Sourcing and Procurement

Ignite AIoT - Technology and Resource Acquisition perspective

The acquisition of the required technologies and resources is probably one of the most critical parts for most AIoT projects. Many project leaders - and many procurement departments - don`t have a lot of experience in this space, which is why this part of Ignite AIoT is aiming to provide a structured approach to the problem, in combination with a set of useful templates.

The approach described here covers typical sourcing challenges, introduces the concept of the Sourcing BOM, helps defining vendor selection criteria, covers the RFP document creation and management, and finally looks at vendor selection.

AIoT Sourcing Challenges

An AIoT project often is a complex undertaking. On the business side, many different stakeholders must be aligned, often contradicting requirements must be managed, and existing business processes will have to be re-engineered. On the technology side, a multitude of new technologies and methodologies must be made to work together. In case of a line-fit solution, exiting or new manufacturing capabilities must be aligned with the needs of the AIoT solution. And finally, the solution roll-out and service operations must be prepared and managed.

So what can go wrong? A lot, especially if project management is not paying close attention to his digital supply chain. Selecting the wrong vendor or the wrong technology for all or parts of an AIoT solution can have ripple effects that put the entire project at danger. The same applies to over-specifying or under-specifying what is needed. Poor implementation services or badly defined SLAs (Service Level Agreements) can lead to bad user experience and stability problems. If these are only found out after the roll-out, this can put your business at danger.

RFPs (Request for Proposals) play an important role in many sourcing projects. Depending on the chosen sourcing strategy, a number of different RPFs will be required, especially if different technologies and resources will be acquired from different suppliers. One should not underestimate how sometimes unpredictable and difficult to manage RFP projects can be, and how often they are missing their deadlines. Carefully aligning the required RFP projects with your development plans will be a key success criteria for your project.