7 Ways AI is Transforming the Procurement Sector

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 optimise 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 organisations 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.

1. 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 sourcing takes. It can learn patterns and take into account product needs and specifications to create smart supplier recommendations.

2. Making decisions about suppliers

AI can use performance-related data, such as credit scoring, audits, and evaluation to help inform decisions about which suppliers to work with.

3. Contract management

The ease with which AI can trawl through contracts makes it the ideal tool for extracting data and insights. It can also monitor to minimise risks and generate opportunities for greater cost-effectiveness. A better grasp of risk is not just important in terms of choosing suppliers, but also when it comes to ensuring compliance.

4. 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.

5. Invoice processing

When an invoice is received, AI automates its processing, speeding it up considerably and minimising any potential errors. Intelligent reading and understanding of invoices mean the right data can be extracted to ensure that payments are made on time, in the right amounts, and following contractual terms relating to specific relationships.

6. Spend monitoring

Classifying and interpreting transaction data in large volumes is something 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 realising savings opportunities and streamlining the time and resources that are required for a business' procure-to-pay process.

7. Catalogue management

AI can take control of catalogue 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 predict these are some of the ways 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.