Public sector purchasing stands to gain the most from data-driven procurement, and so far has done the least.
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Data-driven analytics have the potential to empower CPOs with greater understanding of their ecosystems, value chains, and internal operations. Big data can shine a light on places where there’s room to create efficiencies, contain costs, and mitigate risk.
In the June 2023 issue of Government Procurement, Steve Isaac notes that analytics can create significant benefits in areas like negotiation, vendor segmentation and yearly planning. He goes on to note, however, that “advanced analytics and data science haven’t exactly broken into the public procurement zeitgeist. It isn’t the subject of keynotes at the annual conferences and meetings … It isn’t a qualification line on most procurement job listings. For most agencies—even large ones—introducing advanced data science is not a priority.”
It’s not altogether shocking that, while the private sector is investing heavily in the potential benefits of data analytics and other digital procurement tools—with the global procurement software industry predicted to exhibit a CAGR of over 10% between now and 2032—public sector procurement lags behind. Isaac notes that it’s a “chicken and egg” issue with the case for a robust data science function hinging on the benefits of that investment being understood, which requires them to be felt, which can’t happen until investment, but… and so on.
However, there’s a case to be made that this delay in data science investment by public sector procurement agencies is one of the critical stumbling blocks also preventing public sector procurement from adopting artificial intelligence, machine learning, and other cutting-edge technology with the potential to solve a lot of the recurring public sector pain points.
Raimundo Martinez, Global Digital Solutions Manager of Procurement and Supply Chain at bp, noted in a recent interview with the MIT Technology Review that “everybody talks about AI, ML, and all these tools, but to be honest with you, I think your journey really starts a little bit earlier. I think when we go out and think about this advanced technology, which obviously, have their place, I think in the beginning, what you really need to focus on is your foundational [layer], and that is your data.” Martinez stresses the importance of building a strong data foundation that allows CPOs to take advantage of emerging technologies in their supply chains.
It’s not as though public procurement departments are short on data either. Isaac argues that, “if data is a precious resource, governments are gold mines.” Governments collect huge amounts of information all the time. The widespread adoption of digital ERP systems, eProcurement, supply chain management software and vendor performance sites is now doing a great job of mining that data.
As noted in a report by researchers from the Government Transparency Institute, a European think tank, “The digitalisation of national public procurement systems across the world has opened enormous opportunities to measure and analyse procurement data. The use of data analytics on public procurement data allows governments to strategically monitor procurement markets and trends, to improve the procurement and contracting process through data-driven policy making, and to assess the potential trade-offs of distinct procurement strategies or reforms.”
An overabundance of digital solutions and a dearth of trust in procurement data presents a unique challenge for CPOs.
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The digitalisation of the procurement sector is well underway, with the global procurement software market set to grow by $11 billion over the next decade, with demand for cloud-based procurement solutions and automated and efficient procurement processes driving this revenue growth.
Procurement efficiency drive
However, a proliferation of digital tools across the procurement landscape points to the growing danger of inefficiency and lack of clarity when it comes to CPOs’ digital transformation strategies. A report by procurement software vendor Productiv found that “procurement and IT are being inundated with software access, vendor intake and renewal requests,” leading to a 32% uptick in the number of SaaS apps procurement departments are running, and a steadily growing workload for purchasing departments as they manage, on average, 700 vendors across various indirect procurement categories.
“This patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos,” notes Aashish Chandarana, Chief Information Officer, Productiv. “Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.” The result is less time and less data to support generating meaningful insights to drive the necessary efficiencies that procurement needs to start producing for the business.
Frequently, it also seems, procurement spends so much time managing sprawling, disconnected tech stacks, that it doesn’t have the time to ensure its data is trustworthy either. A SpendHQ report found last year that “79% of non-procurement executives express limited confidence, or none at all, in utilising procurement’s data for making strategic decisions.” CPOs might recognise the critical nature of accurate data in driving decisions, but so far it seems as though the industry is struggling to ensure the accuracy and reliability of procurement data throughout the wider organisation.
Big Data potential
The potential of big data, effectively harnessed, is tremendous in the procurement process—potentially creating true visibility in otherwise murky or completely opaque value chains, highlighting opportunities for cost containment and efficiency, and helping flag risk factors that could preempt disruption.
Organisations looking to maximise the potential applications of data within their organisations need to be simultaneously mindful of the need for a decluttered tech stack and verifiable, trustworthy data if they are to avoid the pitfalls currently affecting the sector.
Data is the key to unlocking new opportunities and managing risk, but capitalising on the opportunities of data in procurement is not without challenges.
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Over the past few years, the procurement sector has been thrust into the limelight, as CPOs are increasingly being identified as drivers of value creation, cost containment, and risk management.
In addition to business and process innovations, a lot of the changes in the role of procurement are due to a wave of digital transformation sweeping the industry. If digital transformation is the engine driving this elevation of the procurement function, then data is the fuel powering it.
Effectively capturing, organising, and utilising data to generate meaningful insights can produce significant benefits for the procurement process. However, costly investment into data analytics, flawed adoption strategies, and oceans of bad data can turn all the potential for wins into a whole new source of risk for the business. This week, we’ve gathered our top 3 challenges CPOs face when incorporating big data into their operations.
