Businesses spanning across all sectors and industries are having to instigate sudden transformation in order to survive in today’s shifting geopolitical and economic climate. Within the retail space, we have already seen the warning signs from players like BHS, Toys R’ US, House of Fraser who have been slow to react to the commercial landscape.
Many companies are looking towards new technology as a means to reinvent their business processes and improve efficiency. However, despite clear evidence of the benefits of this strategy, some areas of innovative technology are still treated with caution.
Artificial Intelligence (AI) is a good example of new technologies that can bring immediate efficiency improvements, yet are viewed with some scepticism.
When applied correctly within a business, AI has the ability to reduce costs, increase efficiency, and help businesses target their core markets more effectively. Expanding into new territories, accelerating data analysis and informing key business decisions are just a few examples of where AI can transform business operations. For companies that understand this kind of technology, AI is being seen as a practical tool that can make a strategic impact.
Taking a tactical view, this same AI-driven technology can instigate a more streamlined approach to automate routine decision-making, freeing up employees to focus on more complex tasks. Time-consuming transactional elements of employee roles can be automated through AI, so teams can achieve more at a faster pace, without compromising the individuals in the team by imposing longer hours or stretching teams too thin.
However, despite these strategic and tactical benefits, some organisations still see AI as a nebulous concept and a potential threat to job security. It can be seen as a challenge to existing, established business norms, and also potentially as a distraction from the company’s core business objectives. As the digital revolution becomes more mainstream and AI becomes more recognised and applied in the market, businesses are realising that these bubbling concerns are more like myths and are largely unfounded. They are seeing that the application of AI to accelerate routine tasks is likely to increase and become as accessible in the commercial market as it is in the consumer space.
AI for procurement
The procurement function is unique in its ability to influence and drive change across a business - and to do so from within by promoting new ways of thinking and behaviours to maximise efficiency and optimise spend. In procurement AI solutions are already delivering tangible benefits impacting the bottom line.
Using AI to optimise operational spend, particularly services spend, is leading to huge commercial benefits. This can be seen in the tendering process, in data analysis and in supplier management within indirect spend.
For example, when we look at the time-consuming nature of the tendering process for business services, specifically in the vetting and shortlisting of suppliers, AI-driven systems have the ability to anonymously match the commercial needs of corporate buyers with service providers that are fully attuned to their project briefs.
For globally recognised businesses, this anonymous element in sourcing can immediately impact costs, often reducing elevated proposal figures that have been put forward to buyers within major well-known enterprises. We have seen many examples of companies receiving inflated quotes for key business services, simply due to the stature of their brand. Anonymising the brand through AI-driven online sourcing removes this risk and provides a much more balanced, fair playing field for corporate buyers in these companies. Given that these AI-driven corporate buying solutions are generated by procurement, the procurement function can be seen as a more strategic player within organisations, shifting from its former reputation as a back-office purchasing role.
Another example of value can be seen in accelerated data analysis. AI-driven solutions, by nature, mean that organisations applying this technology to their business are always learning and adapting through the historical data that they maintain. Because these technologies are always learning, AI systems are able to quickly spot weak points in the buying process and highlight which areas may need human attention or investment. They can do the heavy lifting of routine activities to catch compliance issues and flag possible errors, so that human intervention can be applied exactly where it is most needed.
This automated vigilance is not just a benefit for large corporates, but also for small and medium-sized enterprises where incremental efficiency improvements can lead to significant savings. As a result, companies of all sizes are looking at their buying behaviours in conjunction with their overarching commercial objectives and exploring ways that AI can help them meet their targets.
Intelligent B2B marketplaces are helping the procurement function access and leverage AI without having to do full restructures within their company’s operations. These global end-to-end platforms not only enable procurement teams to source new and innovative suppliers, but also manage the delivery of projects. Imagine having AI-driven support to augment rigorous vetting procedures, contract design, negotiation and payment schedules.
This marks a stark departure from more traditional procurement practices. Less than a decade ago, companies hoped to find and evaluate the right suppliers using a finite vendor list in order to meet their needs, but marketplaces like Maistro can now accelerate the procurement process by greatly reducing the number of interaction points across suppliers, giving corporate buyers a swift, compliant and simply buying process.
Using AI-backed marketplaces ensures that any suppliers shortlisted are the most suitable for the project and meet the specific parameters set by the buying customer. Given digital online sourcing, suppliers can be sourced from anywhere around the world. For example, a company in Manchester looking for marketing support for an upcoming event could have its project fulfilled by a supplier in Malaysia, if the Malaysian supplier was the best match for the brief - in skills, experience, budget and delivery timelines.
In addition, as we mentioned earlier, the more AI systems are fed with historical and new data, the more they learn. This is worth consideration when looking at corporate buying processes. A few years ago, businesses would have largely stuck with the legacy organisations that they knew and had used before, regardless of quality or fees. By working with a trusted online B2B marketplace, however, corporate buyers can move beyond limited suppliers lists, extending their reach dramatically to a global pool of potential suppliers.
AI to innovate
In the main, businesses are being forced to do more with less, which means that organisations need to find new ways to balance cost pressures with their need to grow. Without a doubt, businesses operations must continually evolve to survive and compete as our worlds become more digital. Optimising the process of sourcing and procuring suppliers to deliver business services is naturally part of that process.
AI provides the opportunity to instigate change and is already accelerating procurement. Companies that opt to augment their work flow through AI will benefit from faster access to more innovative suppliers, leading to improved efficiency and optimised spend.
Mark O’Shea, CTO, Maistro PLC
Image Credit: Geralt / Pixabay