In today’s complex landscape of procurement and supply chain, it is vital for the functions to become more strategic in their approach. One such tool that can help procurement to become more strategic is AI.
Putting this technology at the centre of the functions can help procurement teams with forecasting demand, optimising savings, calculating supplier scores, and monitoring budgets, to name a few.
“Having sophisticated artificial intelligence (AI) by your side certainly provides a competitive edge to your organisation,” commented Zycus. “AI can assist your sourcing and procurement teams at every touchpoint in the procurement lifecycle, simplifying the buying process.”
Six ways AI can solve procurement’s biggest challenges
AI can help the procurement function to identify what and where to source. The technology can take into account the needs of the business, provide suggestions for best contracts or suppliers, shorten the time spent sourcing and ensure the best deal.
2. Auctions and supplier performance
AI can also help with eSourcing and bidding. The technology can place bids on behalf of suppliers, send out requests for information (RFIs) or requests for proposals (RFPs), and track performance in real-time.
“AI’s language processing capability allows it to read the content needed then produce proposals dynamically based on that data,” said Zycus. “AI even provides insights into what could be improved upon or how you can avoid pitfalls that are commonly made by procurement professionals.”
As such, organisations can benefit from a reduction in time spent on detecting errors and making corrections as well as saving the procurement team’s time and effort.
3. Spend analysis and classification
AI can also be beneficial in the classification and interpretation of vast quantities of transactional data. This data can be used for predictive analysis allowing the function to make more intelligent and data-driven decisions.
With the help of AI, organisations can automate the spend process to monitor and identify any irregularities in real-time. These use cases help organisations to reduce the amount of time spent on the procure-to-pay (P2P) process.
4. Contract management
AI can be used by those in procurement to monitor, review and extract insights from contracts. With this capability, organisations can minimise risks and maximise savings opportunities.
“While you are focused on making sure all your product needs are met, AI makes it possible to identify risks across suppliers which not only leads to enhanced compliance but also offers better insight into supplier performance and potential mitigation strategies or early detection of supplier issues,” said Zycus.
5. Catalogue management
“Catalogue management isn’t always easy and there are often multiple versions of a product being managed at once across different catalogues, suppliers, etc.,” explained Zycus.
But with AI procurement functions can quickly find duplicates, associate items with the correct catalogue, and identify new opportunities. AI can help the function to optimise the catalogue management process and reduce costs.
AI has the ability to automate the entire invoicing process. AI enables the automation of invoice matching, the extraction of vital data, analysis of important data, and automating the classification of invoices, all to improve accuracy, visibility, savings, and on-time payments.
“AI has tremendous potential to empower procurement leaders and gain a distinctive advantage to early adopter organisations by delivering superior ROI. The applications of AI in areas of spend classification and analytics, contract management are enjoying wider acceptance across industries,” said Zycus.