1. Bad data
No, I don’t mean Lore from Star Trek: TNG. Bad Data is a fundamental and pervasive risk to procurement professionals looking to empower their analytics. It’s also a far more widespread problem than many executives would like to believe. Last year, a report by SpendHQ found that 75% of procurement professionals doubted the accuracy of their procurement data, leading to almost 80% of executives outside the procurement function lacking confidence when it comes to making decisions based on that data.
In order for it to make any meaningful contribution to reducing costs, mitigating risk, promoting sustainability and driving meaningful change within the business as a whole, the data used by procurement has to be accurate. Pierre Laprée, chief product officer of SpendHQ, noted in the report that “procurement teams must do more to build and maintain influence within their organisations, including removing the dependency on spreadsheets to become more efficient.”
2. Choosing the right technology
Collecting, managing, and drawing insights from your procurement data is a matter of using the right digital tools. However, choosing the right digital tools—especially with CPOs often facing pressure from stakeholders to transform their operations digitally—can be a complicated prospect with potentially severe negative consequences ranging from sub-par outcomes and wasted budgets to catastrophic data breaches.
A report by Productiv found recently that, while “procurement and IT are being inundated with software access, vendor intake and renewal requests,” the number of applications and subscription services being managed by the average business has risen by more than 30% in the past two years. Combined with growing workloads, skill shortages, and an unclear vision for handling these growing technology stacks, Productiv’s report notes that “this patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos. Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.”
3. Creating spend data visibility
Dark purchasing refers to the phenomenon of procurement expenses incurred outside a business’ defined procurement process. It’s uncontrolled spending that procurement can’t see, but that still gets added to their numbers at the end of the quarter.
Big data and procurement is often thought of in terms of its ability to help understand the world outside the business’ walls—logistics, pricing, supplier behaviour throughout the market in response to market changes—but effectively deploying data analytics to understand why dark purchasing is happening, when, and by whom is a vital step in figuring out how to reduce its impact on the company.
Unfortunately, this presents a serious challenge, as many procurement departments lack a cohesive data organisational strategy; data is often scattered throughout multiple silos in the organisation, hidden from procurement in much the same way that unapproved purchasing hides until quarterly expense reports. Overcoming this challenge and creating a holistic, accurate view of company spend—both within the procurement function and outside it—is one of the greatest opportunities and challenges presented by the infusion of big data into procurement.
At DPW Amsterdam 2023, we chat with procurement leaders to find out why the conference is regarded as one of the most influential tech events in procurement today…
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Koray Köse, Chief Industry Officer, Everstream Analytics
“When you go to events that are this disruptive that are actually giving you an environment like a concert where people have a very positive vibe, that’s when the best experiences are shared and people open up. If you listen, you now understand what the real challenges are. If you’re at a conference that is very formal, then you get a very different feeling. It is the casualness of DPW that helps the authenticity of every company and its challenges.
“It’s a unique environment where you get very authentic, bold, blunt, but truthful statements of perception of actuals, desires, future vision, and also conversations about how can we as a community do things differently? How can we as potential future partners do things differently? And how can tech concatenate value and how can we actually now do that in a partnership with companies that we don’t even consider clients at this point? They’re not clients, but they share exactly what they want and those are benefits.
“I think it’s almost like an incubator environment because a lot of ideas are formed here. Lots of connections are made and a lot of deals for vendors are done too. You look at the floor and there are about 120 vendors all here for the same reason, it’s amazing. To get that concentrated over 48 hours, a lot of people will walk away and need to process what happened and the conversations they had. Then we look forward to next year.”
Koray Köse, Chief Industry Officer, Everstream Analytics
Ashwin Kumar, Vice President, GEP
“DPW has given me some insight into what kind of options there are. Sometimes I go through the booths and I see two solutions and question how they’re different. At first, I think they’re doing the same thing. And then once they start explaining, you find out the nuance. Now I understand this may not be applicable for this client of mine that I’m working with maybe this is for a company that’s growing at 30%, not for someone who is already there and growing at 2% or 3%.
“I think that way DPW has helped me understand how do you stitch different things together and then take it to a client and say, ‘this is the ecosystem you need at this point in time. It could change in six months, or three months, we don’t know. Go with it for now and you don’t have to worry about being married to that solution for too long.’”
Ashwin Kumar, Vice President, GEP
Kathryn Thompson, Partner, Deloitte
“I think DPW shows us the art of the possible in digital procurement. It shows us if you were unconstrained and you could do anything, what would you choose and build? You don’t have that in some of the other tech conferences that are a bit tied into an infrastructure they need to build. I love this what if idea we have here. I think it’s fabulous we have this confluence of organisations that need these tools, all the different startups and solutions to bounce ideas off and work out the future. DPW has real energy and passion like no other. You must get your message across in three minutes or it’s gone, that passion is brilliant because there’s nothing similar.”
Kathryn Thompson, Partner, Deloitte
Scott Mars, Global Vice President of Sales, Pactum
“This to me, especially for Europe, is the premier procurement technology event. All the main vendors, our competition as well as our peers are here. There’s many CPOs in attendance alongside procurement and digital transformation leaders so for us as a vendor, it really is a great audience. We love having the ability to network with our peers or other vendors, potential partners and these procurement leaders and visionaries so it’s definitely a great opportunity to do that. It is certainly one of the best procurement events I’ve ever been to. They do a great job here at DPW.”
