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The benefits of AI-powered technology

16 September, 2022 | By DPW

Gregor Stühler‘s experience in the automotive and tech industries combined with his experience in sourcing industrial components has provided him with a strong base knowledge of strategic procurement. His passion for tech-enabled procurement has propelled Scoutbee to the forefront of the sourcing market. Scoutbee’s customers include Audi, Siemens, Unilever and Linde.

Interview with Gregor Stühler, Co-founder and CEO of Scoutbee, the AI-powered Supplier Intelligence and Discovery SaaS Platform.

What barriers do procurement teams currently face?  

Gregor: Scoutbee was founded in 2015 and since then we’ve experienced many global crises. From the pandemic, to the trade war between the US and China, to the war in Ukraine, it doesn’t stop. It feels like the overall tasks of procurement have changed significantly, and not everyone in procurement is ready for that. One of the biggest barriers is agility and the ability to work with a changing data environment, when it comes to gaining strategic insights. In a perfect world, when the pandemic hit in 2019, the procurement leader would have sat there and said ‘okay, let’s bring in the World Health Organization (WHO) data to our supply base and make sure that the suppliers who are going into a lockdown soon are prepared for that’. But there was never a calm and collected set-up where they had all the data at hand. As a result, they couldn’t make those strategic decisions. 

This barrier is manifold, of course. It also extends to the question of whether you have the right people to deal with the problem too.  And do you have the right technical solutions and the set-up to tackle it as well? Today, procurement doesn’t.  

What role does digital transformation play in helping procurement leaders overcome such gaps in their supply base? 

Gregor: Digital transformation is just transformation; you can strike out the digital. The ecosystem now changes faster than ever, and with better access to data and better access to suppliers, you have to adjust your competitiveness. That’s where everything comes down, in my mind, to resilience. And I would like to re-coin resilience a little bit differently. Resilience is often referred to as some kind of disaster response or disaster forensic assessment. But, for me, resilience is purely how competitive you are in different situations.  

Could you give me an overview of the maturity landscape when it comes to technology adoption in procurement? 

Gregor: When it comes to reacting to a changing environment – companies in general have to be smarter and faster. When you think of how procurement decisions are formed, it has nothing to do with downstream, it’s all upstream. Upstream means data, analytics, insight, strategic supplier selection – those are the four key areas. But when we look at where most of the investment goes in digital transformation, it’s mostly about downstream. You’re looking at contracts to pay, purchase to pay,  and solutions that are mostly designed for the downsizing of your procurement team. In the current environment this doesn’t help you at all. What you have to have is a very strong focus on upstream, which helps you to quickly identify changes in the market. Ideally, you don’t want organisations to react but be proactive. You want to be able to spot certain weak links in the supply chain and work on those. In this context, procurement is lacking tech prowess. To date, few procurement organizations are actually using digital technologies anywhere near optimally.

It goes without saying that now, more than ever before, procurement leaders are having to be increasingly dynamic in the way they work with suppliers. Can you tell us a bit more about the value that SCOUTBEE’s Supplier Intelligence brings to the table? 

Gregor: You can see us as a strategic investment into the future, a flexible partner for all your procurement needs. We are able to represent all the data points from your different systems and connect you to third party data, to web crawling data, to supplier data in order to help you to tackle any strategic procurement challenge you may be facing with regards to data insights.   

A bit more detail on that (as opposed to details). The foundation of our solution is built on supplier data. The data can be provided by our customers, our data partners focused on a particular part of the data like sustainability, risk, or diversity, or by our own AI-powered crawlers that discover new sources of information from the internet. This data goes into a knowledge graph that’s essentially a representation of all of the data points that we have gathered. This allows us to apply our AI algorithms to refine, process, and combine the information and present our customers with a 360-view of their supplier base so they can gain insights into what actions they might need to take. For instance, if they have goals around sustainability and diversity, we give them insights into which suppliers they should be working with and which suppliers they might consider phasing out. That’s what we provide through our Supplier Intelligence solution and then, we also have the same set of data being used to actively discover new suppliers.

AI is adding a lot of value. What we’re using AI for is having a much faster way to matching different supplier records. We’re using AI to make sure those data points are securely connected.

Gregor Stühler is the Co-founder and CEO of Scoutbee

You’ve talked a lot about that so far. Data has been getting some bad press lately. Can we do these transformational changes without data? 

Gregor: Data is the absolute core of any future-proof business model. I do not think you can differentiate yourself in the market anymore by simply optimising your operations. If you want to be strategically relevant inside and outside of your company, if you want to make smarter decisions that have the right impact, then it’s all about data, and it’s all about insights.  

What are the benefits of AI-powered technology? What value does it add? 

Gregor: AI is adding a lot of value. We’re using AI to enable a much faster way of matching different supplier records. We’re also utilising AI to ensure those data points are securely connected. After that, you want to give the system more autonomy. For example, you can use AI to work out which suppliers should be given (or removed from having) preferred status. In that instance, AI can improve the quality of your decision making quite dramatically. Humans can extract three to four dimensions, but as soon as it’s more than that, it becomes an Excel spreadsheet. We use AI to augment the procurement experience.

Now, let’s move on to some of the hottest topics in procurement. We’re witnessing a growing trend of corporations, consumers and investors wanting to do right by our planet. Would you agree with this statement? If so, how can strategic sourcing drive greater sustainability? 

Gregor: ESG is a strategic sourcing task and strategic procurement has the responsibility to drive ESG goals and actually make an impact – first for profit but also for the people and the planet. When it comes to the role of technology in there, what we see right now is that ESG is a very fast-moving target. It started off with CO2 and then drifted into conflict minerals and child labour. It’s very complex and what we see in the market are hundreds of different solutions emerging to support the customer in a very narrow vertical. Scoutbee is helping to aggregate all those different systems and ensures that you’re not simultaneously running 20 or 30 very expensive data and system integration projects. You’re then able to combine these insights and drive much deeper value.  

That begs the question: Why is it important to put suppliers at the center of strategy? 

Gregor: Suppliers are at the core of delivering on your ESG targets or, in fact, on any of your strategic targets. You have to invest in identifying not just the best suppliers around the globe, but also the suppliers within your supply base that are worth investing more in. For many companies, suppliers are a differentiator, particularly when it comes to delivering on ESG goals. When you look at our solutions, then the supplier profile is absolutely everything. We aggregate everything about them so you have everything you need to know in one single profile.   

For instance, external information providers may provide enrichment for financial resilience metrics, such as Moody’s or Dun & Bradstreet, or diversity ratings such as supplier.io. In addition to that, by using big data and web crawling capabilities, we are presenting publicly available – but very difficult to acquire – content and intelligence regarding suppliers, to identify, extract, consolidate, merge, clean and align to an individual supplier record so you get, for once, a true 360-view of a supplier on a page. Using the power of Machine Learning algorithms over our Knowledge Graph data foundation allows us to understand extremely complex relationships and provide unique insights from seemingly unconnected data points. That’s really our whole mission.

What have you prepared for DPW Amsterdam 2022 this year? 

Gregor: Given our current role in the ESG, sustainability and diversity and data space, we could not be prouder to be a Platinum Sponsor for DPW Amsterdam 2022. We have a stellar panel that includes representatives from both our customers Unilever and Siemens Energy where we’ll be diving deeply into how Big Data can solve the current challenges faced by procurement leaders. We will also have a comprehensive roundtable discussion, again focusing on how data and insights can help you deliver on your corporate goals in general, but with a strong focus on ESG and resilience. I welcome everyone to join us on stage or swing by our booth (booth number 1) to learn about how you can simplify your procurement processes with Scoutbee. 

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