2023 GLOBAL SRM RESEARCH REPORT
INTERVIEW: MICHELLE BAKER
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In the matrix Baker recommends that
Michelle Baker is a fast-talking and passionate intellectual with a wealth of experience in sourcing technology. As a contemporary of Bill Gates, she’s seen the introduction of the Internet, PC, smartphone and social media. Baker, who stepped down as Head of Global Services at Thomson Reuters earlier this year to pursue advisory opportunities, has a wealth of experience across industries and a background in technology procurement. She was previously CPO at KPN; Global Director of Indirect Procurement at SABMiller prior; and leader in technology and outsourcing procurement at Rio Tinto before that.
Consider the evolution of email, she says. “It took around 30 years after the first networked message was sent from an individual via a PC line in 1969 to come into common use. This new tech is learning fast and we - through social media, lower cost and proliferation of computer power and the vast data storage capacity of the hyper-scale companies - have enabled it. We have helped to teach the machine everything we’ve been putting on the Internet.” This changing landscape provides both an opportunity and a threat for organisations and individuals. They must consider the market, labour and the changing landscape, and then attempt to meet it head-on.
procurement teams re-examine their supplier segmentation model and consider the risks - and opportunities - that AI presents to them and their suppliers in each of the four quadrants. “Everybody needs to redo the matrix with an ‘AI overlay’,” she says. “Get your team working on that for the entire supply base, right now,” she urges. “AI is the risk, so consider each supplier in turn and think about the possible impact it will have on them. And then decide if you should continue to source from them.”
“Bringing in suppliers early on engenders trust, and focuses their effort on helping you to achieve your goals, instead of what’s simply contained in their contract.”
“I started in procurement in 2001, so I’ve gone through the whole gamut of vendors trying to sell me a shed but calling it a cathedral to get me on the phone. I’ve had a lot of experience with exaggerated claims about what tech can do.” In some ways AI is no different - there will be a “whole load of vendors out there who will try to sell you lies” - but, she adds, “while there is a lot of hype, AI is a game changer”. “Put simply,” she adds, “it’s a new form of us being delivered services via tech. AI will transmogrify every paradigm we’ve lived with in the 20th, and start of the 21st, centuries.” Unlike other technological developments, which have taken time to evolve, AI learns at an incredibly rapid rate.
“The scary thing for humans is AI’s evolutionary capacity to absorb information. It is a massive disruptor and procurement departments need to act on it right away.” Earlier this year, research released by investment bank Goldman Sachs predicted that millions of jobs could be impacted by a new wave of AI systems. “Shifts in workflows triggered by these advances could expose the equivalent of 300 million full-time jobs to automation,” 1 it said. “As a supply leader in the extended ecosystem, if you’re not thinking about the supply chain of tomorrow and how you bring AI into the supply base, you probably won’t have a CPO role for long.”
As part of the function that delivers current services to their organisations, procurement must consider what it is it buys and what it needs to innovate. “You’re probably not going to find vast pockets of innovation in the industrialised supply base, so punching out into that bigger ecosystem to find AI-powered innovations for your industry sector is what you need to do.” However most leaders are not considering the impact of AI on their organisations’ products or services, she says.
“AI is a game changer”
Michelle Baker on why every procurement department should be redoing its supplier segmentation model with an ‘AI overlay’ right away.
1 https://www.goldmansachs.com/intelligence/pages/generative-ai-could-raise-global-gdp-by-7-percent.html
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