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    The Impact of Virtual and Augmented Reality on Procurement

    April 12, 2016 | Procurement Software

    When Palmer Luckey, founder of Virtual Reality (VR) firm Oculus, recently hand delivered the first Rift headset to a customer, he may have well presented the world with what could become one of its greatest advancements in technology. An 18 year old Luckey created the initial prototype in 2011, merely to make gaming a more realistic and immersive experience. Today, that device has evolved into a full-fledged consumer wearable which allows users to experience diverse virtual realities.

    In the spring of 2011, Tesco PLC experimented with Augmented Reality (AR) in South Korea by creating virtual retail stores that blended into people’s everyday lives. Rich, lifelike images of merchandise were plastered across the walls of subway stations, laid out in the same way as they would be in the store. The model was simple - scan the product’s QR code with your phone and it’s automatically added to your online cart. When the purchase is done, you can decide when you want it delivered. The strategy proved successful as online sales rose by 130% in three months without an increase in the number of physical stores.

    What do these two stories have in common? In a nutshell, they both made early inroads into building applications around technology which most certainly will transform the way we work, think and perceive the world. And while the hype surrounding these offerings may seem slightly unfounded to some, envisioning the disruptive potential of their underlying technologies on contemporary business processes is nevertheless enthralling.

    Why the Fuss?

    VR enables users to interact with graphically constructed environments like never before. It’s something that effectively allows you to enter a screen and live in virtually generated surroundings. In contrast, AR superimposes digital information on a user’s view of the real world, effectively resulting in the coalescence of artificial and actual existence. What they share is the ability to employ technology in pioneering ways through applications which could deliver unprecedented experiences and resourcefulness.

    Seems a tad like ‘Total Recall’, too implausible to be realized anytime soon? Think again!     

    Take VR simulations for instance - Using VR headsets, construction workers can receive training for dangerous real-world tasks without the concern of an actual hazard occurring. While performing technical repair activities, specialists sitting miles away can see what field representatives see and provide support instantly. With advanced augmented solutions, jet pilots can remotely control aircrafts without having to risk their lives in combat. The possibilities are boundless as all these things no longer seem like science fiction and are easily conceivable within the next decade. Basically, it’s time to stop taking it with a pinch of salt.

    Reimagining Business in the VR & AR World

    Given the very serious prospect and impending influx of VR and AR solutions in the market, companies across industry verticals must begin to envisage how their fundamental business operations might change as this technology is adopted at an enterprise level. Several firms are already developing interactive samples of their offerings to let potential customers explore them virtually. The procurement business is probably no exception.

    Core to Procurement’s success in the years to come – in a world of increasing automation and AI systems driving decision making – will be the ability for humans to remain relevant. Thus, we will need to be integral to the automated or semi-automated process in a way that makes best use of human intelligence but doesn’t interrupt or stall the process flow.

    VR and AR promise to do what has never been done: Supplant basic human interactions. This means that a virtual meeting of people could be just as effective an experience as a face-to-face one. So whether it’s everyday business meetings or high profile client visits, the need to be physically present may become unnecessary because people will have that same level of human nuance without having to invest money and time. In general, we can all breathe a sigh of relief and expect business travel to reduce!

    This, too, is an area of opportunity for procurement software providers, who may work to redefine the Procure-to-Pay process in tandem with advancements in AR and VR technology. If ease of access, convenience and experience are important aspects of user interface today, they take on a whole new meaning in the world of VR & AR where complex sensing replaces mere seeing or hearing. Consider, for example, users browsing for a product or service via a digital catalog or an e-tailer website, using an AR/VR enabled hardware system. Instead of making a purchase decision simply based on viewing the product or reading about a service, they can actually experience a lifelike demo to gauge its value.

    Visualization of complex procurement landscapes could be massively enhanced with VR business intelligence tools. Searching for opportunities in a 3D landscape could be much more effective than on a 2D graph. Similarly approvals, workflow routing and sign-offs could be accelerated if the requests for action appear in the user’s environment. Perhaps the desktop of the future will be fully virtual and overlaid on top of wherever we happen to be. Items for our attention might appear to arrive and leave in real time in our field of vision.

    Negotiating with suppliers, bidding in auctions, signing contracts and similar activities could all take on a new perspective. Likewise, assessing qualitative responses to RFP could be made easier with immersive, experiential engagement by the buyer. Imagine an RFP containing a technical specification being returned as a bid with a design that could be visualized in full VR in the bid-assessment process. Also in the same way as the “shoppers” in Tesco’s virtual store, the buyer could “visit” the supplier operation and assess it for themselves.

    GEP’s commitment to user experience has made the company’s software offering a dominant player across many key industry circles and will be critical in this regard. Having already established a consumer-like purchasing platform which improves compliance and reduces cycle times, GEP SMARTTM continues to innovate and is on course to capitalize on this fast approaching, trendsetting shift.  

    Endnotes:

    1.    http://www.travbuddy.com/travel-blogs/96909/Smart-Phone-Enabled-Virtual-Grocery-9

    2.    http://dupress.com/articles/augmented-and-virtual-reality/

     

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