Procurement and the Internet of Things: New Digital Ecosystem

The evolution of internet of things and its impact on businesses

The Internet of Things (IoT) is being incorporated into our daily lives as the number of devices connected to the internet is rapidly growing. Based on Deloitte's definition, IoT is a "suite of technologies and associated business processes that imbues devices of all types with an ability to communicate information about their status to other systems, creating the opportunity to evaluate and act on this new source of information."

IoT devices (physical devices connected to the internet) share a huge amount of data. It is a powerful toolkit to increase analytics, collaboration, and engagement of different business sectors.

There are a lot of definitions of the Internet of Things varied by industries, types of systems, and usage cases. The nature of IoT is wide and diverse. That's why it's not possible to make an exhaustive list of all the technologies available. But here are some examples, include:

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Within the industrial segment, the IoT application revolves around automation and logistics. Energy suppliers use IoT solutions continuously monitoring the safety of remote production locations such as oil and gas fields. GPS systems and self-driven cars are examples of IoT approaches in the automobile industry. We at Freshcode have an experience of FloTron development, a multichannel control and monitoring system for manufacturing processes that uses a hardware device connected to a series of peripheral units.

There are a plenty of IoT benefits for households at our disposal, such as Google Home Voice Controller that is capable to set such features as alarms, lights, volume, media, thermostats through voice commands or Amazon Echo allowing users to manage media player, phone calls, to-do lists, smart home devices, and much more. And so on, every business area has varied ways to implement suitable IoT solutions in their infrastructure.We will talk more detail about the procurement stage, which is a universal example of a business process for most companies.

How advanced IoT analytics can improve procurement industry?

Against a backdrop of shifting global economic changes, there is a crucial need for businesses to analyze the changing role of analytics. Freshcode team has already worked with synchronization of instant access to real-time data updates within the SIAM development process (progressive web app), and normalization of data received retail platforms and inconsistency report generation in the context of Minerva project. And the emergence of new technologies drives new ways of big data analytics, interacting and conducting businesses.

IoT is about managing the data tsunami, that in the result is transforming into the ordered managed array. While engineers have been providing relatively simple operational technology (OT) analytics over the decades, big data movement toward artificial intelligence (AI) and machine learning (ML), is adding complexity and requiring advanced expertise. AI and ML can help spot problems before they emerge. For example, AI is able to identify persistent / repeated delivery delays or generate product quality reports.

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Businesses are using a spectrum of IoT-driven solutions along the entire procurement value chain: from sourcing to contract negotiations to order delivery. As companies are looking to extract more value out of IoT data, analytics is moving to the forefront. Advanced-analytics capabilities include:

• Surveillance of inventory for maintaining optimal stock levels
• Defining the corresponding total expected cost
• Providing important references for the suppliers
• Customer demand defining and forecasting
• Analyzing by specific attributes for more informed decisions
• Eliminating the illiquidity risk
• Smart metering management
• Advanced safety and security

IoT is providing data sets that contribute to improving awareness and efficiency of spend management and stock content. So procurement teams need to examine all the potential of data to make full use of the new tech.

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Supply management transformation via IoT tools

Legacy systems and inefficient processes are often the main reasons why businesses' strategic initiatives are slowing down. Within the procurement, a business can benefit from advancements in digital solutions a lot. It includes:

• transforming business cycles by automating a lot of routine tasks
• predicting the possible issues
• reducing overall risk
• achieving cost savings via intelligent sourcing

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According to Statista, the procurement software application market will bring in an estimated $5.59 billion in total revenue in 2020. The market is expected to expanse with a constant annual growth rate of 2.6 % in the coming years

Such software is used to assist the tasks associated with purchasing, receiving, and paying for goods. It is often defined under the general area of supply chain management (SCM) software, assisting in the control of products on all stages. Supply chain advanced by IoT toolkit is much more adaptable and agile to effectively respond to unexpected events. Here are the key benefits of the IoT-driven supply chain:

• Real-time location tracking
• Storage condition monitoring
• Locating goods in the warehouse
• Forecast the arrival of the product
• Improving contingency planning

It opens up new visibilities across the supply and offers insights into long-term tendencies that more superficial monitoring might miss. So digital supply chain approaches are able to shrink the source-to-settle process and reduce operating costs.

IoT tech is well on its way to transforming supply chain management. McKinsey analysts have predicted already in 2013 that the IoT tech along with cloud technology, intelligence software systems, and big data analytics will be economically engines that will transform the supply chain by 2020. So companies should take advantage of new digital benefits choosing both the universal solutions and unique approaches for their own specifications.

With increasing maturity in IoT adoption, entrepreneurs should aim to align the IoT strategy with their business goals. To succeed in digital procurement, you should examine the full scope of end-to-end IoT business solutions to streamline the source-to-settle process and ensure revenue growth. Freshcode is ready to help you become future-ready to meet the demands of ever-changing industries and drive positive business outcomes. Book a free consultation and make your idea happen!