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Ashok Pai
Vice President & Global Head, Cognitive Business Operations
12 July 2019

Today, diverse and complex business requirements demand that procurement moves beyond being a cost influencer and become a growth contributor as well. In most enterprises, CFOs hold responsibility for the procurement function. Amongst other priorities, they are expected to handle rising procurement costs, minimize risks, decrease lead time, drive supplier collaboration, enhance spend visibility, and optimize working capital. 

CFOs and procurement departments of enterprises that aim to deliver more strategic value and influence growth, look towards next-gen technologies. While automation and analytics enhance the efficiency of procurement processes, cognitive/artificial intelligence solutions in procurement elevate the function to the next level. They help to generate supplier intelligence, perform contract analysis, prevent fraud and duplicate payment and enhance buyer decision-making. In short, cognitive procurement enables exception management, where normally, human intervention is required. A cognitive solution can embed the brain within the process, which could learn over a period and manage exceptions independently of human intervention. Few examples of digital procurement are smart sourcing, intelligent purchase agents, proactive vendor management, and touchless invoice processing. 

Cognitive Adoption: Negotiating the Learning Curve 

Despite its outcome-oriented approach that delivers significant business impact, a cognitive procurement strategy is fraught with the following challenges: 

Limited data availability and bad quality data 

Cognitive procurement solutions require to learn from existing, well structured, and integrated process data. Most process data are not captured in enterprises and what is captured reside in siloes or exist as unstructured data. 

Solution: Enterprises need to invest in data capture and integration as well as in data enrichment and ingestion technologies and experts. 

Lack of standardized procurement processes 

A procurement process that may vary across geographies or categories or that require frequent tweaks is not suitable for cognitive transformation. 

Solution: CFOs should first invest in standardizing and centralizing such non-standardized procurement processes before earmarking them for cognitive transformation. 

Lack of talent and change management limitations 

Cognitive implementation requires data scientists or cognitive experts, coders, developers, supply chain, finance, and regulatory specialists to collaboratively work together. CFOs face difficulties in hiring and retaining data scientists, which being a niche skill, has a high demand-supply gap. Also, cognitive implementation calls for key enterprise-level people-related changes such as role reclassification, cross-functional collaboration, operating model, and KPI changes. 

Solution: CFOs can overcome these people related challenges by seeking support from global service providers. Such partnerships will also assist in change management by addressing issues in a timely and proactive manner. 

Legacy systems and lack of robust solutions 

Procurement functions going through a cognitive transition, face technology challenges in integrating cognitive solutions with existing systems, thereby adversely impacting their ROI. Secondly, off the shelf products in the market do not have robust functionalities or lack in partner support and servicing. 

Solution: Agile cognitive solutions that can adapt to an enterprise’s technology landscape is the need of the hour. Strategic service providers that have the necessary skills and partnerships with product vendors can enable the integration of agile cognitive solutions with the existing IT infrastructure of an enterprise. 

Lack of credible references 

Enterprises look to existing implementations to understand best practices and lessons learned while assessing the choice of cognitive transition. 

Solution: Service providers that enabled such implementations across multiple industries and functions can bring to the table a much-needed outside-in perspective. 

Best practices for cognitive adoption 

Cognitive implementation is a transformative journey and not just a lift and shift approach. CFOs seeking out a strategic partner who can bring in the following best practices are sure to find success in their cognitive adoption journey. 

  • Plan the cognitive deployment approach 

Ensure the move to cognitive transformation has buy-in from all key stakeholders. Plan the adoption roadmap with experienced partners before setting out to invest and start implementing. Start small and based on the success of the pilot project, move on to transforming complex processes. 

  • Have a data management strategy 

Define a clear data management strategy for cognitive adoption. Start small and with relatively mature sources such as spend and invoice data. Build the required computing infrastructure to process massive volumes of data. Identify and capture data from all sources into a common platform with defined security levels. 

  • Invest wisely in technology 

Identify and leverage appropriate off the shelf third party solutions and procurement service providers to lower upfront investment, minimize talent challenges, and ensure agile cognitive implementation. 

  • Develop future ready talent 

Besides recruitment and training of employees with specific data management and cognitive skills, CFOs also have the onus to upskill and reskill the procurement team. The existing team will have to move from transactional to managing more strategic and judgment-oriented processes. Where possible, the current team must be reskilled to take on other complex areas of work within the function. 

As CFOs and their procurement functions embrace strategic imperatives such as exponential business value and risk management, they need to start their cognitive adoption journey. Pioneers that have leveraged strategic procurement service partners are seeing early success in their cognitive transformation journey. 

About the author(s)
Ashok Pai
Vice President & Global Head, Cognitive Business Operations

Ashok Pai is Vice President & Global Head, Cognitive Business Operations (CBO) at Tata Consultancy Services (TCS). In this role, Ashok oversees TCS CBO, which integrates Business Process Services and IT Infrastructure Services, using cognitive technologies that deliver a high degree of efficiency, agility and intelligence to enable enterprises to reimagine business operations and make an impact on their top and bottom line.

In the world of Business 4.0, where enterprises must deliver superior business outcomes to grow at an accelerated pace, he leads efforts to transform business operations into a strategic differentiator through automation, intelligent processes, contextual insights, and cutting-edge IT infrastructure.

Drawing on over 25 years of industry experience, Ashok has played a pivotal role in helping enterprises transform for the digital economy. Prior to this role, he headed TCS’ Business Process Services (BPS) and was responsible for more than 400 customers in North America, Asia Pacific, and other regions. Ashok was closely involved in pioneering initiatives like setting up the “All Women BPS” Center (a Joint Venture with GE) in Riyadh, Saudi Arabia.

Ashok currently resides in Mumbai with his wife and daughter. Outside of work, Ashok enjoys reading, travelling, photography, cricket and Indian movies. Ashok is passionate about long distance running and has completed New York, Amsterdam, Mumbai and London marathons. Ashok earned his Masters from IIT Mumbai and is a Certified Six Sigma Black Belt.