While generative AI is emerging and use cases are evolving, artificial intelligence in the form of natural language processing (NLP), machine learning, and deep learning has been in use for years. Despite most solution providers not being shy to broadcast this, it still feels like it’s being a little forgotten. Now everybody is talking about generative AI as if the technology alone is going to transform procurement.
Don’t get me wrong, there are some very exciting opportunities and use cases for generative AI, but we still have a way to go. As I’ve mentioned before, generative AI is severely overused in most marketing materials. Much of the heavy lifting is done by other AI technologies like the ones mentioned above.
So, in today’s article, I’ll highlight three areas where AI can currently generate tremendous value. Think of this as a roadmap for those who have yet to gain access to or implement these types of solutions.
Automation
Solution providers have been using AI for years to drive higher levels of automation. Machine learning and deep learning simulate human intelligence and problem-solving capabilities that allow systems to perform tasks that would otherwise require human intervention. Examples include Keelvar, which uses AI to identify columns in spreadsheets that allow users to create sourcing events without having to manually map the Excel columns to data fields in the sourcing solution. SpendHQ is using AI to automatically classify spend, while Fairmarkit is using AI to suggest alternative suppliers in sourcing events and so on.
As AI evolves, solution providers can automate more of what were previously manual processes — with limits set only by what users want to automate.
Decision Support
Another area where AI is bringing value is analytics and decision support. Using AI, the solutions can provide (within context) information to help make better decisions. Coupa has offered for a few years now what it calls community.ai where things like supplier performance data is presented when an end user needs help during the supplier selection process. Arkestro is helping both buyers and suppliers by presenting predictive competitive pricing in sourcing events. Risk management solutions like Everstream Analytics are using AI to help identify and mitigate risks in your supply chain.
UX Improvement
User experience (UX) is probably where GenAI will have the most impact. There is already AI-powered chatbots and AI agents that allow end users to interact with solutions using natural language. Intelligent workflows are also used to help end users perform tasks. Automation and UX overlap also exists to optimize end-user experiences.
Intake and orchestration solution providers like Zip and ORO Labs are also addressing UX improvement. Zip is using AI to improve workflows by automatically extracting data from uploaded documents and infusing risk data into the process. ORO Labs is also using AI to understand spend categories to apply the correct procurement process.
But suite providers like Ivalua and Coupa are not resting on their laurels. Coupa announced its AI agent Navi at this year’s Coupa Inspire and Ivalua launched its Ivalua Virtual Assistant (IVA) in late 2023.
So, Get Started (If You Haven’t Already)
As you can see, AI can really be a force multiplier for procurement organizations, and this is just scratching the surface. So, if you are not already using or investing in AI-powered technology, it’s time to get started now. If you want to know where and how to start, don’t hesitate to reach out to us at Ardent Partners.
RELATED RESEARCH
Procurement 2024 BIG Trends (Part 1): AI, Savings, Inflation, and Cost of Capital
CPO Rising Listicle: Procurement AI in Action, Part 1
Magnus Mondays — GenAI Is Cool, but Should Everything be Automated?
Magnus Mondays: Ivalua Now 2024 — All in On Generative AI
Tagged in: AI, Artificial Intelligence, generative AI, Magnus Bergfors, Magnus Mondays, Solution Providers, Technology
