How Companies are Using AI to Navigate the ‘Polycrisis’

Artificial intelligence (AI) is revolutionising procurement by addressing challenges brought by the polycrisis era, according to SAP

SAP, the multinational software company, has published a feature looking at how companies are using AI to better analyse and manage their spending in the current era.

Battling through the ‘polycrisis’

The feature discusses the current procurement market, which, marked by geopolitical conflicts, energy crises, and climate challenges, has been dubbed a ‘polycrisis’ by experts.

This crisis has led to fragile supply chains and volatile markets, both of which struggle to adapt to demand changes. To thrive in such times, companies must reassess their business models, with a focus on expense management, strategically controlling and optimising all expenditures.

Expense management reveals daily spending across various areas like office management, production, and logistics, enabling effective analysis, documentation, and management. Digital spend management solutions offer transparency and visibility, identifying risks faster and enabling proactive resolution. They also make Co2 emissions transparent, empowering decarbonization efforts.

How AI is powering up procurement and purchasing processes

AI has become ubiquitous in our daily lives, from improving search engine results to facilitating automatic text translation. With the emergence of generative AI, companies and entire industries are actively integrating it into their systems to enhance processes and efficiency.

In procurement, the impact of the current era's challenges is profoundly felt, prompting significant transformations. Resilience, transparency, and sustainability are paramount, with AI poised to play a pivotal role.

AI has the potential to digitalize procurement, streamlining operations and boosting efficiency. Stakeholders anticipate AI implementation to improve decision-making, automate processes, and accelerate insights, leading to cost reductions and error mitigation. The question now is not whether companies will adopt AI, but when they will do so – and the time is ripe for action.

Walter Sun, Global Head of AI at Sap, says: "AI technology is changing the way supply chain and procurement teams function, releasing them from mundane and repetitive tasks."

Walter Sun, Global Head of AI at Sap (Credit: LinkedIn)

"AI’s impact on productivity has the potential to add trillions of dollars in value to the global economy. Generative and predictive AI can help procurement and supply chain teams forecast disruptions, identify alternate sources of raw materials, detect errors in invoices, extract relevant data from requests for information and predict shipment and delivery times."

AI strategies - think holistically 

As AI plays an increasingly central role in procurement, it becomes vital for businesses to adopt a flexible and adaptable strategy aligned with their goals and values.

This consistent transformation approach enables companies to address real-life challenges effectively by integrating AI into data analysis and prediction models, driving tangible outcomes. However, the success of these initiatives hinges on the quality and availability of corporate data. Companies must clean up their data pool to ensure only valid and meaningful data is included.

Generative AI, particularly in spend management, procurement, and purchasing, holds immense potential. SAP is committed to upholding principles of relevance, reliability, and responsibility in this domain, alleviating employees of repetitive tasks through solutions like Joule, SAP’s generative AI copilot. This technology spans various sectors, from HR to supply chain management, empowering companies to optimize their procurement strategies and enhance efficiency.

Category management is pivotal in procurement, with 33% of experts prioritizing it as a top technology trend. Digitalized and AI-enhanced category management integrates generative AI to improve precision in product categorization and procurement. By leveraging AI-supported algorithms, companies gain valuable insights for optimized inventory management and strategic purchasing decisions.

With the growing volume of data generated daily, companies face challenges in harnessing it effectively while ensuring data privacy and security. Collaboration with strong partners like SAP, focusing on data protection and integrity, is crucial to advance procurement through intelligent solutions. Now is the time for businesses to embrace an AI mindset and propel procurement forward through smart category management and strategic collaboration.

​​​​​​​******

Make sure you check out the latest edition of Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE 2024 ​​​​​​​

******

Procurement Magazine is a BizClik brand

Share

Featured Articles

P&SC LIVE New York – Amanda Davies, Mars Snacking Keynote

Amanda Davies, Chief R&D, Procurement and Sustainability Officer at Mars Snacking discusses sustainable futures

Beko: Supplier ESG Plan Delivering Sustainability Success

How is home appliance giant Beko using their sustainable supply chain management and Supplier ESG Programme to deliver sustainablity success?

Four Speakers Announced for P&SC LIVE London

Executives from Vodafone, Unipart, Mastercard and SAP will join Procurement and Supply Chain LIVE when it returns on September 24 & 25

We’re LIVE: Procurement & Supply Chain LIVE New York – Day 2

Risk Management

We’re LIVE: Procurement & Supply Chain LIVE New York – Day 1

Procurement Strategy

Four New Sponsors join P&SC LIVE London in 2024

Digital Procurement