Saturday, June 15, 2019

How automation and intelligence blend with design innovation to enhance the experience of modern IT

The next BriefingsDirect Voice of the Innovator discussion focuses on how advances in design enhance the total experience for IT operators. Stay with us now as we hear about the general philosophy and modernization of design, and how new discrete best practices are making usability a key ingredient of modern hybrid IT systems.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

To learn more about the latest in IT innovations, we're joined by Bryan Jacquot, Vice President and Chief Design Officer at Hewlett Packard Enterprise (HPE). The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Bryan, what are the drivers requiring change and innovation when it comes to the design of IT systems?

Jacquot: If I go back 15 to 20 years, people were deeply steeped in their given technology, whether it happened to be servers, networking, or storage. They would spend a lot of time in training, get certified, and have a specialized role.

What we are seeing much more frequently now is, number one, the skill set of our people in IT is raising up to higher levels in the infrastructure. We are not so much concerned with the lower-level details. Instead, it’s about solving business needs and helping customers, usually in the lines of business (LOBs). IT must help their customers do things faster, because the pace and the speed of change in every business today continues to accelerate.

With design, we are attempting to understand and embrace our customers where they are, but also, we want to help enable them to achieve their business needs and deliver the IT services that their customers are requiring in a more efficient, agile, and responsive manner.

Gardner: Bryan, because the addressable audience is expanding beyond pure IT administrators, what needs to happen to design now that we have more people involved?

Know your user 

Jacquot: The first thing you have to do is know who your user is. If you don’t know that, then any design work is going to fall short. And now the design work that systems at IT companies are delivering is not only delivered toward IT but also different contingents within their businesses. It might be developers who are in a LOB trying to create the next service or business application that enables their business to be successful.

Again, if we look back, the CIO or leaders in IT in the past would have chosen a given platform, whether a database to standardize on or an application server. Nowadays, that’s not what happens. Instead, the LOBs have choices. If they want to consume an open source project or use a service that someone else created, they have that choice.
Now IT is in the position of having to provide a service that is on par, able to move quickly and efficiently, and meets the needs of developers and LOBs. And that’s why it’s so important for design to expand the users we are targeting.

IT can no longer just be the people who used to do the maintaining of IT infrastructure; it now includes a secondary set of users who are consuming the resources and ultimately becoming the decision-makers.

In fact, recent IDC research talks about IT budgets and who controls more of the budget. In the last year or two, the pendulum has swung to the point where the LOBs are controlling the majority of the spend, even if IT is ultimately the one procuring resources or assets. The decision-making has shifted over to LOBs in many companies. And so, it becomes more and more imperative for IT to have solutions in place to meet those needs.
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If we are going to serve that market as designers, we have to be aware of that, know who the ultimate users are, and make sure they are satisfied and able to do what they have to do to deliver what their businesses need.

Gardner: It wasn’t that long ago that IT was only competing with the previous version of whatever it is that they provided to their end users. But now, IT competes with the cloud offerings, Software as a service (SaaS) offerings, and open source solutions. You could also say that IT competes with the experience that consumers get in their homes, and so there are heightened expectations on usability.

Jacquot: Yes, it really has raised expectations, and that’s a good thing. IT is now looking around and saying, “Okay, for the LOBs we used to serve, it used to be, ‘Here is what you get, and don’t throw a fit.’” But that doesn’t really work anymore. Now IT has to provide business value to those LOBs, or they will vote with their dollars and choose something else.

Just as we’ve seen in the consumer space -- where things are getting more-and-more centered around the experience of the service -- that same thinking is moving into the enterprise. It raises what the enterprise traditionally does to a new level of the experience of what developers and LOBs really need. But the same could apply to researchers or other sets of users. These are the people trying to find the next cure for Alzheimer’s or enabling genetic testing of new medicines. These are not IT people -- they just need a simple infrastructure experience to run their experiments.

