curious, a great quality of a buyer.
Patrick: You were talking about analytics earlier. How do you become an augmented buyer? What should you say to software vendors?
Laetitia: We often have the image of a buyer who would be faster and more efficient because he has a good knowledge of his KPIs and is equipped with efficient software developed by his company. Unfortunately, I think that today, the new challenges – agility, sustainable development, etc. – force the buyer to change his KPIs frequently and imposing a tool on him is counterproductive.
“I would prefer to reverse the proposal and ask my buyers: what digital tools do you need to meet the performance I’m asking for? And that’s really important.”
I’d rather reverse the proposition and ask my buyers: what digital tools do you need to meet the performance I’m asking for. And that’s really important. And then I would ask the software vendors who are listening to me and who have developed digital systems to accompany us and adapt them to you. The needs will be very different depending on whether the buyers work in a consumer goods company or an industrial processing company, whether they work on direct procurement or indirect procurement.
Patrick: Florence, like Laetitia, you represent the new generation of procurement directors. What message would you like to convey to IS procurement software vendors?
Florence: First of all, I think that we have to prioritise the resources at stake. We cannot put the same energy into all categories. We need to prioritise with limited resources.
So for me, digital solutions must allow easy access to a common data base. Because the real added value of a buyer is the ability to integrate extremely different visions and constraints and to propose the best possible compromise to his company, the best possible procurement strategy, taking into account the famous classic QCD but also all the criteria such as anti-corruption, CSR, etc. The criteria for proposing the best strategy are becoming more and more numerous and so, for me, the real added value of a digital solution is to offer this data so that the buyer can extract the essential information in order to propose the best procurement strategy for his company.
“For me, the real added value of a digital solution is to offer this data so that the buyer can extract the essential information in order to propose the best procurement strategy for his company.”
Then, we buy by understanding what we buy. We need to monitor the components of the cost structure which are obviously different depending on the procurement family. The digital solutions must allow us to work in depth from time to time and to secure the basics. It’s complicated but this dual expectation exists.
Patrick: Alain, as you have been a Procurement Director and have been supporting your peers in the digitalisation process for 20 years, do you have the impression that software vendors understand the complexity of the business to the extent that Laetitia and Florence have expressed their expectations?
Alain: To be very frank, I would say that the solutions actually respond to an average vision of customers’ needs. I agree with what you said earlier, Florence, when you talked about surgical applications. We’re going to go directly to a procurement area to go into the subject in greater depth. And that today, you have to work manually with the tool that you have available today or that you will have tomorrow. We must not forget, without wanting to be negative, that eSourcing tools, consultation management tools, are empty boxes at the start. When you buy an eSourcing solution, it does everything but source. It’s your buyer’s intelligence that will do the job afterwards. So is it good or bad? I think that in indirect procurement categories, where there are fairly classic standards between companies without much differentiation, eSourcing software could already have content, cost breakdown models, ready-to-use questionnaires. This is a real subject for reflection.
“I think that in the indirect procurement categories, where we find fairly classic standards between companies without much differentiation, eSourcing software could already have content, models, ready to use. This is a real subject for reflection.”
I also wanted to go back to the business need in the face of digital that you expressed, Laetitia. The question is: What is the need? What are the pain points? The famous pain points that are assessed in depth according to the type of population. This is the purpose of scoping studies.
My last point concerns information. Today we also need to have information in real time. The buyer has a dynamic vision. Technology allows us to have access to subscriptions with service providers to obtain updated data that gives meaning to the action.
“Today we also need to have information in real time. The buyer has a dynamic vision. Technology allows us to have access to subscriptions with service providers to obtain refreshed data that gives meaning to the action.”
Laetitia: That’s right, Alain. I see this available data as a decision-making tool. Today I may have a problem with transport or raw materials. So what new data do I need and how will it help the buyer to analyse and make decisions? Tomorrow we may have a less inflationary market or one that is even more focused on sustainable development, so what other information will I need?
“Access to data must be flexible, simple and contextualised to help us analyse and decide.”
Alain: Moreover, this need is getting stronger with the regulations (Sapin II… ) that are falling on us and coming into the buyer’s basket!
Florence: It comes down on us and it generates an administrative burden which, if it is not equipped to a minimum, can make us miss our challenges and our added value. For me, it is crucial to be able to support the implementation of regulations with solutions that simplify everyone’s life, otherwise we could get drowned in them.
