Insight

The IBM transformation story

Global procurement is a complicated process. It involves buying, selling and partnering with businesses; internal and external transactions; and even market forecasting. In addition, procurement influences speed-to-market, revenue and helps deliver innovation from the supply base.

As a business grows, procurement becomes essential to scaling its operations. This becomes possible by automating data collection and intelligence functions, as well as eliminating manual tasks which are prone to error. This effectively upskills the organization, enabling it to take on higher value work by augmenting the experience of domain experts with enterprise insights in the context of whatever variable presents itself at the moment.

With operations in over 170 countries and over 13,000 suppliers,  procurement has always been the life blood of IBM. However, long-entrenched processes and siloed data across this heavily matrixed organization were leading to frustrations with the procurement process. IBM needed an updated approach to their procurement capabilities. Questions were surfacing like:

“Do I have competitive pricing on this deal?”

“What is the target price for an in-flight deal?”

“How am I managing my non-core transactions?”

IBM procurement teams were able to answer these questions, but only in manual and time-consuming ways. Instead of acting on analytical insights, buyers were forced to create the insights themselves. Additionally, historical analysis was neither repeatable nor scalable so buyers created them on their laptops. The issue is that the spreadsheets they used often contained data from untrusted or unvalidated sources, causing inconsistency in results.

New features and their benefits

man holding a tablet

Cognitive Data Enrichment

Get enhanced visibility by combining traditional structured data sources with deep contextual linkage to item, service, supplier and markets

woman using a laptop while holding a box

Price Opportunity and Prediction Insights

Compare current and predicted prices for select items and services to pricing contained within IBM’s cognitive knowledgebase and applicable external data feeds

Woman looking at a screen

Advanced Category Analytics

Expand category awareness with ability to instantly examine consumption in multiple dimensions beyond financial; benefit from a Watson library of quantitative data relationship insights.

Idea

Starting with the data

Vast amounts of data need to be consumed and analysed in order to make sound assessments. But predicting price and trends is extremely difficult without the help of AI solutions.

IBM needed to break down silos to create greater visibility across the organization. A cross-disciplinary team of experts from IBM procurement, process consulting and IT organizations, coupled with advanced analytics experts from the venerable IBM Research organization, developed advanced data cleansing and enrichment techniques. Despite the real-world reality that “perfect data” is a fantasy, the concept team was able to provide rich insights within weeks.

The ability to get insights quickly and generate immediate value to the buyers led to the realization that there was value in pursuing a broad-based transformation.  This led to the creation of a procurement analytics platform with applications that address the full source-to-pay continuum.

This solution injects internal, external, structured and unstructured data, providing procurement practitioners with insights into spend and competitive analysis relative to the market. It also provides the ability to more strategically manage spend across the supply base through comprehensive pattern insights and outlooks.

Procurement solutions

Master data mgmt

Master data mgmt

Analytics and insights

Analytics and insights

Sourcing and contracting

Sourcing and contracting

Content mgmt

Content mgmt

Order mgmt & Helpdesk

Order mgmt & Helpdesk

Payables

Payables

Impact

Optimizing 62 million lead-to-cash transactions annually

The procurement analytics platform is now core to IBM procurement and supply chain operations around the world. Teams can strategically manage spend across the supply base through comprehensive spend pattern insights and outlooks.

Activities that used to take days to complete now take just minutes. Agility has become a cultural phenomenon with the analytics platform, enabling immediate and beneficial actions. For instance, validating competitiveness of inflight complex deals against the market used to take hours or days depending on complexity – now, it takes minutes. Category managers used to spend days mining data to surface potential opportunities and understand risk. Now, with the advanced analytics capabilities, the workload is significantly reduced through automated insight generation.

Prior to the transformation, practitioners had only partial visibility into procurement data. Now there is no limit to the amount of data that can be consumed, interpreted, presented as insights and acted upon. This has helped IBM professionals innovate, evolve and meet the demands of today’s changing markets.  

As a result of the success of its own transformation, IBM has made these solutions available to clients and partners, helping them to transform into Cognitive Enterprises.

Benefits

Delivered USD 67 million in savings in first year

Delivered USD 67 million in savings in first year

Reduced procurement costs by 13 percent

Reduced procurement costs by 13 percent

Achieved an immediate 4-point improvement in net promoter score (NPS)

Achieved an immediate 4-point improvement in net promoter score (NPS)

Case studies

Lead-to-cash

IBM created a finance solution that is reimagining the way customers buy and sellers sell.

VW

IBM and Volkswagen co-created a mobility services app to reinvent the driving experience.

Generali

IBM and Generali used intelligent workflows to build better experiences for insurance customers.

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