To do that they are going to choose a service that enables them to be as quick and efficient with their research as they possibly can be. It doesn’t matter for them if it’s in a big public cloud or if it’s in local IT -- as long as they are able to do it with the least amount of effort on their part. That’s a trend that we are certainly seeing. IT has to deliver services that meet the needs of those users where ever they are.

Gardner: Bryan, tell us about yourself. What does it take in terms of background, skills, and general understanding to be a Chief Design Officer in this new day and age, given these new requirements?

Drawn by design, to design 

Jacquot: There is a wide variety of backgrounds for people who have a similar title and role. In my particular case, I began as a software engineer; my undergraduate degree is in computer science. I began at HP working on the UNIX operating system (OS), down in the kernel of all things, about as far as you can get from where I am now.

One of the first projects I worked on at HP was deployment and OS installation mechanisms. We had gotten a bunch of errors and warnings during that process. I was just a kid out of college; I didn’t know what was going on. I kept asking questions: “Why do we have so many errors and warnings?” They were like, “Oh, that’s just the way it works.” I was like, “Well, why is that okay? Why are we doing it that way?”

The next OS release was the first one in ages that had no errors and warnings. I didn’t realize it at the time, but that’s where I started this passion for doing the right thing for the user and making sure that a user is able to understand what’s going on and how to be successful with their systems.
The next OS release was the first one in ages that had no errors and warnings. That's where I began this passion for doing the right thing for the user and making sure that a user is able to understand what is going on and how to be successful.

That progressed through the years, and I ended up continuing my passion for delivering on what our users’ needs are and how we can best enable them. Basically, that means not trying to jump too quickly to a solution, but first making sure that we understand the problems our users have. Then we can focus on innovating to deliver higher value to them, with a better understanding of what they need.

At that point, then I went back and earned my graduate degree in human-computer interaction with a focus on psychology, understanding human factors and how people think. That includes understanding how they use their working memory and how they process information, so we can build solutions that best align to how people naturally operate.

That’s one of the key things I found from my original background and then the most recent training. The best solutions we can build are the ones that fit as seamlessly as possible into the user’s hands, whether they are working with something digitally or physically.

For me, that was the combination that led to where I am now and being able to have successful delivery of various products and solutions -- offerings that are really focused on meeting the customers’ needs.

Agility arrives with speed 

Gardner: As an advocate for the user, and broadening the definition of who that user is when it comes to core IT services, what are the top challenges that those users now have? Are we dealing with complexity, with interfaces, and with logic? All the above? What are the latest problems that we are trying to solve?

Jacquot: It certainly can be both logic and complexity. Systems are getting more complex.

But, number one, from the customers I have talked to, the consistent overriding theme is they are under threat of being disrupted by somebody. And if they are not being disrupted by someone else, they are trying to disrupt themselves to prevent someone else from disrupting them. This is the case across all customers and across every industry.

And so, if they are in the mode where they have to be constantly pushing themselves -- pushing the boundaries and having to move fast -- then the overarching themes I am hearing about are speed and agility. That means removing as much work from what IT has to do as possible. Then they can focus their time and energy on the business problems, not on the IT scaffolding, foundation, and structure to support what they are trying to do.

Whether it’s in hospitals, where they are trying to deliver better patient care using medical records, or it’s in the finance industry, where they are trying to get the next trade done faster -- whatever the work happens to be, the focus is always about speed and agility.
And so, anything that we can build (application or user experience (UX)) for those users to help them be more efficient, are the things the drive the greatest degree of success.

Gardner: Given that design emphasis, it sounds a lot like the design of applications. But these aren’t necessarily applications. These are systems, platforms, and support products that may have even come together from mergers and acquisitions.

What’s the difference between designing an application, as a software developer, and designing an IT system or platform that often can come from the integration of multiple products?

Design to meet users’ needs 

Jacquot: I would argue that in the design process, the techniques, capabilities, and skills needed to solve the problems are actually the same, regardless of the type of product. The things that tend to change are who the users are and what they need. Those are the two key variables in the equation that are going to vary.

