For years companies have reported their belief that having a digital strategy is important, but very few of them actually had one, and those that did, hadn’t made much progress in implementing it. But within procurement departments, industry insight tells us this is starting to change…
Procurement systems are increasingly based on modern digital technologies. A good procurement system will use artificial intelligence (AI) to complete business-as-usual procurement tasks with significantly reduced levels of human intervention. For example, to automate key administrative processes.
Purchase requisitions are reviewed by ‘bots’, using algorithms based on catalogues, preferred suppliers and historic transactions, to approve and progress those which comply with ‘the rules’, only escalating those that don’t for review by the procurement team. And when they do refer a complex query, it comes with accompanying analysis that makes the review simpler.
The simplest tasks can be made quicker and easier – from automatic updating of inventory lists and negotiating with suppliers for low-value items, to managing documentation electronically and the first-point-of-contact resolution of straight-forward queries via chatbots.
A good procurement system can generate massive cost savings and free the buying team to concentrate on higher value-add, complex tasks. And although AI is typically applied to transactional processes, this can also extend to more strategic tasks, such as vendor selection and management.
And when they do refer a complex query, it comes with accompanying analysis that makes the review simpler.
Easy access to data, automated analytics and reporting, and the creation of digital dashboards all provide organisations with greater insight into their supply chain. That insight can help improve spend management and promote more strategic vendor negotiations, as well as manage risk – for example, detecting potential fraud.
A note of caution, however; with increased levels of data and online transactions comes the need for really robust data security. Cyber attacks are ever increasing, and as that threat becomes more prevalent, procurement professionals need to take steps to protect sensitive personal and financial information relating to both to their own organisation and to their suppliers.