Artificial intelligence (AI) is built on teaching computers to mimic human behavior. The technology works as a result of programming and algorithms. Artificial Intelligence allows digital-first organizations to cater to complicated difficulties using data and algorithms for on-demand procurement.
The three areas where AI algorithms are constructive are understanding analysis, contract management, and strategic sourcing. Reports by Deloitte have concluded that as many as 45% of Chief Procurement Officers make use of AI-powered software in their procurement cycles. According to a Deloitte analysis, projects that utilize AI spend classifications have achieved data categorization accuracy of roughly 97%. Accounts payable automation is another prominent application of AI technology in on-demand procurement by digital-first businesses.
Studies proved that the global yearly value of VC investments in AI businesses surged from $3 billion in 2012 to over $75 billion in 2020. Last year, funding climbed by 20% for such companies based in the United States and China, receiving over 80% of all investments. As presented by AI and Analytics startup investment study, as of July – August 2021, the Indian Artificial Intelligence market is worth 7.8 billion dollars. Over 2020, this represents a 22% rise in market size. In India, the Data Science domain, mainly the AI function, is transforming into a cutting-edge business segment.
Domestic, healthcare, advanced engineering, MNC technology, and semiconductor firms are now developing advanced AI capabilities in India and providing top-notch AI services to firms across various industries and geographies and are being rewarded with significant investments from both internal and external funds.
Proper management of the supply chain requires data-driven insights and an analytical understanding of the complexities of procurement. One of the primary ways digital-first companies use AI in demand procurement is supplier risk management. The methodology can be utilized for screening thousands of data sources at one go and providing reports and alerts through risk management software.
Here are some technologies aiding businesses to transform themselves through Artificial Intelligence to drive on-demand procurement-
Artificial Intelligence and Machine Learning – The amalgamation of artificial intelligence with machine learning have been responsible for the effective finance and accounts management of a company. The automation software used by companies has enabled easy detection of fraud and systematized payment workflows.
Source-to-Settle Technologies – Adopting the source-to-settle (S2S) technologies has helped meet two primary demands of digital-first companies – risk mitigation and cost reduction when dealing with procurement-related issues. This is possible because of the clear and comprehensive data structuring available in large volumes.
Networking and digitization – By the middle of 2021, most businesses are expected to have transformed into AI-based businesses. The ability of AI to improve network performance will also play a key role in its mainstream adoption. AI-powered technology will aid IT and network security employees in safeguarding networks.
Artificial intelligence resolves problems using machine learning techniques. Furthermore, shortly, AI-powered VPN routers will become more ubiquitous. These routers use machine learning techniques to protect data and secure the system through enhanced security settings.
Data Highways – Both businesses and users, have recognized the significance of data. The volume of data produced is growing at lightning speed. AI-based tools and solutions have improved data analysis, corporate statistical analysis, and predictive analytics deployment.
However, some companies have still not been able to drive value for their business because of the pressing need for innovation in the procurement processes. But it is essential to observe that recent advances in the three key areas: pattern recognition, natural language processing (NLP), and cognitive analysis, have facilitated better decision-making through valuable insight and performance data.
Digital-first companies have observed several benefits by harnessing AI technology for procurement processes. One of the enormous benefits has been that it has identified potential suppliers and new markets to enter and create a brand presence.
Altogether, AI-driven software has helped improve internal business operations by streamlining processes and strategically capturing the data sources. The AI market has potential benefits that can drive growth for several digital-first companies. But it is only possible to achieve this when companies understand the relevance and the ideal ways to drive and implement the technology.
– Nishant Behl is the CEO and Co-Founder of Expand My Business, a B2B full-service marketplace for all the digital needs of a business