If you look at many of the startups out there today, they are delivering SaaS capabilities, whether it’s Uber and making transportation different, or Airbnb remaking the lodging experience to be simpler, easier, and more flexible. They are completely software based.

But there are also startups like Square, where they are making business transactions easier for startups. They also have hardware devices for enabling the card and chip readers for conducting transactions.

At the end of the day, the things that we build are just a byproduct of, “Okay, we have an understanding of the user. We know what we need to build to make them successful. Let’s figure out the right widget or gadget to meet that need.”

That can be a hardware system, like HPE Synergy, where we identified a need to be more flexible to compose and recompose IT resources on-demand. That platform didn’t exist two and a half years ago. If we could have done it only with software, we would have, but the software needed a new hardware platform to run on, so we created both.
These are all good examples of where we identified the business needs to make users more efficient. Now they no longer have to wait weeks or months to get access to a resource. With HPE Synergy they can access resources immediately.

Looking under the covers of Synergy, the HPE OneView platform and the Composer Card is what actually drives a lot of the innovation and makes composability possible, and it’s based on software. These are all good examples of where we identified the business needs to make users more efficient. Now they no longer have to wait weeks or months to get access to a resource, with HPE Synergy they can access and consume those resources immediately. That’s an example of an integrated system we have developed in order to deliver on a customer need.

Gardner: A lot of what goes on with composability and contextually aware applications nowadays uses data to develop inference, to anticipate the needs of a user, and provide them with the right information, not overload, so they can innovate and be creative.

How do you create a proper balance between context and overload? It seems to me that’s a very difficult sweet spot to get to.

Getting to know you, all about you

Jacquot: It definitely is. This is a challenge we have been attempting to address in my group for years. How do you get just the right amount of data without becoming overwhelming? That’s actually a really hard problem because it turns out our systems are incredibly complex. They have a lot of information. But knowing exactly what a given user is going to need at any point in time -- and not giving them anything more -- is a hard problem to solve.

As users are looking at screens, if you put too much information up there, then they can get overloaded. The visual search time that they will spend to find the information they care about, creates more chance of making an error.

Striking the right balance comes down to a couple of things. Number one, there is the initiative that folks in my group have begun driving that we talk about as Know Me, which means we know the user. What I mean by that is, not just that we understand the user, but when a user accesses our system, the system knows who they are; it knows them.
So, it knows the things that they tend to use more often. It knows the environment that they have, what constitutes the scale they are using, and what constitutes the depth of information they tend to go to. And using that along with machine learning (ML) to enhance the information we are providing them -- to make their experience richer -- is going to be the thing to pursue to make our systems even better.

And again, it’s not just knowing who they are. In the background, when we were designing the system, it’s more than just taking their preferences into account. I am talking about when they log in, the system knows it was “Dana”, for example, that once logged in. It knows that these are the things that are important to Dana, and it makes that experience richer because of that background and information we have.

Gardner: You have been doing this for a long time, and you have seen a lot of the psychology around innovation. But what have you personally learned about innovation? How do you even define innovation? It might be different than most other people.

Jacquot: Yes, it might be. In the places I have seen innovation the most, it is not like just having an epiphany. All of a sudden, I have the answer, it’s there in front of me, and we just need to go build it. I wish that were the case, but that doesn’t happen for me.

For me, it requires taking the time to understand the customer very well, as I mentioned earlier -- to the point of being able to empathize with them, where is the pain that they experience -- or the joy that they experience – it becomes something that I feel as well.

If you look at the definition of empathy, that’s what it means. It’s not just a fancy word of being empathetic and understanding. But it’s actually feeling the pain and the joy of the person you are empathizing with.

Once that is established, then comes the creativity, with the ability to explore ideas, try things, throw them out, and try again. You can start down that path to share ideas with your prospective users and get feedback on it.

