AI in procurement has led to procurement transformation in many ways, which were previously not imaginable.
According to Forbes, “By 2020, businesses that use AI and related technologies like machine learning and deep learning to uncover new business insights will take $1.2 trillion each year from competitors that don’t employ these technologies”.
For over a decade, Artificial Intelligence and its real-time applications have been pretty much in the Sci-fi state rather than the practical state. From seeing AI in works of fiction like Mary Shelley’s “Frankenstein” to witnessing a de-aged young and wild Robert De Niro with AI’s assistance in Martin Scorcese’s “The Irishman,” AI has grown leaps and bounds in the past decade.
Despite these futuristic feats, AI in procurement still feels like a distant dream. A vast majority of procurement functions always rely on dated on-point solutions, in-built ERPs, or manual processes, which begs the question that if your phone, car, or home appliances have technologically transformed in the past decade, why hasn’t your procurement approach?
The most remarkable transformation in procurement has been the evolution of autonomous procurement. Areas like Contract Management, Supplier Management, Procure-to-Pay, etc. have evolved due to digital transformation.
Now, we can either choose to sit on the sidelines and witness the trend or initiate our AI-led procurement projects to create an influence in a world increasingly driven by technology.
Traditional CLM software has developed cracks, including lack of central repository, missing key contract alerts, non-standardized templates, etc. With the advent of BOTs in the CLM space, the counsel teams can now refocus on strategic initiatives.
Key benefits associated with these BOTs are
Ask any procurement leader for a procurement itch, and most of them would say Supplier management. A constant worry is handling supplier relationships, evaluating performance, managing obsolete supplier records, identifying supplier-related risks, etc.
Some of the benefits that come with Supplier BOTs are:
Spend Visibility is a crucial factor to realize saving opportunities for every firm. While most firms have a fair idea of their significant or direct spending, indirect spending may account for 40% of an organization’s spending. These piling hidden-spends could severely impact your bottom line.
Hence, employing Spend BOTs could help with:
On average, a USD 2 Bn organization’s AP team receives 120-150 emails a day, and about two-thirds of these invoices are in unstructured paper or PDF format. Hence, most of their time is spent on manual tasks like sifting through emails, addressing supplier queries, keying-in invoice data, etc., leaving little time for strategic tasks and initiatives.
The new-age self-learning AP Bots can help with the following:
Autonomous procurement doesn’t just automate routine tasks. It also helps organizations realize massive savings due to higher spending visibility and minimized human errors. AI BOTs are capable of providing reports, recommendations, and summaries in both upstream and downstream activities. Therefore, AI in procurement has positively impacted the ways in which businesses function today with the advancement of technology.
As the pace of advancement has changed our lives in unimaginable ways, it is high time CPOs consider riding the crest of the AI wave to transform their functions once and for all.
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