The present article describes how the Vodafone Procurement Company (VPC) has adopted Artificial Intelligence technology to boost its ability to perform “Design2Cost” and achieved significant cost optimisation as a result. The adoption of digital technologies including Artificial Intelligence allows the automation of activities performed routinely by humans. This positively impacts the efficiency of these individuals and allows them, in the best case, to focus on more value - adding activities. At the same time, such technologies can be used to augment the work of procurement professionals by allowing teams to deliver more value. Augmentation typically supports complex and collaborative activities that were not be systematically performed before.
HOW IT STARTED
The Vodafone Procurement Company was established in 2008 to serve as Vodafone’s centralised procurement hub. By 2017, VPC had reached a plateau in terms of maturity. Price negotiations were facing limits, leading the organisation to ask: What’s the next step? The company needed further opportunities to eliminate costs, but it also needed healthy suppliers who could invest in R&D. Procurement experts at Vodafone knew that they were most valued by their stakeholders when they were bringing not only savings, but also knowledge, facts, and options to the table. Knowledge on the design and on the detailed costs of the products and services provided by suppliers plays a key role here. All this led to the idea of further investing in the integration of cost analysis capabilities within the