First the mess, then the masterpiece 

I don’t get it right the first time. In fact, I expect to get a bunch of this wrong before I get it right.

If you were to do a Google search on “design” or “design thinking” and look at the pictures that come up, a lot of them look very orderly, and very orthodox. Depending on which one you see, you will ask some initial questions, do ideating and prototyping, and synthesis and gathering feedback, and so on.

But there is one thing that all those pictures miss; and that is as you are going through this process, and you get a better understanding, you take turns that you didn’t expect. You have to be willing to take those turns to get to the nugget of what’s possible, to get to the core of the potential of a solution you are innovating. So, it can get messy.
We don’t go in straight line. It’s curvy, it’s a squiggly line all over the place. We start by finding good places where things are resonating, and we continue to refine and iterate until we get to the point when we’ve got a foundation. Then we will go build and deliver on that -- and then the next squiggly, messy area starts up again in a continuous cycle that never ends.

Innovation looks messy and uncoordinated. It requires a lot of listening and understanding. And then the creative side comes in. We can brainstorm and explore. I really enjoy that side of it. But it has to start with understanding, and of not trying to be too rigid. [If you’re too rigid,] I think you would miss out on the opportunities that are there, but not as easy to spot.

Gardner: I love that idea of the journey from messiness to clarity and then productivity. Do you have any examples, Bryan, that would show a use-case that demonstrates that journey? Where at HPE have you made that journey?

Jacquot: I led the design team, and I was a chief technologist for HPE OneView during its early incubation, of getting it into a product and then releasing it to the market. There was one customer I remember specifically at a financial firm, and he was describing one of the tasks he had to do at 2 a.m. because that was the window in which he could make a change to the infrastructure without disrupting the business.
To hear him talk through that and knowing from the cognitive side that someone in that situation, if they are low on sleep, they are probably not very happy about being there, they are also going to be more prone to making errors. Their judgment is not going to be as clear. You put these factors together, and it was a miserable experience for him.

We went back and said, “Okay, we can make the system be able to perform these operations where it doesn’t require being offline and done in the middle of the night.”

That was an example of, through discovery of a pain point and hearing the things a customer is having to go through. As a result, we made a pretty dramatic change in the way we were addressing this issue for a particular user. But as we discussed it with other customers, he wasn’t the only one. This scenario wasn’t an anomaly; this was a pretty consistent thing.

Even though the clarity that he described in his situation was easy for us to grab a hold of, it was a common thing. The solution ended up being one of the key capabilities that we delivered as part of that platform, and it continues to expand today.

And that non-disruptive update feature was grounded in early-on research. It’s just one example of going from a squiggly to something that’s been very well-received.

Place process before products 

Another example came about differently, and with a different timescale, but it was also pretty impactful in HPE’s transformation. A few years ago, we were going through some separations, with the HPE software group and DXC, for example.

At the time, we didn’t have an offering in the hyperconverged infrastructure (HCI) market. HPE knew this was a place we needed to tackle. It was a big growth opportunity. So, a small team was put together to identify ways we could provide an HCI solution. And so, with the research we had done, we knew it was a better opportunity if we provided something that was simple and would appeal to the LOBs we talked about earlier.

Those LOBs might be a developer or a researcher, but they would want access to infrastructure quickly, without waiting for IT. They would want a self-service interface that enabled a simple way to get access to resources.

So, we started on this project. The senior leaders at the time gave us three months to build a solution. We rapidly took assets we had and began assembling them together into a good solution. It ultimately took us five months, not three, to introduce what was the HPE Hyper Converged 380 platform.
Now, if you go look on, that’s not a solution you are going to find today because we ultimately acquired SimpliVity, and that’s the product that is filling that need and that business area for us. The one that we made, the 380, was a short-term activity we did to get into the market.

