Procurement Through Internet of Things(IoT): The Reinvention of Digital Ecosystem
By Sanjay Puri, CEO, C1 India
In our last blog, we explored and learned about Robotic process automation and its applicability in the procurement process. Our today’s topic is Internet-of-things (IoT), lets learn more about this technology which has ushered a second age of the internet and how it will impact procurement.
Internet-of-things (IoT) refers to the seamless integration of physical-digital devices that are connected to the internet, all collecting and sharing data. The evolutionary, IoT technology encompasses not only computers but all the heterogeneous devices operating via internet connection. IoT is expected to initiate automation in almost all industries. It will also provide new opportunities to create leading-edge solutions through an eco-system of digital solutions, products, and services existing. Along with upgrading automation levels, IoT will improve the level of visibility for assessing and analyzing consumption patterns to derive meaningful insights for building targeted strategies. The data holds incomparable power in today’s time and problems associated with collection, dissemination, and analyzing the data will be addressed and improved by IoT.
In procurement, IoT can massively help in gathering insights on buyer behavior and preferences, information about the need for stocking requirements of buyers, mode of device used for purchasing, comparing prices/suppliers/material quality, and any other influential data sets that might require to boost business. IoT will present increased visibility in spend management, better catalog management, contract management, vendor relationship, and improved analytics. The type of detailed information IoT will help in gathering makes it a value proposition for the procurement industry as it would also help in personalization, customization, and automation. Let's explore further, how IoT can be evolutionary for procurement:
- IoT can significantly improve data collection methods and modes. An eco-system can be effectively used to derive meaningful insights. A broader view can help procurement professionals to identify various opportunities and target consumers as per their needs and preferences. The gathered data can help to improve analytics.
- The tracking and monitoring products/materials throughout the entire supply chain will improve due to the integration of IoT. Increased traceability will become a new compulsion by then, and IoT will help to address it completely.
- Analytics is the key to the success of any enterprise as it helps in indentifying new opportunities and influences better strategic decision-making. IoT will help procurement teams to gather information through various modes to generate meaningful insights that can be acted upon.
- The interconnectedness of physical devices that operate via internet, helps to expand visibility, perform in-depth and real-time analysis, increase efficiency, reduce costs/expenditure, and ultimately improves end-user experience.
- IoT enabled devices can help massively in identifying any equipment faults, halts, errors, and leakages in real-time for allowing repair and maintenance to be executed to address the shortcomings.
The width and depth of IoT’s effect on procurement are hard to measure and comment on since it may be a little too soon. The future is all about data collection and deriving meaningful insights. IoT will improve organizational efficiency, traceability, visibility, and increased savings. IoT requires infrastructure costs and those who’ll be ready to venture into it will turn out to be profitable, as different and valuable insights help any organization to successfully reach greater heights.