What Does Augmented Reality Mean for the Sourcing Organization?

Augmented reality (AR), or mixed reality, is a technology every sourcing professional should understand. It may seem tangential, but forward-thinking executives will take heed as AR will become more and more prevalent in the sourcing industry. AR differs from virtual reality in that virtual reality is a total replacement of your current reality. Augmented reality can be thought of as a digital addition, or supplement, to your current reality. A perfect example is the Snapchat face filters - which overlay illustrations on digital images, specifically faces. My Snapchat buddies send me pictures of their faces with doggie ears attached and so on. Another example is the app Pokémon Go, in which participants found digital creatures in the everyday settings of their reality - places like the park, campus, restaurants and so on. Augmented reality is a technology that can provide packaged experiences that feel real. There are two major types of applications of AR in the market today, consumer and business/industrial.

You are probably familiar with Snapchat filters and Pokémon Go, but what about the augmented reality app that helps you decide where you might place new furniture in an existing room like Ikea offers? Or how about an AR app that allows you to point your device to the night sky and interact with the stars? Or an app that helps healthcare workers find the most appropriate place to insert an IV?

Sourcing professionals tasked with managing MRO, engineering or construction spend, should learn more about how Thyssenkrupp uses AR to assist their elevator repair specialists or how AR solutions from Vuforia allow operators, technicians and maintenance specialists to scan a part and receive an overview on how the part interacts with other parts. This way they can appreciate the complexity and dependencies that may occur before they leave for the job. The Atheer AiR Suite allows desk-less professionals to communicate with experts remotely for quick and efficient problem solving.

How sourcing professionals may specifically implement AR as a solution is outlined in this GEP article in which the author describes the reality of a common purchasing practice enhanced through AR technology, specifically, picking an item to purchase from a catalog. Instead of the user turning a printed page in a catalog or scrolling a website for an ink pen, AR technology would bring the "catalog to life" and allow the user to hold the pen in their hand before making the purchase. The authors also discuss the potential for using augmented reality to create efficiencies in proposal evaluations - removing cost and other barriers like travel, materials handling or insurance issues.

According to one report, 67% of enterprises surveyed are considering adopting AR in simulation exercises, training and product usage. This is a huge opportunity for quality improvement, cost avoidance and risk mitigation. In one study of AR for training, researchers asked students of different ages and genders to complete an assembly project. According to the study, "The testers found that the group using the AR instructions experienced a 90% reduction in the number of errors during the assembly when compared to the group using instructions on the desktop computer. The time to build...was also reduced by about 35%."

Every company struggles with the costs of classroom training. Every sourcing team struggles with dispelling myths about auctions and promoting them as a strategy for collecting bid pricing and proposals. Here is another opportunity for using augmented reality to increase adoption rates for auctions but decrease costs typically associated with training - all while having a fun time wearing the latest technology. The sourcing organization can score two wins - saving money and showcasing their expertise.

At the upcoming SIG Global Summit, we will host a keynote session on the application of augmented reality in the enterprise, specifically how the sourcing organization can implement AR for training purposes. In this proof of concept overview, a SIG buy-side member along with Avasant and HCL, will walk attendees through the journey of outlining a need, building a team, designing a solution and presenting the concept of using AR to train both sourcing professionals and business stakeholders. The presenters will discuss the importance of stakeholder contributions and executive buy-in when creating an AR experience that provides wearers an opportunity to participate first-hand in an auction sourcing event. During the keynote, the audience will get a sneak peek at the process.

Afterward, Summit attendees can don the HoloLens in the SIG Global Summit Tech Lounge. The digitally enhanced experience will give them a first-hand opportunity to learn about augmented reality by showcasing the excitement that results from collecting pricing during an auction. Wearers will be able to view auction details, bidding activity and the final analysis. It will be an incredible event.

We invite you to contact us with your augmented reality projects. We are interested in hearing about opportunities where you are building experiences in-house and those in which your selected provider is using augmented reality to deliver goods or services. Augmented reality is providing a new reality for all of us.


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Mary Zampino, Senior Director of Global Sourcing Intelligence, SIG

Mary Zampino is the Senior Director of Global Sourcing Intelligence at SIG and has over 20 years of experience in information technology and over 15 years of experience in sourcing. Prior to joining SIG, Mary worked at Enporion, where she was responsible for the analysis, configuration, execution and award evaluation for over one thousand sourcing events, across a diverse range of direct and indirect categories. Mary is committed to customer service and considers information sharing and usability the top priorities for any project or organization. Mary holds a Bachelor's Degree in Information Science from the Florida State University and has completed certifications in Health Information Technology and Requirements Gathering.