In our last blog we talked of goods, now let’s look at services procurement. This is a different kettle of fish isn’t it? Not necessarily.
Procurement systems that talk to each other
In the next six months we will see the arrival of systems that enable procurement contracts to ‘converse’. They will use event-driven data to manage contract performance. For example, buyer and supplier systems will be linked to monitor performance against service levels (SLA) specified in the contract. If the supplier misses an SLA, the system will record it, process credits and amend the invoice accordingly. In real-time.
As a result there will be no need for that monthly meeting to review all deviations, agree compensation and process credits. The system will do all of that in real-time and will provide a report for review by technical teams. Consequently this will facilitate continuous process improvement.
Going forward, procurement staff will be redundant for IT services but what about decorating or other similar activities?
The facilities manager will use a mobile phone to video the area for decoration and specify what must be done. A phone app will measure the area and allow upload of plans and any specifications for e.g. specific infection control paint etc. Pre-qualified bidders will submit tenders and the system will award the contract. Furthermore, even suppliers will lose roles as systems take on much of the work done by sales or customer service staff.
Contractors arrive and record their work on a mobile phone or camera to show compliance with specification. The Facilities Manager will inspect the work and accept (or reject) it using a mobile phone app and the system will record completion and process payment to the contractors. The contractors will not need even to raise an invoice. This technology already exists, it is just a case of putting it into use.
What will Procurement do in this brave new world?
Honestly? Not a lot.
They will check compliance of goods at a national level for entry onto the platform. In addition they will approve entry of contractors who demonstrate compliance with quality requirements. But, much of this work can be automated leaving them to deal with unusual items and disputes that cannot be resolved by the systems. Given that eBay resolves over sixty million disputes a year using AI and OCR systems, it is unlikely that many staff will be needed for this work.
In the next article we will take a look at how the NHS will deal with exceptional items.