Scott Mars, Global Vice President of Sales, Pactum
Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee
“Whenever I go to conferences, I get to see the latest technology exhibited. I can have conversations with many people in a very short period of time. Number two, for me as a CPO, I come here as well to meet my peers and have good conversations. Amsterdam is always a good place to come and maybe combine business with pleasure.”
Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee
Gregor Stühler, CEO, Scoutbee
“Procurement people are incredibly busy and getting a hold of them is quite difficult. Having them all in one spot is super helpful. One key challenge for procurement software providers is that the buying centre is not the same. If you sell sales software or whatsoever, it’s usually the same buying centre. You approach the Chief Revenue Officer or something like that. In procurement, it’s not always the CPO that decides on the tech. But DPW is filtering out and attracting the talent that is making those tech decisions and it’s extremely valuable for the startups and for the tech companies as well.”
Gregor Stühler, CEO, Scoutbee
Alan Holland, CEO, Keelvar
“This event has actually been a catalyst for some of the transformation we’re seeing in procurement. Matthias and his team have grown together best-of-breed vendors and they realised early on that change is afoot and legacy systems are going to become part of the history of the space. He embraced these vendors which are coming up with exciting new developments and provided us with a venue to put our best foot forward and present ourselves to other large enterprises with an appetite for understanding what innovation was required. We’re very grateful to Matthias, we’ve worked with him from day one and we think he’s done fantastic work here.”
Alan Holland, CEO, Keelvar
Prerna Dhawan, Digital Lead, Procurement, The Smart Cube
“I think DPW raises the profile of procurement. DPW has elevated the function because procurement is no longer seen as the industry that thinks of digital at the end. It’s not a laggard anymore. I attended the first DPW event pre-Covid and thought it was brilliant then but it’s got bigger and better since. We talk about this in procurement, you get innovation from your suppliers but if you think about innovation when it comes to technology you have to be open to talk to vendors and that doesn’t happen in other conferences the way it does here. I think DPW has created that platform for learning from each other to happen.”
Prerna Dhawan, Digital Lead, Procurement, The Smart Cube
This presumably goes all the way back to when every company was a sharp rocks and oxen firm. For the modern enterprise, identifying how the technology du jour empowers successful organisations in your industry and harnessing it for your own ends is just as vital to success today as it was for the Egyptians in 3,500 B.C. to figure out as quickly as possible where the Sumerians were getting all those cool, new, super shiny and sharp new rocks.
Nowhere is this more true than in the procurement sector. A place where harnessing Big Data can drive new efficiencies, improve resilience and agility in the face of disruption. This is done all while helping procurement teams understand their business in real-time.
However, this doesn’t mean that Big Data analytics adoption has been simple, easy, or without risk. The disruption caused by the COVID-19 pandemic highlighted most of a company’s value chain is dependent on external third parties. There’s only so much you can get done without engaging with organisations up or down your value stream.
Procurement teams can typically find themselves managing expenses accounting for about 50% of a business’ revenue — sometimes overseeing spend in the billions of dollars. Procurement’s ability to maintain and navigate increasingly complex networks of relationships can be hugely enhanced by the power of analytics. However, adopting the wrong analytics platform, feeding it the wrong information, and drawing the wrong conclusions can be disastrous.
By gathering data from both internal and external sources, then analysing it with the appropriate tools, procurement teams have the capacity to create powerful insights in less time than ever before.
Combining environmental information (weather patterns, crop cycles, raw materials pricings, political unrest, etc.) with rich data generated within a company’s operations, mean that procurement teams using Big Data analytics have a significant leg up when it comes to predicting trends, finding favourable prices for buying, and sourcing inventory from a diverse network of suppliers so as not to place undue stress on their partner network. Reduced costs don’t hurt matters, either.
A closer look at some of the best tools to help your procurement function capture the potential benefits of a world powered by big data.
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Procurement is becoming an increasingly data-driven field. Correctly gathered, organised, and analysed, Big Data sets can help a procurement department do everything from increase efficiency and reduce costs, to make more ESG-conscious decisions or shore up their supply chain against unexpected disruption. However, managing huge amounts of structured, unstructured, internal, and external data can present a significant challenge for procurement staff. This is especially true when procurement professionals haven’t needed to also be data analysts until recently. This means there might be understandable skill gaps in your team.
Luckily, there exists a wealth of digital tools designed to capture, analyse, and generate insights from massive amounts of data. This is all specifically catered towards enhancing and elevating your procurement function. Here’s a closer look at five digital tools to help maximise the potential of Big Data in your procurement function.
1. GEP Smart
With AI-powered spend analysis, as well as strategic sourcing, purchase order processing, and invoice management, GEP Smart is one of the more broadly capable and robust procurement tools on the market. The platform is capable of absorbing, collating, and converting large data sets into everything from compliance procedures to supplier management strategies.
2. Kissflow
For smaller organisations still in the process of growing their procurement teams, Kissflow can help bridge the gap between a legacy or underdeveloped procurement function and where it needs to be with less emphasis on learning complex new digital tools. Kissflow is all about being simple, accessible, and customisable. The platform handles basic procurement functions natively, but integrates with a huge variety of other tools and programs.
