There’s hardly a single industry today that hasn’t been impacted by smart technology in some way. The accessibility of technology within our personal lives has driven similar expectations within businesses – and the procurement and payment space is no exception.
A recent study by The Hackett Group found that 30 percent of procurement leaders expect processes to be digitally transformed this year. Moreover, 95 percent believe digital transformation will change the way their services are delivered within the next few years.
At the forefront of this digital transformation is artificial intelligence (AI), machine learning (ML) and virtual assistants, which stand to improve the overall experience for procurement professionals in three main ways:
1. Ease of use
AI is a powerful emerging technology that is transforming business software systems across industries. One branch of AI with the potential to transform procurement is natural language processing (NLP), or the ability for a computer system to effectively process human language.
Much like Alexa and Google Home, conversational AI has entered the purchase-to-pay space in the form of AI-driven chatbots to create a simple way for end users to follow purchasing policies and buy from contracted vendors.
These virtual assistants use NLP for easy communication, moving beyond unhelpful automated messages to intelligent functions that can listen, understand and even get smarter as they communicate with humans. Going a step further, the power of AI can be seen in its ability to provide real-time predictions and recommendations to users based on what they’ve searched for or purchased in the past.
Just as virtual assistants are making procurement software easier to use, they’re also driving greater efficiency. With advancements in AI, and NLP in particular, virtual assistants can help save time and eliminate the need for users to go back and forth with each other on questions that a chatbot can easily answer.
Invoice processing is another function that can benefit from smart technology. This means that invoice data can be extracted, validated and augmented automatically through a range of different technologies like deterministic algorithms, machine learning and optical character recognition.
The use of machine learning to automate invoice processing can be particularly powerful for automating exceptions and transactions beyond the traditional methods. Machine learning can eliminate the need for humans to manually code invoices when there is no purchase order matching an invoice. Automating the execution of repetitive tasks helps procurement teams improve process quality and reduce human error, ultimately driving greater efficiency for the business.
3. Cost savings
Through these efficiency gains, procurement departments can lower their resource loads and costs. Not only that, the very nature of smart technologies and how they work can also contribute to cost savings.
In order for technologies like AI and ML to be effective, procurement leaders must ensure they are capturing all transactions. By capturing all invoices and consolidating all purchase order information to single platform and analyzing it, procurement professionals can identify specific areas for cost savings across their source-to-pay process. Thus, turning their data into a competitive advantage.
Making procurement smarter
There’s a lot of buzz around smart technology, but it’s not all hype. Procurement organizations have already begun to leverage these technologies today, with 38 percent piloting robotic process automation technologies while 31 percent explore and cognitive computing and AI. No doubt, it will continue to drive business value across even more organizations down the road.
There is great opportunity for technologies like AI, ML and NLP to transform the way we manage procure-to-pay processes. From opening the door to virtual assistants that simplify ease-of-use, to creating touchless invoice processing that enables humans to focus on more value-add tasks, it’s an exciting time to be working in the space.