A talking fridge used to be the stuff of sci-fi fantasy. Now we can hold a full conversation with our white goods and expect them to respond, along with our cars, Alexa, Siri, this app-powered Lego Batmobile and a host of other devices. This is all thanks to the Internet of Things (IoT).
IoT is connecting our world in ways that seem almost impossibly futuristic, with seven billion internet-enabled devices across the globe now able to record and transmit data.
It is also set to transform the procurement function, providing reams of data that can vastly improve knowledge and efficiency of spend management and catalogue content. But procurement teams need to know what to do with that data in order to make the most of the new technology, as this CIPS article points out, with individual procurement managers needed to “champion the cause and push their organisations to invest in long-term projects to utilise the technology.”
So what are the top 5 developments in IoT for 2019 and beyond, and what do they mean for Procurement?
1.Smart Cities. More and more cities are using smart technologies to manage infrastructures such as lighting, public transport, traffic controls. In Cambridge, smart technology has already enabled real-time bus information provided by sensors, traffic lights showing the number of cars crossing certain points, sensors for rubbish bins that gauge when they are full and need emptying, and real-time weather stations. These developments present a challenge to public procurement — it’s hard to know which technologies will stay the course and provide the best investment. Stay focused on what you want to achieve, rather than seeing tech as an end in itself, advises Dominique Bonte, VP of ABI research, while City of London Corporation commercial director Chris Bell says greater innovation and flexibility in public procurement will be needed.
2. Higher security. The more devices are connected to the internet, the greater the opportunity for cyber-criminals to hack & disrupt them, so organisations need to up their game on cyber-security. In the US 86% of local governments say they have experienced an IoT related security breach and In March 2018, a ransomware attack on the city of cost taxpayers almost $17 million. Supply chains are also at risk from the proliferating number of internet-connected devices. This year alone two thirds of companies reported a supply chain cyber attack, so more connectivity will only increase vulnerability.
3. Harnessing the power of blockchain and AI to make full use of the Internet of Things. On its own, IoT simply means that more devices are able to connect to the internet to supply and transmit data. Adding blockchain to the mix will enable Procurement and Supply Chain managers to verify interactions that take place along the internet-enabled supply chain. For example, tech company Modum has developed a solution called MODsense for pharmaceutical supply chains, to verify that shipped medicines have not been exposed to potentially damaging temperatures. It combines IoT sensors (which gather the temperature data), smart contract technology in the blockchain to verify the data, and machine learning algorithms. Similar innovations are enabling the tracking of everything from volatile crops in transit (hops being transported for brewing beer) to safety readings on railcars.
4. Digital twins. Data collected by sensors can now create a digital ‘twin’ — a virtual representation of objects, products and entire systems. This can now be applied to entire business and production processes, with a clear potential to benefit procurement and supply chain monitoring and management. Variables can be modelled, customer demand and logistics tracked, providing a far more responsive and far-reaching planning capability.
6.Satellite-powered cloud connectivity. Amazon has announced a partnership with Iridium Communications to develop a satellite-based network called CloudConnect for Internet of Things (IoT) applications. This will launch in 2019 and aims to cover ‘the whole planet’. It will initially focus on large-scale objects such as agricultural equipment or cargo ships, but will provide the capability for IoT on a massive scale — again, one to watch for supply chains.
These are exciting times for new technology and procurement. Individually all these technologies are powerful, but businesses need a cohesive strategy to make the full use of them.
Marcel Vollmer of SAP Ariba counsels businesses facing a new era of automated procurement to think carefully about how they can improve central business functions with new technology and re-envisage their business model in the long run – rather than simply upgrading part of the system.
What’s your view on these emerging technologies? Is your business ready to make the most of them? Are there any other huge innovations coming into Procurement and Supply Chain that we’ve missed?Let us know what you think. I’m on firstname.lastname@example.org.
(image by Bence Boros for Unsplash)
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