3. Coupa
Focused largely on spend management, Coupa unified, streamlines, and empowers the source-to-pay process. The firm uses Big Data analytics to manage working capital and forecast budgets, giving procurement professionals more visibility over finances.
4. Tamr Procurement Analytics
Tamr Procurement Analytics specifically targets the problem of siloed data within the supply chain, helping procurement professionals quickly unify their data sets and start using artificial intelligence to generate insights at speed. The AI and machine learning decision engine underpinning Tamr’s platform enriches user data while also curating it against a rigorous set of standards to ensure quality.
5. TARGIT Decision Suite
TARGIT is a business intelligence and analytics tool that can gather observations from throughout the supply chain. This allows them to be more easily converted into actionable insights. The platform embeds directly into internal and external-facing portals, allowing a procurement team to share dashboards with the entire supply chain network. By creating a holistic impression of the entire supply chain, TARGIT improves the results of its predictive analytics, increasing efficiency and resilience.
At DPW Amsterdam, Kathryn Thompson and Fraser Woodhouse, Partner and Director at Deloitte, discuss the rise of generative AI and the impact on procurement.
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Procurement is changing.
That’s something that isn’t lost on Kathryn Thompson, a Partner at Deloitte.
As part of her role, she leads the Sourcing and Procurement Market Offering within Deloitte’s Consulting division in Europe, Middle East and Africa. Originally from Australia, Thompson has worked in procurement since 1996 and has observed quite the evolution over the past two and a half decades.
Procurement’s transition
Over the years, procurement has shifted from a traditional back-office function to an entity operating at the fore of a company’s strategy. Having been involved in the industry for more than 25 years, Thompson has had a front-row seat to procurement’s digital transformation. While she affirms that AI has changed procurement, she isn’t convinced that generative AI is changing the space – yet.
Kathryn Thompson speaking at DPW Amsterdam 2023
“We see lots of AI tools pulling from different data sources to apply intelligence to different decisions,” she explains. “But the generative part, beyond contract summaries or pulling together draft RFPs, remains to be seen at scale. One of my more sophisticated clients has run 300+ Proof of Concepts in AI across their business, including and beyond procurement, and admits they are yet to scale or drive meaningful ROI from any POC. At the moment, the generative AI side for us, isn’t getting past proof of concept or the pilot stage yet.”
Fraser Woodhouse is a Director at Deloitte and has been with the firm since February 2019. He believes that procurement and sales teams will use gen AI for RFPs over the next six months. “I think they’ll do it without telling anyone,” he explains. “It will eventually get to a point where I think that sort of crutch will become a necessity. When it’s built into the enterprise platforms, people will forget how to write contracts because the AI does it automatically. People will even use it to write their emails.”
The AI dilemma
AI on its own is pointless – it simply doesn’t operate the way you need it to. That’s why the importance of making tech work in a way that creates efficiency has never been more important. For Woodhouse, he insists it’s about putting a human at the right place in the process. “One of the solutions I saw was a gen AI assistant helping write an RFP built in, but then the supplier has a gen AI assistant helping do the response to the RFP as well,” he tells us. “Very quickly you’ve got two AIs negotiating with each other, and that doesn’t work unless a human is curating stuff at that point in the middle.”
Given the ease of AI usage, there is a discussion as to whether tech implementation could go too far the other way. Could humans lose the ability to perform simple tasks they previously wouldn’t have thought twice about? But Woodhouse is quick to dispel that myth and believes that despite the growing reliance on technology, people won’t be rendered useless. “People didn’t forget how to communicate when spellcheck came around, they could communicate better,” he explains. “If you are a supplier and are responding to an RFP and you’re pressing their generative AI button to build the response and five of the other suppliers are doing the same thing, who’s going to stand out? The ones who wrote it themselves or at least edited it and had meaningful input.”
“You can use AI for the transactional, easy stuff but there must be a value underpinning it,” adds Thompson. “The winners are going to be the ones that are human about things.”
Fraser Woodhouse and Kathryn Thompson speaking to CPOstrategy at DPW Amsterdam 2023
Procurement’s place
With such significant innovation happening, it is seen as a transformative time to be in procurement. As automation speeds up, the necessity to upskill new graduates coming into the workforce and encourage them to learn higher-value work earlier in their career journeys is becoming increasingly important.
“Covid and the following work from home attitude has a lot to answer for,” explains Thompson. “Pre-Covid, you would rarely work from home. Consultants, suppliers, delivery partners always went to the client’s site. That’s where innovation, creativity, results that are more than the sum of their parts happen. That’s not replicable by generative AI. We need to get everyone back out there and doing things. Rather than replacing jobs, we’re replacing tasks. The tasks that we’re replacing are the likes of data analysis, synthesising, and summarising. Hopefully, it means we’re doing real-life negotiations, brainstorming and innovation instead which are the things that people love to do. Fingers crossed, it just means the bar goes up.”
DPW has announced it is expanding into North America following the success of its Amsterdam offering.
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DPW has announced it is expanding into North America following the success of its Amsterdam event.
Founders Matthias Gutzmann and Herman Knevel revealed the news via LinkedIn to confirm a move that will see significant growth into new territories.
