It’s no secret that digital procurement is booming over the next few years.
CPOs are realising the benefits of implementing digital processes and technologies to streamline and offset manual tasks for users to focus on more strategic decisions.
According to the most recent Deloitte 2020 Chief Procurement Officer flash survey, 18% of CPOs regret not accelerating digitalization fast enough through investment in digital procurement. Now, in less than a year, 84% of Procurement Chiefs plan to accelerate its use.
Some of the key digital technologies and keywords standing out in Procurement accordingly to Deloitte:
- artificial intelligence
- machine learning
- block chain
- robotics (RPA)
- collaboration networks and platforms
- advanced analytics
An article and e-book by Sievo’s Co-Founder, Sammeli Sammalkorpi, and US CEO, Johan-Peter Teppala, delve into Artificial Intelligence (AI) in Procurement – what is it and how can it benefit your company?
What is AI in Procurement?
AI ‘allows Procurement organizations to solve complex problems more efficiently or effectively using smart computer algorithms.’ It aims to solve and execute manual, complex tasks better and more efficiently than humans, who can sometimes get it wrong.
Within Procurement, AI is becoming a key player, linking to automating processes which free up more time for workers to focus on more strategic endeavours. While some may be a little sceptical to invest in AI and see the benefits of its implementation, it is set to rapidly change work practices across organizations, big and small.
Definitions and types of AI in Procurement
What can AI actually do within the Procurement function?
Using AI as part of a digital transformation within Procurement can have a positive impact across many organizations’ internal departments, such as finance by using spend classification. Machine learning can help reviewing more invoices in a shorter amount of time compared to humans and categorise them in minutes.
- Vendor matching
- Capturing supplier or market data
- Anomaly detection
Where else can AI be used across the Procurement cycle?
There is no streamlined list for how AI can be used within the function, as more technologies continue to be created, but here are some suggestions:
- Supplier Risk Management
- Purchasing Software
- Accounts Payable Automation
- AI Spend Analysis Software
- New Supplier Identification
- Strategic Sourcing
- Contract Management Software
Clearly, AI has the potential to benefit organizations’ Procurement functions significantly, from onboarding and training, all the way through to freeing up time for workers as we become busier and more interconnected in a rapid world of technology.