Artificial intelligence (AI) is, whether we like it or not, impacting our lives evermore as we transition into the “digital age”. From personal assistants like “Siri” to medical diagnosis, AI can learn seamlessly from unstructured data up to 2.5 quintillion bytes in size, enabling decisions and actions previously assumed impossible.
So what impact will this have on Procurement? According to Accenture’s digital operations survey, 85% of organisations have adopted/will adopt digital technologies in their Supply Chain within 1 year of the report being published (2016). In another similar survey spanning 11 countries and 12 industries, Accenture found that 70% of corporate executives said they are currently increasing investments in AI.
One of the key implications of this change will reflect the huge amounts of generated data, enabling organisations to better understand variables and anticipate future scenarios, increasing agility and effectiveness. The increasing use of AI in supply chains will ultimately result in supply chains linking themselves with each other, enabling a seamless flow of products and information from one end to the other.
More specifically to Procurement, AI is contributing by driving cost reduction and compliance agendas by generating real time visibility of spend data, not only providing intelligent analysis but also helping to mitigate against issues of fraud in Procurement, an issue that has been widely reported on in recent times. In addition, AI could soon assist in some of the big challenges facing the industry, such as identifying new markets, tracking exchange rate volatility and ensuring best value without compromising on quality.
So what can we expect moving forwards? As trend analysis develops and the use of financial modelling to predict future pricing becomes standardised, we will see software engraining itself in the buying decision process. The next generation of spend analytics will see a revamped process of cross-checks, identifying and mitigating against mistakes and errors that currently take days to rectify.
There is no question that we are only just scratching the surface of data analytics technology but it’s benefits seem to be clear. Who knows what the future has in store from a Procurement standpoint, but we can say with certainty that AI will be an integral part of it. We are already seeing a demand for candidates who understand technology and spend analytics and it seems this will be an important trait when searching for talent moving forwards.