Gutzmann exclusively told CPOstrategy: “Marking a pivotal moment for DPW, our expansion to the US isn’t just about growing our footprint, it’s about building on our ongoing momentum over the last few years and bringing the enthusiasm and expertise of DPW.
“We aim to bridge procurement organisations with innovative startup founders and change makers, fostering the growth of a digital procurement and supply chain ecosystem in North America.”
Accompanied by a photo of the duo outside Google offices in Silicon Valley, California, he posted on Monday (27th November): “I am currently in #SilliconValley together with Herman Knevel, gearing up for an exciting week filled with meetings with tech giants, founders, visionary partners and future collaborators.
“Having previously led the expansion of Procurement Leaders | A World 50 Group Community into North America, I must say I feel extra energised to bring my experience and strong relationships within the North American market for the benefit of DPW.
“Stay tuned for more updates as we embark on this exciting phase of growth and innovation!”
Founders Matthias Gutzmann and Herman Knevel
Since launching DPW in Amsterdam in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. The conference welcomed over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October.
Last year’s event was held at the former stock exchange building, the Beurs van Berlage, with the theme called “Make Tech Work” which focused on turning digital aspirations into a reality. DPW Amsterdam has already been announced for October 9 and 10, 2024, next year.
Further details about DPW North America will be revealed in due course.
Last month, CPOstrategy travelled to DPW Amsterdam. Here are five takeaways from the biggest and most influential tech event in procurement.
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1. Digital transformation isn’t just about tech
David Rogers, author of The Digital Transformation Roadmap, delivered an important keynote that highlighted that digital transformation doesn’t just mean technology. He told the audience, “The hard part about transforming organisations isn’t about tech. It’s about making the technology work for your customers and for your business.”
He expressed the importance of delivering value in your organisation while also describing the art of rethinking business to define what growth opportunities there are by thinking differently about customers, competition, data, innovation and value. Rogers provided guidance to the audience and unveiled a five-step digital transformation roadmap. These are: define a shared vision, pick the problems that matter most, validate new ventures, manage growth at scale and grow tech, talent and culture. Rogers explained to the attendees gathered before him, “ChatGPT is not your strategy. Fall in love with the problem and not the solution.”
2. Building connections
DPW welcomed more than 1,250 procurement professionals over the two days while also hosting more than 120 procuretech solutions. New digital cards which were worn as lanyards around an attendees’ neck allowed for instant connections to be made and eradicated faffing about for contact details or losing important business cards. The buzz and hum of chatter in the air across the conference was audible. A walk around the two expo halls, both kitted out with dozens of tech solutions each offering something different to engage with ensured plenty of choice of destination. Many booths provided gifts which added a personal touch, such as Gatekeeper’s dragon or Omnea’s socks.
While the virtual only events in years gone by during the Covid period served a purpose, nothing could beat the sense of community and valuable face-to-face meetings that attendees were provided with.
3. Gen AI is a game-changer
If you were a fly on the wall in most conversations, a common theme would appear more often than not – generative AI. Indeed, the technology dominated thoughts at DPW Amsterdam 2023 which has only been accelerated given the ever-increasing influence of OpenAI’s ChatGPT which only launched a year ago. But gen AI isn’t only about chatbots, AI adoption was prevalent across the floor with each procuretech ecosystem showcasing its own spin on new technology as well as fresh and innovative ways of offering services.
Generative AI is firmly on the tips of people’s tongues. While its possibilities appear limitless, its rise to prominence has led and will continue to cause debate about how far its capabilities can reach in its current form. Expect that to continue.
4. People are still the secret sauce
As exciting as new technology is, without good people your operations are doomed to fail. While there have been concerns from some sections of the space that robots are here to replace humans, DPW Amsterdam’s conversation revolved around making tech work for us and about using technology as a tool to make day-to-day life easier.
Ultimately, even chatbots require a human at the other end to make the correct inputs otherwise all the end user receives is data without direction. While discussions were had as to whether AI can help plug talent gaps, all it means is that boring, outdated data-entry tasks will be taken over by machines and allow the next generation of the workforce to focus on greater value-add work that will lead to increased efficiency for themselves and the company they work for.
5. Now is the greatest time to be in procurement
In comedian and host of DPW Amsterdam Andrew Moskos’ opening speech he reflected on procurement’s evolution and transformation. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk, and 80% of the spend of a company goes through us.” It was quite the welcome – and set the tone for the subsequent two days.
With an unprecedented amount of innovation at a practitioner’s fingertips in today’s ever-evolving and transformative world, the future is what procurement makes it. Gone are the days of procurement being some boring back-office function hidden out of sight, the industry has had a sudden injection of life via digitalisation.
Matthias Gutzmann, Founder of DPW, exclusively told us: “It’s the best time to be in procurement. It’s the most exciting era to be in procurement and supply chain so it’s an amazing time that we need to celebrate and get loud about it.”
Giorgio Sarno, Senior Data Scientist at Stratio, on how AI and ML can unlock data from both internal combustion and electric vehicles to reduce their carbon footprint and hasten the transition to zero-emission transport.
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A single bus journey pollutes 82% less than the same journey by car.
