It can be difficult to purchase the correct materials, from the correct supplier, at the correct price, at the correct time. With AI (Artificial Intelligence) at the forefront of the fourth industrial revolution, the question arises of how can AI be best adopted by procurement companies and departments?
It’s important to separate the excitement and the reality and get an understanding of how AI in procurement is a game changer. Here are just some of the ways that by adopting AI into your procurement setup, your business can reap the rewards:
Faster - Menial task automation
Procurement teams deal with a large number of complex sets of data on a daily basis, which takes up valuable time. By incorporating AI to automate many of these tasks, this can free up time adding additional value to the business by developing relationships with current and new suppliers and internal stakeholders.
The adoption of AI will allow menial tasks to be actioned in minutes and seconds instead of hours and days. According to a recent study by Ivalua, “Two of the biggest areas flagged by respondents as having the greatest potential for automation is invoice processing (51%) and approval of proposed purchases (35%).” Jean-Phillipe Collin is a former Chief Procurement Officer and says “programs automate the control of thousands of line-by-line invoices by comparing them with purchase orders, supplier contracts or accounting plans and then automatically populate complex databases”.
Better - Financial Modeling
The ability to crunch huge amounts of data and churn out meaningful outputs is how AI can be used to achieve greater levels of trend analysis. With the correct data, financial modeling can be used to predict future pricing patterns and even for risk assessments. Incorporated correctly, if an invoice is submitted late, this can trigger a search for red flags relating to that company and can raise any appropriate action.
With more accurate predictions, Procurement teams are able to plan for the future and drive greater business value. With technologically driven insight into contractual data, adopting AI technology makes it possible to proactively anticipate risk and see more clearly the opportunities typically obscured from view.
Smarter - Attracting talent
Having incorporated a better, smarter and faster procurement system with cutting edge technology, this will make teams more productive whilst also adding other tangible benefits. The new wave of tech-savvy youth entering the jobs market will require their employer of choice to be forward thinking and utilizing the opportunities of AI. This, in turn, will motivate staff and help attract a higher quality of candidates. Collin again says – “The technology provides procurement chiefs with an opportunity to improve the working lives of their teams and, through productivity gains, grow the business at the same time. Those who seize this opportunity will be the winners.”
According to Magnus Bergfors, a Research Director at Gartner, “in order for organizations to start creating significant value from AI, they must deploy the technology on top of the right platform, data, and processes.”
This, in essence, is Level’s bread and butter. Through our knowledge automation technology we source all of the correct information when needed, apply the relevant (and extremely complex policies) that it knows off by heart perfectly (because we have taught it) in order to instantly make the correct decision and take timely actions. Ultimately, we teach it to think like the perfect human.