There has been a lot of talk about Artificial Intelligence (AI) in procurement. However, what this tech really boils down to is a system that can solve problems, and optimize solutions, across a procurement lifecycle. As a procurement recruiter, we often find it helps to simplify AI in this way so that its true power doesn’t get lost in a sense of complexity or overwhelm. That being said, AI has the potential to change the face of the procurement sector - and the experience of organizations within it - in a number of impressive ways.
Using AI to create a competitive edge in procurement
AI has a lot to offer those engaging with the procurement sector - as a procurement recruiter, we have identified a number of key ways in which it is changing how organizations approach procurement going forward.
Sourcing. The power of AI lies in providing insights into where the best possible deals are when it comes to sourcing, as well as reducing the amount of time that sourcing takes. It can learn sourcing patterns and take into account product needs and specifications to create smart supplier recommendations.
Making decisions about suppliers. Performance-related data, such as credit scoring, audits, and evaluation can be used by AI to help inform decisions about which suppliers to work with.
Contract management. The ease with which AI can trawl through contracts makes it the ideal tool for extracting data and insights, as well as monitoring, so as to minimize risks and generate opportunities for greater cost-effectiveness. The better grasp of risk that can result is not just important in terms of choosing suppliers, but also when it comes to ensuring compliance too.
Auctions. AI can be a key tool when it comes to bidding, not just placing bids on behalf of suppliers but dynamically producing proposals based on the data in previous content.
Invoice processing. When an invoice is received, AI automates the processing of it, speeding it up considerably and minimizing the potential for error. Intelligent reading and understanding of invoices mean that the right data can be extracted to ensure that payments are made on time, in the right amounts, and in accordance with contractual terms relating to specific relationships.
Spend monitoring. Classifying and interpreting transaction data in large volumes is something that AI can do in a very short space of time. The result is insights that can be fed into predictive analysis for intelligent decision-making. Where this is automated, it can have many useful functions, from spotting irregularities to realizing savings opportunities and streamlining the time and resources that are required for a business’ procure-to-pay process.
Catalog management. AI can take control of catalog management and smooth out any bumps in the road, whether that relates to matching up items with the right tags, seeking out duplicates, or being proactive about finding new product opportunities.
As a specialist procurement recruiter, we can predict that these are some of the ways in which AI is going to influence the relationships between those operating in this sector. If you are looking to recruit business-critical talent or to leverage artificial intelligence skills in your business, request a call back from one of our consultants.