For this reason, a small decision like taking public transport instead of driving is a big step towards lowering emissions. If we then consider the significant reduction in greenhouse gas emissions that transport operators can achieve by implementing eco-driving solutions or by transitioning to electric vehicles, choosing the bus over personal vehicles becomes an even more sustainable choice. Transport operators are already moving in the right direction in terms of minimising the environmental impact of their services, and they’re doing so by leveraging vehicle data.
The bus is essentially a black box, where vehicle technical data is locked and remains largely inaccessible to transport operators. However, by automating the collection and analysis of this data, fleet managers can rely on artificial intelligence (AI) and machine learning (ML) algorithms to implement a predictive maintenance approach. This means that vehicle sensor data can be turned into actionable insights to help reduce the carbon footprint of internal combustion engine (ICE) buses, hasten the transition to zero-emission transport, and minimise breakdowns and downtime, resulting in a more reliable public transport service.
Car vs Bus
With cars representing 72% of EU road transport emissions, it’s key to make public transport the preferred form of travel. However, in order to create a push towards shared mobility and leverage the environmental benefits of public transport, operators and public transport agencies need to ensure it can live up to the promise of reliability, getting passengers where they need to be, when they need to be there. To guarantee reliability, it is necessary to turn our attention back to the most crucial component of public transport: the vehicle.
AI predictive maintenance is like a digital stethoscope for buses, enabling operators to tune in to the state of health of their vehicles’ critical systems and components. By collecting the data from built-in vehicle sensors and analysing the patterns that indicate the condition of components, maintenance managers can leverage real-time, actionable insights to inform their decisions. AI can identify tricky faults that humans could overlook – tracing leaks in the compressed air system or the wear and tear of brake pads, for example.
With such a system in place, bus operators can depend on real-time monitoring to assess whether their vehicles’ brake pads need to be replaced, meaning that parts can be ordered in bulk and that maintenance can be scheduled during off-peak periods to avoid service disruptions. Maintenance and repairs can be scheduled automatically and more accurately, contributing to better fleet utilisation and cost savings. More importantly, by preventing equipment failure, vehicle breakdowns can be pre-empted to reduce downtime and protect both revenue and customer experience.
The data on equipment behaviour, failure modes, and degradation patterns can also inform asset management strategies, including engineering decisions related to repair, replacement, or refurbishment of components and systems. By extending the useful life of assets and maximising their performance, operators can minimise waste generation, reduce the need for new equipment production, and lower the environmental impact associated with resource extraction, manufacturing, and disposal.
Moreover, early identification of sub-optimal operating conditions enables engineers to fine-tune equipment settings, adjust operational parameters or identify faulty components, reducing energy consumption and resource waste. By optimising resource utilisation, operators can function at higher energy efficiency, reduce carbon emissions, and enhance the overall sustainability of their operations.
Curbing ICE emissions
Predictive maintenance solutions can also be used to inform eco-driving strategies to further reduce the carbon footprint of ICE bus road usage. By analysing driver patterns, optimal RPM and idling time, operators can implement strategies to lower fuel consumption and put in place a range of continuous improvement processes. Arriva Czech Republic has recorded a saving of 942 litres of diesel per vehicle per year using this approach. This equates to 2.6 tons of carbon dioxide emissions avoided per vehicle, per year.
Speeding the transition to EVs
For transport operators, new EV technology poses challenges as well as opportunities. It comes with new breakdown patterns and failure modes and requires a new knowledge-set to minimise life cycle costs and optimise battery maintenance and route management. Additionally, the greater up front, maintenance and infrastructure costs of the transition mean that operators must have a detailed strategy in place to minimise the impact of the shift on their bottom line.
Just as with their ICE counterparts, by combining the granular collection of vehicle data and large-scale data processing with autonomous AI systems, public transport operators can gain valuable insights from the new EV data they have access to, creating a continuous feedback loop that constantly increases the ways in which data can be leveraged. The performance, faults, and range of EVs can be analysed and used to inform the planning of smooth, efficient, and profitable operations.
Predictive battery analytics for example can provide an accurate, comprehensive view of the battery health evolution of an EV bus, allowing for effective route planning and charging requirements, as well as usage optimisation metrics to extend the lifespan of the vehicles. This is crucial given the high proportion of the overall cost of an electric bus that the battery represents. By leveraging State of Charge (SoC) and Depth of Discharge (DoD) data, fleet managers can understand if the operation profile can be changed to maximise battery life, reducing the total cost of ownership of electric buses. This type of analysis is fundamental for an operationally successful and profitable EV fleet deployment.
The future of AI and ML for public transport
By onboarding next-gen AI and ML predictive maintenance technology, the future of sustainable, affordable, and highly efficient public transport is promising. The actionable insights on potential component failures, fuel consumption and operational efficiency offer full control over the health of both ICE and electric buses. This can be harnessed to enhance reliability, encourage passengers to move away from private car usage, curb emissions and wastage through inefficient driving and maintenance strategies, and pave the way for a smoother and faster transition to EV usage.
AI is constantly learning, picking up data about different categories of vehicle and enabling fine tuning for improved operations. It is a system that will keep on growing with huge benefits and impact, contributing to the goals of sustainable and reliable public transport. With some operators already implementing predictive maintenance, the approach will become more ubiquitous in 2023 and beyond, representing the new frontier when it comes to smoother, more efficient and environmentally friendly operations.