Some of these projects that we engage in can include long research; we spend a couple of years understanding the users and refining, and prototyping and iterating. Other ones can be done on the shorter scale. You’ve got a few months to get something into market and start getting feedback, getting customers using it. Then you start iterating and driving from there, and that’s the one [HPE Hyper Converged 380 platform] was a really good example.

And we won several different innovation awards with that platform, even though it was created in a very tight timeline. The usability of it was really strong, and we got some good feedback as our entryway into the hyperconverged market.

Gardner: And other than awards, which are fantastic of course, what are some other metrics or indicators that you did it right? When people do design, and people use really good design, what do they get for it? How do you know it?

Get it right, true to your values 

Jacquot: Number one, it’s hugely important that if you aren’t getting business results, then something is wrong. If you design the right product and deliver it to the market, then good business results should follow.

The other part of it is we use various metrics internally. We are constantly following our products, and we can access the user success rates, the retention rates. If they are experiencing errors, we know what the ratios are. All those kinds of metrics and analytics are important, but those aren’t the number one thing that I would look at. The number one is the business results.

After a while, you can track things like brand loyalty, brand favorability, and net promoter score.

What I have been attracted to more-and-more recently, however, is the HPE values. We state that our mission is to improve the way people live and work. l will be honest, when we first started talking about that, I felt we were accomplishing a lot of great things but wasn’t exactly sure if they aligned to our mission.
We use various metrics internally. We are constantly following our products, and we can access the users' success rates, the retention rates. If they are experiencing errors, we know what the ratios are. But the number one metric is the business results.

Now, I look at how some of these examples are coming through, and what HPE customers are achieving – things like helping to combat human trafficking by finding pictures of people on the dark web and matching them with missing person cases using artificial intelligence (AI) and ML. There’s also the Alzheimer’s study and how we are enabling that massive study to try and find a cure for Alzheimer’s.

Those are some really positive things that are becoming metrics that I care a lot about. I love seeing those stories and being a part of the team and the company that’s making those things possible. Because ultimately, if we are going to spend our time and energy designing great solutions, the outcome should affect all of those areas including doing good for the world.

Gardner: In closing out, let’s look to the future. You mentioned AI. It seems to me that we’re trying to find another balance here in letting the machines do what they do best -- and then delegating to the people what they do best, which is what machines can’t do. Is part of what you see in your design role at HPE going down that path of finding that balance? How will AI impact the way products are used and people interact with them in the future?

Expand what’s humanly possible

Jacquot: So, the ethics of design, I think, is a really rich topic. That’s a discussion all of itself. But I think the question specifically around AI and ML, is that there are things that you look at that could be possible. Some have experimented by putting bots that watch traffic on Twitter, and they start responding. And they often degenerate to a pretty bad place.

The whole AI and ML field is one where ethics are involved and require putting the right guardrails in place. That’s something we as an industry and as a population are going to have to watch closely, because it’s clear that just by nature, not everything goes in a positive direction.

And I think we are trying to use it in a way to make the humans better in what we are doing and making us more efficient.
One example I like to use is the autonomous vehicle, which is interesting to me because if you look at it from a human behind the wheel, we can see straight ahead. Or we can look in the rear-view mirror or the side mirrors, but we can basically see in one direction with a little bit of peripheral vision.

We can hear things in auditory, we can hear in omni-direction, but our senses are limited. On the other hand, an autonomous vehicle can look in 360 degrees, it’s empowered with it, it can use things like ultrasound and infrared to detect beyond what humans can see at night, for example, seeing animals on the side roads.

AI and ML in a vehicle are much more capable, and they don’t fatigue, they don’t get distracted. They don’t get angry and don’t get road rage. So, there are a lot of benefits that we as the users of those vehicles can benefit from, as long as we put the right guardrails in place that will actually make humans better at what they are doing and safer than when we are actually in charge behind the wheel.

We will use ML and AI to empower our users, whether it be developers, or admin to see better what’s happening. I think a great example of that is what we are doing with HPE InfoSight.

