Notice that, from the dawn of civilisation, procurement has become more effective in-step with technological development.
AI is the capstone of technological development, and with it, procurement takes its next leap.
Achieving Extreme Efficiency
Since the ancient Egyptians used scribes to manage the supply of materials when building the pyramids as far back as 3,000BC, procurement aimed to be efficient.
But human error and lack of data meant errors and waste.
AI translates into extreme efficiencies that stone, papyrus and rolodex don’t allow for.
Identifying New Fiscal Opportunities
Do you remember the invisible gorilla test? Participants were asked to watch a video of a basketball game and count the number of passes.
Most of them missed the huge dancing gorilla that did a jig on the court.
AI has the power to solve this human ‘inattentional blindness’ by casting a wider cognitive net, creating revenue and savings opportunities.
Automating Manual Skills
Let’s be honest, procurement is full of so many mundane and time-consuming tasks such as monthly process detailing, performance reporting and yawn-a-yawn-yawning.
AI can automate most of these processes so that teams can preserve their zest for more engaging tasks, putting their skills to better use.
Capturing and Applying Scarce Knowledge
Knowledge is power. Or, in this case, data.
Artificial intelligence can boost procurement organisations’ effectiveness by allowing them to capture relevant new sources of data, discerning patterns in already-existing or incoming data – or even scrawling the internet.
As big-data nodes build, so does the opportunity to connect the dots.
Optimising Supplier Relationships
You have 500 suppliers for 50 different categories and they’re always fluctuating – as is the market.
Effective supplier relationship management relies on effective data, and AI as the processor of that data can allow for stronger and more optimised supplier relationships, from compliance to competitive pricing.
You hear much about silos and disconnected aspects of procurement – and one of the fundamental goals of transformational projects is to connect and synthesise these aspects – whether they be inter or intra-departmental.
AI has the potential to streamline and align internal procurement operations, as well as connect entire organisations to external units or even geographic locations.