Matthias Gutzmann, Founder of DPW Amsterdam, discusses the conference’s rise to prominence, reflects on challenges and reveals future plans.
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“Our challenge is always around asking ourselves how can we make DPW Amsterdam better every year?”
It’s fair to say Matthias Gutzmann, Founder and CEO of DPW Amsterdam, doesn’t believe in standing still and resting on his laurels.
Since launching DPW in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. And despite welcoming over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October, Gutzmann is eyeing continuous improvement.
In 2018, Gutzmann was researching procurement conferences to showcase his then-employer, Vizibl, a startup. He was frustrated by the options. The existing conferences were prohibitively expensive for a limited startup budget, lacked investors, and failed to attract an audience of startup businesses, which is critical for the development of digital capabilities and to drive innovation. Identifying this gap in the market, Gutzmann left his job in New York, moved into his parents’ house in Germany, and invested his entire personal savings to launch DPW Amsterdam.
“As soon as one conference finishes, we’re already thinking about the next one,” he explains. “We all sit down and think about how we can improve the experience and what new technologies we can bring in next time. It really is a 12-month process to bring it all together.”
Bringing DPW to life
Held at the former stock exchange building, the Beurs van Berlage in Amsterdam, this year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. The two-day event was centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results instantly instead of only concepts and theories.
Despite significant success, Gutzmann maintains that there are some difficult aspects to get right in order to make the magic happen on the day. DPW Amsterdam builds client booths themselves instead of allowing sponsors to bring them themselves. “That’s a massive undertaking to get this done because we need all the design elements from the sponsors,” he says. “It’s that quality standard but we know it comes with more work instead of just allowing people to bring their own stuff. We have Simone Heeremans, Head of Production, who is amazing and oversees logistics such as catering to the suppliers.
“There is also the sales part of the conference which is selling the tickets and sponsorships. We have created this pull for the conference that we didn’t need to build a proper sales team around it. That said, there’s always a stress factor to get the numbers we want every year and grow it. So far, so good.”
The uniqueness of the conference, the problem it solves, and the timing of the launch in 2019 were the basis for today’s success and fast growth.
WHAT MAKES DPW AMSTERDAM SO UNIQUE?
Matthias Gutzmann:
1. THE AUDIENCE
Traditional procurement conferences only attract procurement professionals. But, DPW Amsterdam recognised the need for breaking this silo and for more collaboration in order to harness the potential of new digital technology, targeting an audience of procurement professionals, business leaders, suppliers, startups, data scientists, investors, and young talents No other procurement conference brings this variety of people together.
2. WORLD’S BIGGEST STAGE FOR PROCUREMENT STARTUPS
DPW Amsterdam is built to bring startups into the procurement ecosystem. In 2023, we displayed over 50 startups, giving delegates a unique insight into procurement innovation.
3. ATTENDEE EXPERIENCE I always thought procurement events felt boring – and I felt lost in a sea of guys wearing suits and ties. So, at DPW, our goal is to make procurement cool and sexy. Not an easy feat, I know. Our dress code at DPW Amsterdam is strictly “startup casual.” You’ll see t-shirts, hoodies, and sneakers from attendees, exhibitors, sponsors, and speakers alike. This dress code embodies our entrepreneurial spirit. But it also breaks down barriers– and levels the playing field between big-shot enterprise CPOs and 20-something startup founders.
Better than ever
A large focus for Gutzmann and his team has been tweaking the formula of the virtual experience. Due to the impact of COVID-19, DPW was forced to cancel its 2020 conference before offering a virtual-only event in 2021. The experience, although different, was praised for its ‘TV feel’ and still created a buzz for those watching at home. However, with day-to-day life returning to a new normal, DPW Amsterdam reverted to an in-person conference in 2022 but offered a hybrid solution for those keen to watch the action from afar. “There wasn’t really anything special about it,” he discusses. “If you run an eight-hour live stream from only one stage, you aren’t likely to keep people watching. That’s why this year we asked ourselves: what can we do to increase the virtual experience? So we did just that.”
This year, Gutzmann and his team set about creating a pop-up broadcast studio to generate a television feel with live coverage from podcaster and host of Let’s Talk Supply Chain Sarah Barnes-Humphrey, as well as a reporter conducting interviews on the expo floor. “Now we’ve got cameras moving around which helps bring the whole conference to life,” explains Gutzmann. “We’ve really ramped it up this year and turned it into a large production.”
Up until this point, DPW has run solely in Amsterdam which Gutzmann believes has acted as his organisation’s competitive advantage. It is this approach that has enabled DPW to allow it to reach the level it is today. Hosted at the Beurs van Berlage, Gutzmann is full of admiration for the historic building which was built in 1896. According to Gutzmann, he believes it is what sets DPW Amsterdam apart from other conferences operating in the space.
“We love it here, it’s unique and I feel it’s a key part of the experience,” he says. “But we’re becoming bigger and we might need to build something completely from scratch. Every year, we think about how we can do things differently. I don’t know if bigger is necessarily better, it’s also about the quality of the solutions we bring in. My goal is to map out the entire end-to-end tech ecosystem and bring in that diversity of solutions.”