When we are ingesting massive amounts of data from our system and then using that to make better predictions and ensure making things happen when it needs to happen and making sure that if there is something that’s going wrong – it can be detected and addressed before it even becomes a problem and impacts business continuity. And that’s just one of the ways that we are using AI and ML. But I would say the big overriding thing with AI and ML is using it in a way to augment what we can do and making sure that ethics are first and foremost considered because it’s clear, just left on their own, things could go in directions that we probably don’t want them to.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Hewlett Packard Enterprise.

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Thursday, June 13, 2019

How enterprises like McKesson digitize procurement and automate spend management to slash waste

The next BriefingsDirect intelligent enterprise innovations discussion explores new ways that leading enterprises like McKesson Corp. are digitizing procurement and automating spend management.

We'll now examine how new intelligence technologies and automation methods like robotic process automation (RPA) help global companies reduce inefficiencies, make employees happier, cut manual tasks, and streamline the entire source-to-pay process.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

To learn more about the role and impact of automation in business-to-business (B2B) finance, please welcome Michael Tokarz, Senior Director of Source to Pay Processes and Systems at McKesson, in Alpharetta, Georgia. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: There’s never been a better time to bring efficiency and intelligence to end-to-end, source-to-pay processes. What is it about the latest technologies and processes that provides a step-change improvement?

Tokarz: Our internal customers are asking us to move faster and engage deeper in our supplier conversations. By procuring intelligently, we are able to shift where resources are allocated so that we can better support our internal costumers.

Gardner: Is there a sense of urgency here? If you don't do this, and others do, is there a competitive disadvantage?

Tokarz: There's a strategic advantage to first-movers. It allows you to set the standard within an industry and provide greater feedback and value to your internal customers.

Gardner: There are some major trends driving this. As far as new automation and the use of artificial intelligence (AI), why are they so important?

The AI advantage 

Tokarz: AI is important for a couple of reasons. Number one, we want to process transactions as cost-effectively as we possibly can. Leveraging a “bot” to do that, versus a human, is strategically advantageous to us. It allows us to write protocols that process automatically without any human touch, which, in turn is extremely valuable to the organization.

AI also allows workers to change their value-quotient within the organization. You can go from someone doing manual processes to working at a much higher level for the organization. They now work on things that are change-driven and that bring much more value, which is really important to the organization.

Gardner: What do you mean by bots? Is that the same as robotic process automation (RPA), or they overlapping? What’s the relationship?

Tokarz: I consider them the same technology, RPA and bots. It’s essentially a computer algorithm that’s written to help process transactions that meet a certain set of circumstances.

Gardner: E-sourcing technology is also a big trend and an enabler these days. Why is it important to you, particularly across your supplier base?

Tokarz: E-sourcing helps us drive conversations internally in the organization. It forces the businesses to pause. Everyone's always in a hurry, and when they're in a hurry they want to get something published for the organization and out on the street. Having the e-sourcing tool forces people to think about what they really need from the marketplace and to structure it in a format so that they can actually go faster.

E-Sourcing, while you have to do a little bit of work on the front end, you enable the speed of the transaction on the back end because you have everything aligned from all of the suppliers in one central place, so that you can easily compare and make solid business decisions.

Gardner: Another important thing for large organizations like McKesson is the ability to extend and scale globally. Rather than region-by-region there is standardization. Why is that important?
Tokarz: First and foremost, getting to one technology across the board allows us to have a global standard. And what does a global standard mean? It doesn't mean that we're going to do the same things the same way in every country. But it gives us a common platform to build our processes on.

It gives us a way to unify our organization so that we can have more informed conversations within the organization. It becomes really important when you begin managing global relationships with large suppliers.

Gardner: Tell us about McKesson and your role within vendor operations and management.

Tokarz: McKesson is a global provider of healthcare solutions -- from pharmaceuticals to medical supplies to services. We’re mainly in the United States, Canada, and Europe.

