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Home » Blog » Procurement Technology » Artificial Intelligence (AI) & its Impact on Procurement

Artificial Intelligence (AI) & its Impact on Procurement

How Human is Artificial Intelligence Whats in it for your Procurement
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Artificial Intelligence is transforming procurement in this new digital age impacting the procurement function of enterprises. McKinsey & Company recently surveyed 3,000 global C-level executives and figured that investment in Artificial Investment is growing by leaps and bounds. This growth, led by technology giants such as Google and Baidu, also includes many automotive and financial services companies of global eminence.

The McKinsey survey also reports that the transformation and adoption of Artificial Intelligence (AI) in procurement outside the technology sector is still in its early and experimental stage deployed by only a handful of companies. 20% of the surveyed indicated their usage of AI-enabled technology using artificial intelligence at scale or as a part of their core businesses.

According to McKinsey, the application of AI (Artificial Intelligence) spans many corporate functions and includes Artificial Intelligence is transforming procurement as well. Starting from improvement in forecasting to optimization and automation of operations, including the development of target-marketing and pricing initiatives, AI is a big boon that can bless user experience tremendously.

In the study McKinsey made an interesting observation. The observation is how tech-savvy companies that have seriously undertaken digital transformation are yielding the same profits as those that are invested heavily in artificial intelligence. And from this observation, it is fairly conclusive that companies should no longer delay embarking on their digital transformation journey through the adoption of technologies aided by AI. “Early adopters are already creating competitive advantages, and the gap with the laggards looks set to grow,” McKinsey warns.

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AI’s contribution has been known to drastically improve the forecasting accuracy of end-customer demand for finished goods and material requirements. The trends and patterns that AI brings to the table are not evident in traditional forecasting methods relying largely on historical data. The accuracy of demand for as-yet-to-be-ordered finished goods generated by AI based on data it is fed helps procurement organizations satisfy those requisitions in way efficient manner.

Accurate and repeatable inventory projections generated by Artificial Intelligence render clear competitive advantage when compared to traditional forecasting unsuitable for processing and analyzing vast quantity of data. And talking about data, product descriptions, inventory mapping, product seasonality, customer brand perception arising of product quality, advertising campaigns, local conflict and labor strikes, media coverages, and a lot more, are all well harnessed by AI technology to the benefit of the entire supply chain.

What is Artificial Intelligence in Procurement Used for?

IN A NUTSHELL, AI HELPS IN

ENHANCED  DELIVERY COMMITMENT:

Reduce manual intervention, and processing windows

EXPEDITED PROCESSES:

Optimize processes, increased data processing, and enhanced productivity

ACCELERATED SCALABILITY:

Deployment of scalable and flexible virtual workforce at effective pricing

IMPROVED REPORTING:

Immediate insight with granular visibility through dynamic dashboards

IMPACT OF AI ACROSS FUNCTIONS

Sourcing

Over the years it is noticed that Artificial Intelligence has become more human than ever. It can read your sourcing patterns and behaviors, and connect you with the best suppliers. This saves you time for strategic activities including supplier selection, negotiation, and value assessment for what worth it is.

Contract Management

With Zycus’ AI-based iContract feature known as Smart Assist important contract date(s) can never be missed. Its prompt for renegotiation, uploading multiple contract line items, and viewing of the contract outline without having to download the document, keep supplier performance on check.

Purchase Order Processing

Intelligent software that processes your order only when it is aware and you have the permission to order it. This is one simplified click unless in exceptional cases where a professional’s intervention is needed.

Savings

How can procurement prove its worth to the organization? It is only feasible through the measurement of savings in real time. ZYCUS’ intelligent solution helps cut the arguments around ‘percentage realized’ and helps assess every order and invoice against the already agreed upon savings goal.

Spend Analysis

The industry that is so heavily analytics based because it has to munch so much data from all over, the rescue is an AI-based spend analysis software that can extract real-time, granular insights from enterprise spend data.

We at Zycus have taken the first step towards a new era of AI powered procurement processes.

To know more about our journey, click here.

 If you would like see Zycus AI Merlin Suit in action, we would be happy to set up a one-to-one Demo for you and your colleagues- Request a Free Demo

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