Bright future
Procurement, like many industries, is suffering from a talent shortage. The need to find ways to plug that gap, whether that’s through education, industry rebrand or AI, has never been so crucial. With an eye on the future, Gutzmann believes in procurement’s workforce of tomorrow and gave out around 100 free student passes this year. “When we talk to CPOs everyone’s talking about talent shortages so we understand the need to bring in that next generation and show them that procurement could be the way forward for them,” he says. “I think in the context of digital, who better to do digital than the next generation? They are more tech savvy so we need them and it’s a great opportunity for both sides because they can meet CPOs and it’s also becoming a place for recruitment too. We are doubling down on young talent 100% and it’s a win-win.”
Gutzmann is candid about the future of DPW Amsterdam and is always open to feedback while striving for continuous improvement. He believes in the value of innovation and shaking things up in order to best meet attendee’s needs. “I always think we can always bring in new speakers, but this year’s agenda was incredibly strong,” he discusses. “It’s really about listening to the people. Ultimately how can we be more relevant around the solutions as well here? How can we better matchmake people? I was wondering about how we can work pre-event with some of the corporate attendees that are coming to the conference around mapping out their challenges to then have more meaningful matchmaking at the event because it’s an innovation showcase here as well. There’s more value to be had but we know that also comes with more work. There’s always more we can think about.”
With an unprecedented amount of technology at procurement’s fingertips today, Gutzmann is in no uncertain terms about what the next chapter of the space holds. “It’s the best time to be in procurement,” he explains. “It’s the most exciting era to be in procurement and supply chain. We need to get loud about it and celebrate that fact.”
Global research and advisory giants Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
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Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
Under the terms of this strategic alliance, DPW LABS, the consulting arm of DPW, and Deloitte will work together to refine the boundaries of innovation in procurement.
From problem and strategy definition to proof of concept and deployment, through the DPW LABS innovation capabilities and digital ecosystem and Deloitte’s global transformation capabilities, the move allows for impact to be delivered at scale.
Deloitte is a global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.
The firm, which is a member of the Big Four in professional services, currently has about 330,000 employees in more than 150 countries and territories.
Founded in 2019, DPW stands as a global leader in procurement innovation. DPW LABS empowers organisations to identify and seize collaborative innovation opportunities with DPW’s line-up of pioneering startups, scale-ups, and tech innovation experts.
Herman Knevel, co-founder and co-CEO at DPW, said: “We are excited about this strategic partnership with Deloitte.
“This partnership will enable us to join forces and make tech work, expand and complement our impact at global scale.”
Michiel Junge, partner of sourcing and procurement at Deloitte, added: “We are united in our mission to make procurement awesome.
“The partnership with DPW will enable our clients to tap into DPW’s capabilities and ecosystem and define their procurement future.”
The move comes after DPW welcomed over 1,250 procurement professionals to Amsterdam for its annual conference.
DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. It is one of the biggest and most influential tech events in procurement and supply chain.
CPOstrategy travels to the Netherlands to soak in the atmosphere of one of the world’s biggest and most influential tech events in procurement and supply chain – DPW Amsterdam 2023
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“You are the reason why DPW exists.
“It’s been my mission from day one to break procurement out of its silo and create what I call the end-to-end ecosystem and that is you.”
Digital Procurement World (DPW) Founder Matthias Gutzmann’s first address to the crowd gathered before the main stage had a clear tone of appreciation.
The rise of DPW Amsterdam
Today, DPW Amsterdam is one of the world’s biggest and most influential tech events in procurement and supply chain. Its exponential rise in a relatively short space of time is undeniable. Its story began with a frustrated Gutzmann having discovered a lack of procurement conferences to showcase his previous employer. This led to Gutzmann finding a gap in the market and set about solving the issue himself. He left his job in New York, moved into his parent’s house and invested all his savings to launch DPW. Months later, DPW’s launch conference in September 2019 welcomed 400 industry leaders while being praised from across procurement. Under the watch of Gutzmann and co-CEO Herman Knevel, DPW’s influence and pull has only grown since.
This year’s event was located at the historic former stock exchange building, the Beurs van Berlage. Built in 1896, the building breathes character and history. Its architecture and rich past, alongside its central Amsterdam location, showcases its sense of place and being.
Innovation
DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. This year, more than 1,250 procurement professionals gathered to connect, learn and innovate, while over 2,500 virtual attendees watched along at home. The buzz and hum of chatter was audible, the sense of excitement evident. And the attendees were certainly in for a treat. This year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. It was all centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results now instead of only concepts and theories.
Speakers across the two days included renowned experts and visionaries including the likes of Dr. Elouise Epstein, Partner at Kearney, Yossi Sheffi, Director of Massachusetts Institute of Technology and author David Rogers, among dozens more. Sarah Barnes-Humphrey led superb virtual coverage of the event and allowed those unable to make it to still feel a part of such an important conference in the procurement calendar. There were book signings from Sheffi and Atif Rafiq, eye-catching tech innovations showcased on stage and even an appearance from F1 legend and Haas Formula One team principal Guenther Steiner.
Digital future
To sum up, in comedian and host of DPW Amsterdam Andrew Moskos’ opening speech he reflected on procurement’s evolution and transformation. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk, and 80% of the spend of a company goes through us.”
Change is here and procurement holds the cards. Let’s Make Tech Work.