I’m responsible for indirect sourcing here in the United States, but I also oversee the global implementations of solutions in Ireland, Europe, and Canada in the near future. Currently in the United States, we process about $1.6 billion in direct transactions. That’s more than 60,000 transactions on our SAP Ariba system. We also leverage other vendor management solutions to help us process our services transactions.

Gardner: A lot of people like you are interested in becoming touchless – of leveraging automation, streamlining processes, and using data to apply analytics and create virtuous adoption cycles. How might others benefit from your example of using bots and why that works well for you?

Bots increase business 

Tokarz: The first thing we did was leverage SAP Ariba Guided Buying. We also then reformatted our internal website to put Guided Buying forefront for all of our end users. We actually tag it for novice users because Guided Buying works similar to a tablet interface. It gives you smart icons that you can tap to begin and make decisions for your organization. It now drives purchasing behavior.

The next thing we did is push as much buying through catalogs and indirect spend that we possibly could. We've implemented enough catalogs in the United States that we now have 80 percent of our transactions fully automated through catalogs. It provides people really nice visual cues and point-and-click accessibility. Some of my end users tell me they can find what they need within three minutes, and then they can go about their day, which is really powerful. Instead of focusing on buying or purchasing, it allows them to do their jobs, their specialty, which brings more value to the organization.
We use the RPA and bot technology to take the entire organization to the next level. We're always striving to get to 90 touchless transactions. If we are at 80 percent, that means an additional 50 percent reduction in the touch transactions that we're currently processing, which is very significant.

The last thing we've done is taken it to the next level. We use the RPA and bot technology to take the entire organization to the next level. We’re always striving to get to 90 percent touchless transactions. If we are at 80 percent, that means an additional 50 percent reduction in the touch transactions that we’re currently processing, which is very significant.

That has allowed me to refocus some of my efforts with my business process outsourcing (BPO) providers where they’re not having to touch the transactions. I can have them instead focus on acquisitions, integrations, and doing different work that might have been at a cost increase. This all saves me money from an operations standpoint.

Gardner: And we all know how important user experience is -- and also adoption. Sometimes you can bring a horse to water and they don’t necessarily drink.

So it seems to me that there is a double-benefit here. If you have a good interface like Guided Buying, using that as a front end, that can improve user satisfaction and therefore adoption. But by also using bots and automation, you are taking away the rote, manual processes and thereby making life more exciting. Tell us about any cultural and human capital management benefits.

Smarts, speed, and singular focus 

Tokarz: It allows my procurement team to focus differently. Before they were focused on the transactions in the queue and how fast to get them processed, all to keep the internal customers happy. Now I have a bot that processes that three times a day, it looks at the queue, and so we don’t have to worry about those any more. The team is only watching the bot to make sure it isn’t kicking out any errors.

From an acquisition integration standpoint, when I need to add suppliers to the network I don’t have to go for a change request to my management team and request more money. I can operate within the original budget with my BPO providers. If there's another 300 suppliers that I need added to the network, for example, I can process them more effectively and efficiently.

Gardner: What have been some challenges with establishing the e-sourcing technology? What have you had to overcome to make e-sourcing more prevalent and to get as digital as possible?

Tokarz: Anytime I begin working on a project, I focus not only on the technology component, but also the process, organization, and policy components. I try to focus on all of them.

So first, we hired someone to manage the e-sourcing via an e-sourcing administrator role. It becomes really important. We have a single point of contact. Everyone knows where to go within the organization to make things happen as people learn the technology, and what the technology is actually capable of. Instead of having to train 50 people, I have one expert that can help guide them through the process.

From a policy standpoint, we've also taken the policies and dictated that. People are supposed to be leveraging the technology. We all know that not all policies are adhered to, but it sets the right framework for discussion internally. We can now go to a category manager and access the right technology to do the jobs better, faster, cheaper.

