One of the major digital impacts on businesses in the near future will be from Artificial intelligence. It is imperative that organizations gear up to be AI Ready to capitalize on first mover advantages.
We take a focused look on how AI Chatbots are changing the procurement process landscape and assess how it has the potential to become a major business game-changer.
Defined as “the capacity of a computer to perform operations analogous to learning and decision making in humans,” conversational AI has the potential to engage people more resourcefully.
Conversational Interface (CI), commonly referred to as Chatbots involves verbal and written communication akin to chatting with a human. It is endowed with the feature of context aware memory that allows it to remember previous conversation with the same person. Procurements are using chatbots to not only restructure the people to business linkage but also to turn it a viable and effective customer service feature.
Procurement functions have traditionally been saddled with heavy manpower resources, cumbersome paperwork processes and burdened with substantial administrative costs.
This is one of the major reasons that AI is increasingly being incorporated into the procurement process. Procurement departments are open to testing and implementing a multitude of technological solutions, be it the Internet of Things using AI or testing with block chain, they sure are seeking viable solutions to enable better and faster work optimization.
COVID 19 has in its wake has opened up newer avenues of incorporating latest technologies rapidly and making systems and process more automated, resource optimized and result oriented.
However there is a transition phase that needs to be considered. Procurement departments will need align themselves to reducing their dependence on labor-intensive processes and match consistent data so as to fit in with intelligent automation. There are many emerging technologies that are helping to bridge the gap and enable a seamless transition model.
Listed here are some of the ways that AI could impact procurement models making them more resourceful and effective.
A survey conducted by Ivalua, showed that two of the biggest areas as having the greatest potential for automation is Invoice Processing (51%) and approval of proposed purchases (35%).
Procurement software will lean towards AI based invoice automations. This will allow the transfer of mundane, daily tasks like invoice to contracts checks, purchase orders, recordkeeping, etc to a digital assistant. This will free up the time and resources spent by the employee and allow him to focus on high value work.
Chatbots will play a larger role in influencing buyers on what and when to buy based on consumption patterns. In the foreseeable future AI in combination with predictive analysis may just implement purchases autonomously and may also consider external factors like seasonal changes which can help control damage from unused inventory.
Supply chain risk is a bottle neck point for buyers. Incorporating technology will go a long way in easing the pressure. It will enable companies to have control of suppliers via verified data and in association with predictive analysis they can create supplier risk profiles and risk events.
As supply chains update their software to automate POs it will allow a seamless collaboration between procurement and vendors, reduce order times and execute supply chain operations more effectively and on real time basis.
As procurement departments incorporate a data focused approach, and add more value to the organization, it will move swiftly from being seen as only a support department as one having a strategic impact on the bottom lines . * It is estimated that AI may help procurement attain 15-25% savings on addressable spend.
Technology is changing the business landscape at an exponential rate. Enterprises are in a complex race to incorporate the latest trends and technologies to stay at the top of their game.
As AI progresses, it will create path breaking collaborations and will take the experience levels to a new high. Co-botics will be the scene of the near future where the coupling humans and robots will deliver tremendous results.
So as purchase departments commence the journey towards becoming AI empowered, many opportunities will surface to catapult the procurement into a more strategic role that can deliver reliably higher value.