July 26, 2023 Here’s How AI and ML Will Revolutionize ProcureTech

Despite adopting AI, ML, and RPA, ProcureTech’s usage remains low. Learn what these developments mean in the next era of ProcureTech.

ProcureTech has witnessed a remarkable transformation over the past few decades. Old school methods of sourcing — e.g., sprawling spreadsheets, pens, paper and notepads — have been replaced by a modern tech stack that has revolutionized the procurement lifecycle as we know it. In particular, the integration of artificial intelligence (AI) and machine learning (ML) has played a crucial role in driving progress alongside increased robotic process automation (RPA) adoption.

However, despite its potential, AI adoption in procurement remains relatively low. In 2019, only 25% of procurement leaders had deployed AI solutions in their operations (with another quarter indicating interest in doing so). Nevertheless, there’s growing interest and excitement surrounding AI, indicating a shift in the industry’s perception. Research from the Hackett Group indicates that chief procurement officers (CPOs) will invest heavily in advanced analytics solutions in the coming years.

We know AI, ML and RPA are on the rise — but what will these developments herald in the next era of ProcureTech? Let’s review the industry movements that procurement leaders should prepare themselves for as soon as possible.

AI will provide tangible cost benefits

According to industry research, the global AI market is projected to exceed $1 trillion by 2029. Clearly, demand for AI-backed solutions has and will continue to skyrocket in the coming years. But why are these solutions so coveted?

Cost reduction and risk mitigation are paramount. These focus areas are always critical but especially salient during economically challenging times. Procurement operations seek technologies that provide a competitive edge and enhance business flexibility in this environment. This is where AI procurement technologies excel: According to Deloitte, mature AI solutions can facilitate and improve critical procurement processes like contract negotiation, strategy development, market and demand analysis, and supplier sourcing.

The AI-procurement market will mature and expand

AI technology is advancing rapidly, propelling market growth. Consider the evolution of Google Translate over the past decade. During that time, the engine’s natural language processing (NLP) and visual processing capabilities have improved dramatically alongside increasing data and reference points. Similarly, ProcureTech AI and ML solutions will evolve as the volume of supplier and sourcing data increases.

The expansion of the internet of things (IoT) and the availability of new AI configurations will create opportunities for early adopters and investors to establish themselves as leaders in their respective industries. Failure to embrace AI solutions may result in falling behind, ultimately leading to the dominance of a qualified group of ProcureTech leaders in the market.

AI will address data problems

Procurement professionals have long grappled with broken or siloed data architectures. As supply chain difficulties persist and minor delays cascade into widespread problems, the importance of accurate and robust supplier data increases.

Reduced access to raw materials tops the list of challenges for the supply chain in 2023, making supply chain agility and the establishment of contingency plans critical. To navigate these hurdles, comprehensive data platforms prioritizing clean data will become an essential component of the ProcureTech stack. Organizations neglecting such solutions — or relying on manually updated data platforms — will face supply chain blockages and delays.

Suppliers will work to improve their SEO

SEO optimization will become paramount as AI-based data platforms become more prevalent in the procurement industry. Leading suppliers will adopt standardized, SEO-friendly and machine-readable data, just as many transportation authorities did after the advent of Google Maps. In other words: Suppliers will work with AI platforms to create better data streams (or risk losing critical business opportunities).

This shift will enable leading data platforms to seamlessly ingest, extract and distribute vital vendor information to procurement professionals. Embracing this change and other AI-related advancements in procurement will foster greater transparency and mobility within the industry, even amidst geopolitical uncertainty and supply chain disruptions.

ProcureTech has come a long way, and the integration of AI and ML holds immense promise for the future of procurement. As organizations recognize the value of AI-driven solutions, the industry is poised for transformative growth. Embracing AI now will position businesses ahead of their competition, driving strategic decision-making and propelling them toward procurement excellence.

About the Author:
Brian Tarble serves as TealBook’s Vice President of Product.

Having spent the last 13 years as an accomplished, results-oriented product and technology leader in the SaaS space with a specific focus in data & analytics, travel, and procurement, he brings an exciting drive and determination to TealBook.

Most recently, Brian was the VP of Product & Strategy for the Intelligent Spend Management Group, responsible for data and analytics across SAP Concur, SAP Ariba, SAP FIeldglass, and SAP S/4. Prior to his role at SAP, he held leadership positions at Concur, TRX, and Oracle.

Subscribe to Industry Today