“It is crucial to be able to accompany the implementation of regulations with solutions that simplify everyone’s life, otherwise we can drown in them.”
Laetitia: We were talking about process. I really don’t like the term procurement process because I think it confuses what we do on a day-to-day basis with following a process. The procurement process, and this is my belief, can and should be much lighter. Our procurement processes and even our business processes in general need to become leaner to allow for the reduction of administrative and bureaucratic tasks that have weighed heavily on procurement departments in recent years. We hope that with digital and new challenges we can spend less time on the process and its writing.
“I really don’t like the term procurement process because I think it confuses what you do on a daily basis with following a process. The procurement process, and this is my belief, can and should be much lighter.”
Alain: I love what you say about the procurement process. You’re preaching to the choir. When I was talking about a buyer’s digital desktop, for me there is no process in the desktop!
The buyer goes and gets the necessary information, his actions to do. It is the buyer who decides on his priorities. In eProcurement, the commitment of expenses, there is a business process and its management rules. But in procurement, for me, the process must be underlying and completely transparent. For example, in a tender file, the buyer must be able to intervene at any stage of the process because you are not in a process logic. The logic of the action is such that you put it in your work priorities.
“For example, in a tender dossier, the buyer must be able to intervene at any stage of the process because you are not in a process logic. The logic of the action is such that you put it in your work priorities.”
Laetitia: And then the process kills initiative and curiosity. How can we create a team dynamic and mobilise intelligence and curiosity if our job is to follow the 26 pages of the procurement process!
Patrick: The function has come of age on these fundamentals. Are we taking the time to collectively indicate our needs to the software vendor community? What do you think, Florence?
Florence: What comes to mind, echoing your question, is an experience I had with a very specific business need. I wanted to be able to monitor our so-called inclusive procurement expenses. There was no real definition in the procurement community. I said to myself at one point, if we want to make progress, we have to measure. And so I worked with an external partner on the response to this functional need, which was not met by a standardised tool. This is an example, the software vendor has made a solution of it which it is now proposing more widely. I find this interesting. Now the answer to your question is rather negative. I think that we don’t take enough time to step back. Are the software vendors ready for this? I question this.
Patrick: We have indeed seen this direct relationship between a company and the software vendor for over 20 years. Laetitia, have you seen the same thing?
Laetitia: We don’t spend enough time on the issue but it’s also linked to the maturity of the function in terms of the digitalisation of procurement and the digitalisation of the brand, of the company. Procurement is not separated from the omni-channel strategy of their company either, and I’m talking about Sephora here.
“We’re about people first, but digitalisation serves the efficiency of a team and that’s really important.”
So it’s a question of having a plan to integrate needs and technologies. What I am sure of is that, naturally, once we have identified how the project is a source of efficiency and brings added value, then we will usefully spend time with the software vendors. We are dealing with people first, but digitalisation is at the service of a team’s efficiency and that is really important.
Third part: Automation or augmentation, a technologist’s vision? What does this mean for the procurement function?
Patrick: Are we robots in the company, juggling information systems and chaining tasks together? What do these new technologies bring us?
Laetitia: This is a sensitive subject. We need to break down this image of the buyer today in his daily life with his tasks, his repetitive tasks and his process. Yes, whether you’re in a small SME or a large multinational, you have things to respect. But what is important is: what do we need to be effective in our organisations? For me, it is the mobilisation of collective intelligence.
“A good buyer today comes from a variety of backgrounds, is open to others, has curiosity and must easily integrate the possibilities offered by information systems.”
It is important in a procurement organisation to have buyers who are capable of revealing a personality. A good buyer today comes from a variety of backgrounds, is open to others, has curiosity and must easily integrate the possibilities offered by information systems. And if he lacks the skills, he can find them in his team, with younger or more experienced colleagues to create this situational intelligence, a real source of efficiency.
Patrick: Florence, earlier you told us that you expect your buyers to express their needs in order to be more efficient. How are we going to measure reality? This gain in available brain time?
Florence: One of the main biases is not to be critical of the information produced by a system because the quality of the data may not be good and the process only partly describes reality. It is important to have confidence in the technology but, at the same time, to always be aware of the limits linked in particular to the quality of the data; therefore, it is important to always keep a critical mind with regard to the fruits of digitalisation, and to be concrete and common sense.
