These 5 Core Drivers for End-to-End Procurement Automation
In this article, you will learn about five core drivers of end-to-end procurement automation. The information will help you understand the transformation of your procurement function.
Speed to value can be elusive, but it’s of vital importance for any organization. Many procurement organizations realize the increasing pressure to maximize savings and accelerate delivery timelines. They also want to mitigate supplier risks. Altogether, legacy manual processes and age-old frameworks compel the procurement leaders to re-think their strategy.
Here are the main areas where digital procurement transformation augmented with AI, ML, and RPA are driving values for organizations seeking fast-paced growth and staying ahead of the competition:
Simplified Spend Management and Analysis
First of all, the challenge with traditional spend analytics is that it doesn’t allow you to do something beyond the limited functionality of your spreadsheets. The new analytics technologies have the potential to reach conclusions that are beyond the scope of a traditional spreadsheet. The data from sources like the spend, contract, supplier, invoice, etc. are disparate in format and presentation. They are not easy to join or analyze together individually or collectively. But these data are a source of major intelligence that can help you gain unique insights. Best procurement automation solutions like Zycus uses AI and machine learning algorithms. Such technology utilizes data from disparate sources and figures crucial insights. AI/ML algorithms can help users gain insights to solve pressing problems and along with it, get suggestive actions. AI, in a self-learning environment, is capable of understanding complex cause-effect relationships. They perform what-if analysis at the click of a button. This results in better spend management and opens new avenues for procurement savings.
Procurement Transformation from Tactical to Strategic
Secondly, three of four procurement executives from the 2019 Pulse of Procurement study claim procurement to be critical to enterprise strategy and success. While digital solutions make procurement processes far more efficient and effective than in the past, they create strategic opportunities. Please note that within the premise of cognitive procurement, professionals are at the forefront to drive strategic relationships. They can innovate across the value chain. Cognitive procurement offers capabilities that fetch real-time insights into your market and competitors to help plan ahead of time. In addition to self-learning, cognitive procurement use demand-sensing combs o filter insights from massive volumes of structured or unstructured data. Procurement can exploit a high degree of segmented automated tail spend to make strategic decisions. By helping accelerate innovation across the organization, procurement executives play a vital role in shaping a company’s broader digital vision.
Automated and Agile Operations
Matter of fact, AI can offer companies automation to boost efficiency and performance in procurement. AI, with its inherent capabilities, can help reduce redundant and time-consuming tasks to free up valuable time for other crucial engagements. Also, the administrative burden created on account of huge volumes of unstructured data is now easily managed by the procurement teams. AI can delegate day-to-day tasks such as checking invoices against contracts, record-keeping, and transcription to a digital assistant.
While the possibilities are endless with AI in procurement, here are two important features to render more agility and efficiency to your function:
- With AI, you can bring all purchases under direct control by facilitating the creation of requisitions from free-form data like that contained in an email and not just data entered into a requisition entry screen.
- You can trust AI to review, generate, and monitor supplier contracts besides automating labor-intensive tasks.
Breaking Silos and Frictionless Processes
Certainly, true digitization flows end-to-end across different functions. It seamlessly brings together all stakeholders. Procurement automation helps teams to easily share data and collaborate with cross-functional teams using centralized shared data. This accelerates cycle times and supplier performance resulting in greater value for the business.
Intelligent and Smarter Procurement
The building blocks to a smarter procurement are richer data sets, optimization engines, and tools to control demand and enforce compliance. For a long time, procurement has focused on data collection. Every day, the function generates information on areas such as expenditure and suppliers, and only through rigorous analysis of this data can process improve. The recent advancements in AI-enabled procurement systems have augmented the procurement organization with the power to spot worrying trends and alert the team automatically, removing the need for staff to spend time analyzing data. This way, AI-backed procurement solutions enable procurement organizations to execute advanced category management, better sourcing strategies, and improved forecasting.
Finally, the procurement function is standing at an exciting crossroads. Furthermore, they can either proactively adopt the change through digital solutions or can wait on the side-lines and react to the need of the hour. Leaping digital procurement transformation will not only reap significant gains in efficiency but will also help in enhancing the role of procurement in the organization. At the same time, modern procurement using cognitive technologies like AI and ML will make day-to-day tasks more efficient and seamless, allowing the stakeholders to spend more time carrying out strategic activities. Have you experienced AI in procurement yet? What do you think will be the most significant value of AI-driven procurement automation for your organization?