Artificial Intelligence (AI) in Procurement

Abstract

Artificial intelligence has been a buzzword for quite a while now. However, of late, this technology is gathering more steam, thanks to path-breaking inventions happening across industry verticals by using natural-language (NL) processing, social intelligence, inductive logic programming, etcetera. In procurement, technology innovators have come up with cognitive procurement advisors (CPAs) and virtual personal assistants (VPAs) that use NL; these will help to increase automation and efficiency in the procurement space. This paper will give an overview of various applications of AI in a Procurement Organization and its impact on the future of procurement. This paper will also touch upon the challenges in implementation of AI and provide a roadmap for implementing AI. 

AI - The 4IR (The Fourth Industrial Revloution) 

Artificial Intelligence is being hailed as the fourth industrial revolution and is expected to transform the lives of people and the way businesses operate. This revolution is expected to raise income levels and improve the quality of life for millions across the world. But how will this impact the business and particularly Procurement Organizations. AI purists claim that it is a miracle, which would drive supply-side innovations, as well as drastically improve efficiency and productivity. Let us take a realist view and discuss this in detail.

AI in Procurement

At present, Procurment Organizations’ use of AI applications is limited to areas such as spend analytics and contract analytics, to identify savings or achieve greater efficiency. But they are yet to realize and utilize the true potential of AI in procurement, and unless they do so, no significant value will be created for their organizations.