The world has gone digital. People are more connected, efficient, and productive and are living life faster than ever. But today’s fast-paced world impacts more than just our personal lives. Digitization is presenting new opportunities for businesses to predict and respond more effectively to customer and market demands. From machine learning, artificial intelligence (AI), and the Internet of Things (IoT) to blockchain, cloud, and networks, digital technologies are opening the door to new, more efficient and intelligent ways of operating.
Nowhere is this more evident than in procurement. Unlocking these digital opportunities requires new approaches in how we connect with people and access information that will fundamentally change how buying and selling are done.
Machine learning and artificial intelligence have made their way into procurement applications and are fueling smarter, faster decisions. A new breed of cognitive technologies promises to push things even further.
Digital technologies drive simplicity and automation that can help procurement create advantage for their organizations today. But the future of procurement is all about intelligence. And cognitive technologies are the key to unlocking its potential.
Cognitive technologies present new opportunities to predict and respond more effectively to customer and market demands. They also open new approaches to connecting people and information—all of which will fundamentally change how buying and selling are done.
Sourcing using a digital procurement assistant, combined with machine learning, can transform sourcing events by helping with tasks such as defining the correct “request for proposal” type; identifying appropriate suppliers to participate based on commodity category, region, or industry; and delivering intelligence on market signals and pricing pressures to optimize results.
Contracting can also become smarter and more comprehensive with applications that automatically identify relevant terms and conditions matched to legal library and taxonomy, uncover similar contract terms for a specific commodity by industry or region based on benchmarking data, and suggest optimal prices to target based on expected volume and contractual discounts.
Intelligent platforms exist that use data insights to empower procurement professionals to make smarter, faster decisions across their supply chains. The application can impact the entire procurement process, from improving spend visibility to assisting buyers and enriching content management.
The technology brings intelligence from procurement data together with predictive insights from unstructured information to enable an even more intelligent source-to-settle process for managing all categories of spend.
And procurement is ready to embrace them. We recently conducted a global survey of procurement, finance, and supply chain function executives in partnership with the University of Applied Science Würzburg/Schweinfurt. And the top priorities for the year ahead among those polled were clear: Big Data and predictive analytics (72%) followed by AI (including machine learning) and cognitive computing (22%).
Like the rest of the world, procurement has gone digital. It’s now ready to be smart. By embracing intelligent applications and the technologies underlying them, procurement can reimagine their supply chains and take insight-driven actions that go beyond savings and efficiencies to create broad business value. Forward-thinking, innovative procurement and supply chain organizations that think fast can not only drive bottom-line savings, but contribute to the top line of their organizations by fueling innovation that leads to growth. Those who stall will find themselves being lapped by the competition.