How ORO Labs and BAT are recoding procurement

For BAT, a leading consumer goods manufacturer, recoding procurement means going back to the foundations of how the function operates. Speaking at DPW New York, Eduardo Chrispim, Procurement Excellence and Digital Transformation Leader at BAT, said the event’s theme of ‘Recode’ resonated because digital transformation must extend beyond systems alone.

“We tend to think about recode in the technical meaning of the word, but for me it is much bigger than that,” he explains. “In digital transformation, it is about recoding and reconfiguring the culture, the people, the talent and the mindset. It is also about how processes are built, going back to the drawing board and redefining the ecosystem of solutions.”

That thinking is shaping BAT’s work with ORO Labs, as the business looks to rethink its procurement technology and create a more connected buying experience. Lance Younger, EVP, EMEA GM and Global Alliances at ORO Labs, sees ‘Recode’ as an indicator of a wider trend across procurement. “It is about going back to the basics, the foundations, and then rebuilding them again in a completely different way,” he says.

Rebuilding from the foundations

With procurement teams under pressure to move faster as markets become more volatile, this rebuilding work is becoming increasingly urgent. There’s a need to manage volatility while also managing risk and looking for new ways to innovate. There’s huge potential for new tools, particularly artificial intelligence (AI), to solve some of these challenges, but technology is just one element of the wider transformation.

“Procurement processes and platforms are extremely fragmented,” Chrispim says. “That deserves special attention in redefining how the ecosystem of tools should work together. We need to rethink the data flows, rethink the process, and rethink the intent of the process, why it exists in the first place.”

There’s often the temptation to add a new tool to solve an immediate problem, but this can lead to further fragmentation if the organisation doesn’t address what’s going on behind the scenes. 

Younger has seen this pattern before. “In years gone by, people have done a technical transformation and then wondered why it has not been successful,” he says. “Now more than ever, you have to reshape the operating model. That means the skills, how you deliver the service from procurement to the business, and how you deliver it to suppliers.”

Fix the process before adding AI

AI can be powerful for procurement teams, but Chrispim urges caution. He says that without looking at the underlying processes, “you’re basically scaling chaos.”  

“It is very important to step back and understand why the process exists,” Chrispim adds. “It is a good time to think about the problem and the solution. What are we trying to solve with the platforms?”

The AI conversation has changed significantly in recent years. The emergence of large language models means organisations can now work differently with structured and unstructured data, using semantics to interpret information in more flexible ways. However, those outputs are only as useful as the data feeding them. 

The same goes for automation. “Procurement should not be completely automated,” says Chrispim. “You should automate the most transactional and repetitive activities, such as tactical sourcing, supplier onboarding, and some supplier screening activity. But there are areas where we need the human element, including strategic partnerships and building relationships with stakeholders and suppliers.”

Both Chrispim and Younger agree that AI must be built on good foundations and shaped by proper governance and controls. If procurement teams are going to rely on tools to recommend decisions, they need confidence in the processes and data behind them.

Finding the right partner

This focus on foundations shaped BAT’s decision to work with ORO Labs. The relationship began a year ago, as BAT looked to rethink its technology stack and make deliberate choices about the partners that could support its procurement transformation. The value case was practical as well as strategic, with BAT looking to reduce friction across the buying and sourcing journey. 

“We wanted to partner not only with what a solution provider has now, but also understand their vision and how we can share that to become a best-in-class procurement function,” says Chrispim. “We found ORO Labs to be a leading organisation in the intake and orchestration space, which resonated with the problem we had in bringing more efficiency to the buying process, improving the buying experience, and improving the sourcing experience for procurement users.”

The alignment was also clear from ORO’s side. “There was a nice fit from day one with where BAT wanted to go, and we saw the ability of the teams to work together,” Younger says. “That all came together at the Procurement Leaders Awards where BAT won Procurement Team of the Year. Oro Labs won Top Procurement Technology Provider the same night. It’s almost the perfect replication of where we are now, but also where we are going to be in the future.”

Procurement’s changing role

Cost remains important, but BAT is pushing beyond a purely cost-centric model. Around 20% of BAT’s procurement team do not have savings or cost targets. Instead, they are focused on innovation, growth, and value creation.

“Sustainability is another area,” Chrispim adds. “Procurement is unlocking sustainability goals and commitments that organisations are making. Procurement is creating much more value than just cost, and that will continue to be amplified in the coming years.”

These priorities might vary across organisations. “What’s important is that procurement departments make a conscious decision about what matters to them,” says Younger, “whether it’s cost, risk or sustainability. Then they follow through on it with conviction.”

Turning ambition into action

That need for conviction is also what makes forums such as DPW New York so valuable. The event brings together a community of procurement leaders, practitioners and solution providers who are not only discussing the future of the function, but also actively working through how transformation happens in practice.

“DPW is a nice community of people that actually do things,” Chrispim says. “It is very tangible. You understand what solution providers are implementing, but you also meet peer companies and understand what is working and what is not from those actually driving the projects.”

For BAT and ORO Labs, the theme of ‘Recode’ reflects where procurement is today. Transformation must start with the foundations, as this will support faster decisions, stronger supplier relationships, and a function better equipped to deliver value beyond cost.