AI in Procurement: Measuring the KPIs
Today, most businesses have started to leverage procurement software to improve productivity, minimize costs, and drive growth.
More businesses, especially smaller and mid-size companies, are considering switching to digital procurement solutions. The procurement department views themselves playing a key role in establishing the company’s financial stability while maintaining strong relationships with suppliers.
Implementing Procurement software improves visibility into supplier data and gain insight into potential risk. Also, automation makes it easy to enforce purchasing policies while making the sourcing process effective. The solution can streamline requisitions, purchase orders, receipts, and invoice processes.
This enables you to view the entire process from a single interface while increasing visibility into transaction data. Procurement software can help with requisition management, catalog management, purchase order management, supplier management, and reporting & analytics.
Purchase requisition allows organizations to gain increased control over employee spend while catalogs provide access to details and get pricing information on various products.
With procurement software, POs can be created automatically and sent to the supplier quickly. This gives visibility into the purchase order status and facilitates communication with the supplier.
eProcurement software can use the self-service supplier management tools and a self-service portal to enable suppliers to communicate with buyers. These tools would allow suppliers to accept purchase orders, oversee invoices, and update the payment information.
When it comes to reconciliation, enterprises should work to improve their purchasing activities, weigh the costs, benefits, and vendor performance trends. Analytical capabilities of eProcurement software provide business leaders with the insights to understand expenses by type, and department while preventing unnecessary spending.
Procurement software streamlines strategic sourcing, contract management, supplier management, and spend analysis processes through intelligence. The software can help in managing the supplier information and risk management while integrating with contract management tools.
The procurement department is evolving rapidly, and automation can help streamline core procurement functions. Automated procurement software will reduce rogue spending while giving complete visibility into strategic sourcing activities.
AI across Procurement Functions
Sourcing
Artificial Intelligence has become more human than ever before, the technology can read your sourcing patterns, behaviors and allows you to connect with the best suppliers. This helps you focus on other strategic activities such as supplier selection, negotiation, assessment, and more.
Contract management
Contract management involves many steps and requires you to keep track of negotiations, multiple contracts, expiry period, and more. AI sends reminders to appropriate managers so any actions related to contracts can be taken before the time-lapse.
PO Management
Purchase order management involves requisition, ordering and processing POs; AI will check user permissions before taking a specific action. This assures every requisition raised and every order placed is authorized as per agreed terms.
Spend Analysis
Analytics is the key for making decisions today. AI-based procurement software reads purchasing patterns and buyer behavior and presents real-time insights into enterprise spend data. This information can help you make informed decisions about procuring goods and services from various suppliers.
Key Findings on Automation
The significant impact will be on internal processes. Automation of payments, procurement processes, and supply-chain activities have the most significant impact on the organization.
Automation will free-up employee time and allows them to focus on strategic business activities. Digitization will cut down overall costs; recruiting employees with specific digital skillsets can unlock digital transformation.
