AI adoption unveils hidden value in procurement
New technologies in procurement are changing the equation by offering innovative prospects for businesses to forecast and respond more efficiently to consumer demands. Companies that adopt new digital tools and technologies not only save money and time on procurement but also simplify their operations.
Amongst the leading trend is Artificial intelligence in procurement. It has provided a more modern, more effective, and intelligent technique of streamlining business processes.
According to Gartner, basic machine learning technology – a subset of AI that utilizes statistical techniques to give computers the ability to learn is already used by some procurement applications in areas such as spend analytics and contract analytics.
Benefits of AI in Procurement
Listed below are the benefits of AI transforming procurement models and helping buyers work smarter, better and faster in the future:
Greater automation of procurement tasks: Artificial Intelligence is expert in automating even complex tasks. AI will help bring more purchases under direct control by facilitating the creation of requisitions from free-form data like that contained in an email – not just data entered into a requisition entry screen. Speech recognition is composed to change the requisition and approval process for busy and off-site workers. AI will also be trusted to review and even generate and monitor supplier contracts, automating a typically labour-intensive set of tasks.
Better Visibility: AI in procurement will simplify more complex reporting that requires an enterprise view and additional inputs. The difference that AI will bring is in the speed and reliability of the reporting, to enable:
- Best pricing comparisons
- Identification of high-growth suppliers
- Real-time visibility into policy compliance and maverick spend
- Faster analysis of purchasing transaction details
- Proactive identification of forthcoming contract renewals or expirations
- Identification of opportunities for demand aggregation and supplier consolidation
Strategic sourcing: Artificial Intelligence is capable of “learning” your sourcing patterns and behaviours and making supplier recommendations. It can even be used to predict market prices, identify and analyse new potential vendors, and help you evaluate the success of your relationships with existing suppliers.