Pune: Digitisation and automation are major trends changing the business of procurement, said Paul Harlington, the Group Procurement Director for TUI, the world’s number one tourism business company. Paul was recently in Pune after the company won the global sourcing award in Capetown along with its partner Dataction Analytics in October, last year. Speaking about the changes in the procurement field Paul said that earlier the expenditure on IT services would be considered as indirect procurement but currently it is not so.
“Digitisation is changing the business rapidly and spending on IT services is essential which is adding value to the business. Apart from your traditional direct procurement which would include buying planes and hotels in our business spending on IT has also become essential,” he added.
Speaking on other trends which are changing the business Paul said that data analytics, artificial intelligence, automation techniques are bringing rapid changes in procurement business.
“With the use of IT, there is a lot of data coming into the picture. It has also triggered the issue of the General Data Protection Regulation (GDPR) in Europe. While the procurement business is yet to be impacted by GDPR rules it will soon be impacted in sub contracting business. As customers understand the value of data, the procurement business will also have to handle customer data efficiently.
Similarly, functionalities like finance and accounts can be automated along with purchasing modules.” added Paul. He also highlighted that although the use of artificial intelligence(AI) in procurement is at its initial stage it would take about five years for AI to be used on a large scale in the procurement business. “AI helps in many ways, for instance, it can help you in looking for the best price of service but there are instances when AI have gone wrong. So the use of machine learning and AI will take time to be adopted in the business,” he added.
Speaking about the offshoring of services in procurement business Paul said that with the expansion of information technology work location has become irrelevant.