How AI is Improving the Guided Buying Experience of E-Procurement Users
While still in early stages, the exciting category of artificial intelligence (AI), which includes subsets such as machine learning and predictive analytics, is starting to have a profound effect on procurement. In particular, AI is helping buyers improve purchasing efficiency while helping companies overall gain the insights they need to improve in areas such as finance and risk management.
Increasingly, AI is being incorporated into e-procurement platforms, which helps companies more easily adopt this technology rather than needing to find a way to incorporate it on their own. When integrated into these platforms, e-procurement users can improve the guided buying experience in the following areas:
1. Strategic Purchasing
E-procurement platforms that leverage machine learning can learn your company’s preferences and behaviors over time to either automatically make purchases or to suggest products and services based on your requirements. With this technology, buyers can make purchases they might not have otherwise come across. This benefit is similar to how media streaming platforms might learn about a user’s preferences to suggest content that the user might not have otherwise found or thought to try.
2. Automated Data Management
The rise of e-procurement platforms has coincided with an increase in data capabilities, which ultimately is what powers AI. All purchasing data within these platforms or through linked payment methods can be automatically captured and filtered to the appropriate area. And in addition to using data to make purchasing recommendations, this data can be used to analyze spending patterns by department, flag purchasing errors such as duplicate orders, and more.
While in many cases staff still need to work with purchasing data to make the most of it, AI within e-procurement platforms can increasingly analyze the data on its own to then make corresponding recommendations, such as by spotting unusually high purchasing activity from certain departments to then implement tighter budget controls. As McKinsey explains, “Advanced analytics and automation create better, faster insights that dramatically increase the value Procurement can generate, with external resources and innovation bringing even more insights and capabilities to the business.”
3. Predictive Compliance
With automated data management can also come predictive compliance, where potential issues such as fraudulent spending are automatically flagged based on unusual purchasing activity. This process is similar to the way a credit card company might notify you of suspicious purchases that don’t fit your typical spending behavior. Conversely, AI can also be used to identify when purchases fit within a company’s compliance controls, thereby allowing purchases to go through seamlessly. As a result, e-procurement users can have a smoother buying experience, as they don’t have to always wait for manual approvals for every purchase. Meanwhile, compliance teams can gain assurance that they have an additional layer of security in the event something falls out of line with a company’s purchasing activity.
4. Automated Supplier Management
If an e-procurement platform captures data on suppliers such as delivery accuracy and can analyze prices across vendors, the system may also be able to help with supplier management. For example, AI can help a buyer determine what prices to negotiate with vendors, based on information such as what competitors are charging, how efficient the supplier has been with completing orders and the company’s projected purchasing volume going forward. An e-procurement platform may even be able to use AI to automatically create RFQs or other related forms necessary for working with suppliers.
As AI improves, buyers and overall companies can increasingly gain the data they need to optimize purchasing, compliance, budgeting and more. Those who take advantage of this technology at an early stage not only gain additional insights but can free up time to allow staff to focus on other value-added activities, thereby gaining an advantage over competitors. And once AI becomes more ubiquitous, these early adopters will benefit from already knowing how to integrate this technology into their processes, with staff who know how to work well alongside AI.
To learn more about how your procurement team can benefit from using AI to improve the guided buying experience, schedule a demo with GoProcure today. You can also read more about how our platform improves the full procurement lifecycle.