How Vodafone is Using Data and AI to Cut Costs and Boost Procurement Transparency
Data forms the backbone of all modern industry and it gets put to work in a multitude of ways – from well-known applications such as targeted advertising and customer databases, to slightly more esoteric forms such as blockchain technology. Telecoms giant Vodafone is putting data to work to improve the way in which it processes purchase orders, empowering the company to be able to deliver effective marketing and better serve its customers.
Vodafone operates in 26 countries and has network partnerships with more than 49 others. It serves 470 million mobile customers, and a further 14 million fixed broadband customers. This means a whole lot of procurement is going on behind the scenes. From customer orders and business infrastructure, to internationally diverse and relevant marketing, Vodafone processes a staggering number of purchase orders each day.
800,000 purchase orders and five million invoices form the core of Vodafone’s procurement operation. However, Vodafone was concerned it lacked a desirable level of transparency in its procurement process execution and performance, and was looking for a way to use digital technology to investigate the matter.
A Cloud Based Platform
Vodafone has recently implemented a new cloud-based platform, the “Intelligent Business Cloud”, which aims to streamline operations through a technique called “Process Mining Technology”. The technology relies on AI and machine learning to extract existing data from an organisation’s IT systems to construct a visual representation of how processes perform. The overview allows managers to spot and amend inefficiencies.
Process mining treats each step of the procurement process as a digital footprint which is stored in a company’s operational systems. The technology seeks out and captures these footprints from the system and collates them into an event log, before organising them into a visual presentation which gives a fully-transparent overview of each step of the procurement process. The AI and machine learning then go to work analysing the results and identifying inefficiencies and other areas where the process can be improved. AI can spot issues in places where a human investigator may not even think to look and can recommend ways to improve the entire purchasing process.
By deploying the new platform, Vodafone was able to discover several variations and inefficiencies in its procurement processes throughout the organisation. After the AI went to work on the data, the issues were narrowed down to three likely sources.
A lack of automation in the purchase order processing system meant values were being entered manually, opening the door for human error, when auto populating software would be a simple thing to implement. Mistakes were also being made earlier than this due to incorrect source data, such as tax codes and payment terms. Compounding these two issues was a lack of best practice policy which meant individual buyers were singing from different hymn sheets.
Following the investigation, Vodafone implemented robotic process automation to reduce the possibility of human error when creating purchase orders and imputing source data. On top of this, it was able to establish best practice in its various procurement departments to make sure demand was bundled with desired vendors and more. Vodafone is now able to procure everything it needs to market and run its business faster and with greater accuracy than ever before.
Without a platform like Vodafone’s Intelligent Business Cloud, it can take 48 hours of human investigation to identify a single issue. However, with powerful software in its corner, Vodafone was able to complete analysis which would have taken two weeks’ of human work to complete.
As of September 2016, Vodafone had 470 million mobile and 14 million fixed broadband customers. The goods and services needed to sustain the thriving business come from all four corners of the earth, making procurement an intricate process. As a result, Vodafone relies heavily on process mining technology to help managers identify process gaps and deviations to hone a more efficient procurement process.
Big data, artificial intelligence, machine learning, and process transparency are all set to be hot topics at ProcureCon Marketing 2019, taking place in June at the Twickenham Stadium, London.
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