“It is important to have confidence in the technology, but at the same time to always be aware of the limits linked in particular to the quality of the data.”
The digitalisation of our processes, RPA and digital solutions in general must allow us to save time to have the ability to be ahead of a lot of subjects in constrained or declining resources to be a recognised function: expertise in our categories, an understanding of needs, an ability to put our specifiers in touch with the suppliers of today and tomorrow, an insight into the risks linked to the numerous regulatory constraints, work on innovation and the development of real procurement strategies that involve the whole company and win the support of general management.
I try to strike a balance between anticipating the next move and dealing with emergencies and day-to-day issues, because I always have to keep working on it.
Patrick: Alain, Florence talks about the importance of establishing procurement strategies to win over the company and the CEO. Apart from a few recent startups, the various solutions on the market do not seem to address the issue. What is your reading?
Alain: I think we are still quite far from the goal even if the latest solutions have come a long way. Strategy has two subjects in my opinion: Strategy with a capital S requiring having the right information at the right time to adapt to external events and onboarding third parties and strategy which is actually tactical, tactical procurement, very operational, onboarding strategy as an entry point.
“Maybe I’m being a bit forward looking but I think for some commodities we will be able to have an ability to automate the process of price request, supplier responses, and analysis and decision making as we see in Trading.”
In the latter case, there are advanced eSourcing solutions, or Sourcing Optimisation, that offer great possibilities for buyers: reverse auctions with multiple strategies, sealed bidding, multi-round, multi-award, multi-criteria with what if scenarios. And here we reach the limits of Excel because it is not Excel that will help the buyer to make scenarios!
Maybe I’m being a bit forward-looking, but I think that for some commodities, we will be able to automate the price request, supplier response, analysis and decision process as we see in trading. Of course the buyer will have the final say but I am sure that in some procurement families there will be no more tendering as we know it today. On the one hand, there is the complexity of large tenders and on the other hand access to markets in real time…
Patrick: Laetitia, Alain tells us that he sees automation coming in certain categories. Recommendation engines, predictive analytics are already here. Won’t the machine be more powerful than the buyer?
Laetitia: You raise an important point. Basically, what are we looking for? We are looking for results. Yes, we need to be critical of the tools, the automation, but yes, the buyer will always have the final say. Why is that? Because it is the buyer, with his tools, with the scenarios and the what ifs, who will decide on his interpretation and how to use them to achieve the result. Once again, I come back to the skills of buyers. I often say that a buyer is someone who is result-oriented. He has an obligation of result and not of means. The buyer will pragmatically use a large dose of digitalisation on commodity procurements, and so much the better. And perhaps on another issue, the human element without automation will be the best way to deliver a result. We are in a pragmatic situation that will be pushed to excess. Digital or methodological tools are at the service of our buyers to produce the best result.
“We are in a pragmatic mode that will be pushed to excess. Digital or methodological tools are at the service of our buyers to produce the best result.”
Patrick: Florence, what is your opinion, your practice between human and machine?
Florence: Nobody works alone. In my team, I have data experts and category managers, portfolio managers. It’s really important that we work together. Because on the one hand, a buyer who knows his family has convictions linked to his history and can forget to go and check everything that the outside world can give him in terms of objectification. On the other hand, the data person will not be able to challenge the information produced. So it’s good that this pair works together. It’s not that simple because they often have different profiles.
“We need to develop the skills of each other so that each person integrates this analytical aspect which was not natural, while maintaining control and common sense.”
I agree with the idea that in the end what counts is what will give results. What will make it possible to involve the operational staff a little more in the application of our policies, in a very decentralised organisation where there is no magic button to bring the whole organisation into line. We need digitalisation and change management but in the end, it’s still people talking to each other and convincing each other.
Edited transcript of the Conference – Live of September 13, 2021 organised by the Salon Solutions with :
– Laetitia Catrice, Director of Procurement – SEPHORA COLLECTION
– Florence Baiget, Group and French Procurement Director – TRANSDEV
– Alain Alleaume, Associate Director – ALTARIS
Debate moderated by Patrick Chabannes, Cyrénac Conseil
Transcript validated by the speakers