E-procurement refers to the Business-to-Business, Business-to-Consumer, or Business-to-Government purchase and sale of supplies, work, and services through the Internet. The value chain of the procurement process consists of the following stages:
Purchase Order Integration
Now with the help of the right Procurement Software Solution, all the above steps and methods can be seamlessly integrated into one package. But it is important to remember while reaping the benefits of E-procurement to streamline the various complicated procedures with least turn-around time and minimal human intervention. This is where Artificial Intelligence plays a key role.
Artificial Intelligence: How to implement it for E-procurement?
Artificial Intelligence (AI) is becoming the most disruptive business trend today and is paving way for path-breaking solutions to complex industry scenarios with current, effective and comprehensive techniques identified by systems even before industry gurus can identify or forecast its impact and relevance. The Result? An Increasing number of businesses are slowly moving towards AI with the ambition of achieving higher business results and greater sustainability in the competitive world.
Now, let us dive deeper into how AI can be implemented for E-Procurement solutions.
With increasing trend and focus on creating more and more sophisticated machine learning processes, Artificial Intelligence in procurement is able to forecast and estimate requirements before anyone else making them future-ready.
It is important to realize the true potential of data collected by the current procurement actions of an organization. AI allows this data to be automated and render it successfully for repetitive tasks. This in the process discloses concealed potential and strategic reasoning in a complex decision making scenario making it easy for companies to gain insights into areas of improvement and resolve them successfully.
AI uses chat bots to create the potential of turning voice assistant technology into a virtual service functionality adding new dimension to the entire procurement experience.
AI and E-Procurement: Must To-Do Case Studies for Industry Experts
As the concept is still in its nascent stages, it is still too early for companies to ascertain case studies and arrive at a conclusion how implementing AI to their existing Procurement Solution has facilitated and enhanced sales and profits. With this in mind, let us view in more detail and focus the exact areas of impact when AI and E-Procurement go hand-in-hand:
Strategic sourcing: In order to make happy stakeholders and happier vendors, it is important to implement sourcing optimization tools to manage complexities of strategic sourcing. The turn-around time is drastically reduced resulting to greater efficiency and productivity with an upwardly moving Happy Index.
Cost Optimization: Implementing AI reduces overall costs of the entire Procure-To-Pay cycle and increases greater efficiency and significant growth with least manpower and efforts. This is one aspect where the Application leaders should prioritize investment in solutions that support automation for spending categories that are not well-served by current systems. It is important for organizations to run case studies on Spend Analysis before and after implementation of AI to E-Procurement solutions.
Contract Analytics: The next case study to really measure the impact of this new change would be to do a proper Contract Analysis before and after implementation. The results would clearly show the impacts of the activity with existing data eliminating redundancy increasing efficiency and saving time.
Risk Management: Every new endeavor involves risks and factors within and beyond the scope of control. It is imperative to calculate any risk before new software or changes to the existing process is implemented.
These case studies once available should be published online to facilitate other companies who are in the process or seriously considering moving into a similar model.
AI and E-Procurement: The Future
Although it is too early to predict anything primarily because AI is still in an evolving phase, it is quite clear from the recent industry trends that most companies in the supply chain domain is moving into an e-model with AI-enabled technology to facilitate better flow of the Procure-to-Pay experience. The older tedious methods of tender bidding, invoice generation, and vendor management are getting automated and repetitive tasks identified and captured by machine learning processes to facilitate faster execution with least human interaction. AI has revolutionized the way we think, operate and execute and the latest industry trends show no less, but it will still take a few more years to fully understand and capture the reality of its impact.