As headlines keep persuading us, artificial intelligence (AI) is apparently going to take over the world. The digital revolution has caused transformation in virtually every department of every business in every sector.
Very recently, talk about AI centered around what we could expect in the future, but the truth is the future has arrived and AI is already everywhere. From chatbots to driverless cars and targeted advertising – this technology is already in use in our daily lives. And it has a very important role to play in helping businesses improve their processes – procurement is no exception.
Here we outline some of the biggest challenges facing procurement departments today and how technology is the answer to overcoming them.
1. Risk management
Third party risk is still one of the biggest issues facing procurement professionals in 2019. Cybersecurity threats, fraud risks, reputation and brand image consequences, and compliance issues abound in this fast-paced, global business network.
Accurate data collection is imperative for due diligence. Harnessing business insights is increasingly important to mitigating risk, but organizations face challenges in achieving true insight when their data is held in disparate systems.
Using automated solutions that manage data and workflow to monitor and report problems can save companies time and money, and ultimately impacts the bottom line as well as risk management and compliance issues.
2. Managing Globalization
Growth in international trade is not about to slow down, and the challenges facing procurement and supply chain teams are only going to become more complex. Technology has helped to overcome communication challenges, but eProcurement is the answer to fostering global collaboration. A standardized vocabulary and data collection system are invaluable to provide real-time, accessible insights into the buyer-supplier relationship, no matter the language barrier or the geographical distance. Technology makes the world a smaller place.
3. Managing maverick spending
How do you solve a problem like uncontrolled spending? Visibility is the only way to harness control over your corporate spend, and data is the only way to achieve that visibility. It is crucial that your organization can access real-time data across the supply chain. Automating spend management is a natural step for any procurement department looking to ensure that all spend categories are managed as effectively as possible.
4. Managing corporate social responsibility
Socially responsible procurement is a hot topic in the world of supply chain management, and securing the highest possible standard of sustainability for all new contracts is a high on the agenda for corporations who understand their CSR stance directly impacts their commercial successes in today’s hyper-aware buying climate.
With CSR criteria built into the RFX and tendering process, businesses can do their due diligence at the front end of a deal, assessing the market and potential supplier’s suitability for meeting sustainability targets before any negotiations take place.
Automation is essential, not just inevitable
The digitalization of the procurement function is not a goal, but a process that all procurement teams must undertake to assist their role as drivers of efficiency and value across the entire business. AI can leverage big data, streamline processes and facilitate decision-making.
It is essential that businesses have the infrastructure that eProcurement solutions can provide to assist them in establishing the foundations for integrating AI into their procurement practices. WIthout the right eProcurement platform underpinning their processes, collecting, collating, categorizing and storing the right information in secure, analyzable, reportable systems, no organization will be able to extract value from AI. Smart P2P solutions, integrated and deployed throughout the entire business are essential for organizations who want to utilize automation to drive their business forward.
ProcurePort is an industry-leading provider of eProcurement solutions. Get in touch with us today to tell us what we can do your business.