As a result, you have a more intriguing job versus doing administrative work, which ultimately leads to more value to the organization. They're acting more as a business consultant to our internal customers to drive value -- not just about price but on how to create value using innovations, new technology, and new solutions in the marketplace.

To me, it’s not just about the technology -- it’s about developing the ecosystem of the organization.

Gardner: Is there anything about Guided Buying and the added intelligence that helps with e-sourcing – of getting the right information to the right person in the right format at the right time?

Seamless satisfaction for employee

Tokarz: The beautiful thing about Guided Buying is it’s seamless. People don't know how the application works and that they are using SAP Ariba. It’s interesting. They see Guided Buying and they don't realize it's basically a looking glass into the architecture that is SAP Ariba behind the scenes.

That helps with transparency for them to understand what they are buying and get to it as quickly as possible. It allows them to process a transaction via a really nice, simple checkout screen. Everyone knows what it costs, and it just routes seamlessly across the organization.

Gardner: So what do you get when you do e-sourcing right? Are there any metrics or impacts that you can point to such as savings, efficiencies, employee satisfaction?
The biggest impact is employee satisfaction. Instead of having a category manager working in Microsoft Outlook, sending e-mails to 30 different suppliers on a particular event, they have a simple dashboard where they can combine all of the answers and push all of that information out seamlessly across all the participants.

Tokarz: The biggest impact is employee satisfaction. Instead of having a category manager working in Microsoft Outlook, sending e-mails to 30 different suppliers on a particular event, they have a simple dashboard where they can combine all of the answers, or questions, and develop all of the answers and push all of that information out seamlessly across all the participants. Instead of working administratively, they’re working strategically with internal customers. They are asking the hard questions about how to solve business problems at hand and creating value for the organization.

Gardner: Let's dig deeper into the need for extensibility for globalization. To me this includes seeking a balance between the best of centralized and the best of distributed. You can take advantage of regional particulars, but also leverage and exploit the repeatability and standard methods of centralization.

What have you been doing in procurement using SAP Ariba that helps get to that balance?

Global insights grow success 

Tokarz: We’re in the process of rolling out SAP Ariba globally. We have different regions, and they all have different requirements. What we've learned is that our EMEA region wants to do some things differently than we were doing them. It forces us to answer the question, “Why were we doing things the way we were doing them, and should we be changing? Are their insights valuable?”

We learned that their insights are valuable, whether it be the partners that they are working with, from an integration standpoint, or the people on the ground. They have valuable insights. We’re beginning to work with our Canadian colleagues as well, and they've done a tremendous amount of work around change management. We want to capitalize on that, and we want to leverage it. We want to learn so that we can be better here in the United States at how we implement our systems.

Gardner: Let’s look to the future. What would you like to see improved, not only in terms of the technology but the way the procurement is going? Do you see more AI, ML, and bots progressing in terms of their contribution to your success?

Tokarz: The bots’ technology is really interesting, and I think it's going to change pretty dramatically the way we work. It’s going to take a lot of the manual work that we do in processing transactions and it's going to alleviate that.
And it’s not just about the transactions. You can leverage the bot technology or RPA technology to do manual work and then just have people do the audit. You're eliminating three to five hours’ worth of work so that the workers can go focus their time on higher value-add.

For my organization, I’d like us to extend the utilization of the solutions that we currently own. I think we can do a better job of rolling out the technology broadly across the organization and leverage key features to make our business more powerful.

Gardner: We have been hearing quite a bit from SAP Ariba and SAP at-large about integrating more business applications and data sets to find process efficiencies across different types of spend and getting a better view of total spend. Does that fit into your future vision?

Tokarz: Yes, it does. Data is really important. It's a huge initiative at McKesson. We have teams that are specifically focused on data and integrating the data so that we can have meaningful information to make more broad decisions. They can be made not by, “Hey, I think I have the right knowledge.” Instead insights are based on the concrete details that guide you to making smart business decisions.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: SAP Ariba.

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