In this special guest feature, Martin Henley, SVP – Technology Services Sector at Globality, discusses how AI/ML can aid in business continuity across the supply chain. Henley and his team collaborate with customers to innovate through Artificial Intelligence and immediately unlock cost savings by revolutionizing their service procurement process to deliver better results across their technology-related service spend. He previously was managing director and group chief information officer at XL Catlin, a US-listed $15 billion revenue (re)insurance company.
IT service procurement is increasingly becoming a strategic fulcrum of corporate innovation, with AI and machine learning enabling that reality. These and other exciting technologies are positioning IT to assume a unique, high-value role, reinventing what’s often been regarded as an archaic yet necessary function.
The current global health crisis highlights the urgency of this renaissance. Although traditional and materials-focused supply chains have more historical experience in risk management and business continuity planning, the services supply chain has not previously seen this level of disruption on a global scale.
There are numerous new challenges for businesses trying to keep the lights on, including engaging reliable service suppliers that can meet specific needs at a rapid pace. Adopting AI-enhanced abilities for dynamically scoping projects, negotiating proposals, and sourcing complex IT services from new and existing suppliers are all necessary ways we can ensure we effectively serve our business partners and maintain operational continuity at this critical time.
Indeed, AI-based systems offer us a breadth of new possibilities. They can minimize or even eliminate business process steps that are out of sync with how consumers have come to experience commerce. They can automate procurement life cycles and workflows using intelligent matching capabilities and chat bots to process transactional requests. They can also utilize broader, richer, and deeper data sets for supplier matching, like historical delivery, performance, and sustainability criteria; this creates faster and better decision-making across stakeholders in areas such as risk analytics, price forecasting, and spend optimization.
The application of AI-driven systems creates a dual role for IT—as a consumer and as a service provider. In almost any business, IT is one of the largest purchasers of outside services. Those services are technically complex, often difficult to understand, and expensive. Maybe most importantly, it can be especially challenging to collaborate with nontechnical procurement teams on correctly scoping a requirement and qualifying a supplier’s level of capability or ability to meet it. The endlessly growing need for IT services makes their procurement the most logical and economically fruitful place to adopt a new and streamlined approach.
But CIOs can also use these new technologies to provide strategic value across their companies. Those on the business side will rely on IT for AI-enabled infrastructure that will let stakeholders source the services they need to stay focused in this time of rampant disruption, all while building their capabilities and operating models needed for the future—that includes everything from marketing services to legal and much more.
Buyers will be set up with a large network of vetted suppliers alongside those already engaged, creating a significant competitive advantage for enterprises under pressure to maintain operations and business continuity at scale. Powerful, new AI-driven systems let buyers act quickly for if and when new suppliers are needed, dynamically identifying supplier options; qualifying those best aligned to the requirement; receiving comprehensible bids; and engaging chosen suppliers quickly to deliver better results, sooner.
Machine learning then provides increasingly rich data over time, allowing customers to fine-tune scoping requirements, provide feedback, and rate the supplier experience, making future buyer–supplier matches ever more precise and productive.
On top of the practical business benefits, this type of approach creates a more inclusive global economy. A much greater network of global service suppliers now has exposure to opportunities that were previously out of reach, and multinational enterprises have access to a vast, untapped network of qualified, specialty firms and services. AI-enabled processes allow detailed scoping; faster and more efficient responses; and comprehensive, side-by-side comparisons of proposals. All this levels the playing field and allows service suppliers large and small, near and far, to offer their expert, bespoke solutions to highly strategic, high-value enterprise needs.
For both dealing with the existing crisis and positioning the long-minded, strategic benefits needed in IT service sourcing, AI and machine learning can help CIOs identify the best service suppliers for their own immediate needs while building capability so the entire company is better prepared for the future. This means that, both for regular business when it resumes and through other periods of disruption that are likely yet to come, your teams will be prepared. This unique moment represents a turning point for IT to step up and provide leadership and solutions—the contribution CIOs have long waited to make. It’s time to change the way the game is played.
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$15 billion was close to the purchase price that was paid by AXA for XL Catlin. The market cap was $12 billion. The revenue was not anywhere close to that level (obviously!).