With today's modern technology procurement professionals are increasingly turning to new innovative technologies and platforms, like Fairmarkit, to streamline everyday operations, optimize decision-making, and drive strategic value. The main push to start modernizing and reshaping the procurement processes has come from a need to reduce manual tasks and gain more direct insight into how you select suppliers as well as make decisions. With the introduction of tools like AI, the ability to modernize and automate many of those manual processes has become easier than ever, allowing procurement teams to start autonomously sourcing. By harnessing the power of AI and Automation, organizations can unlock new efficiencies, enhance collaborations, and gain a competitive advantage in the marketplace. But what is AI and how does it drive automation and how are they directly impacting and benefiting the procurement process?
Understanding AI and its ability to empower procurement
When many of us hear the term AI we think of futuristic technology that we see in movies and pop culture that can solve problems on their own without being fed data. It has a level of artificial general intelligence and can perform tasks without being asked to, showing its ability to act intelligently. Examples would be characters like Jarvis from Iron Man or C-3PO in Star Wars. Both of these can act without being given instructions, as well as have emotional processing capabilities. As cool as it is to see in movies, this AI capability doesn’t exactly exist yet.
Today, the AI we experience is called narrow or weak AI and extends to a lot of the tools we use every day. Siri, Google Assistant, and Alexa are probably the most notable examples of AI processing technology that use narrow AI but platforms like Netflix and Spotify also use narrow AI to provide you with recommendations based on what you already like. Although they might seem futuristic, narrow AI focuses on performing a specific task based on requests and requires human interference to provide it with learning algorithms and relevant data in order for it to execute tasks. While it may seem limited, it’s actually still very advanced and has been invaluable to helping automate processes as well as analyze large amounts of data in seconds. In fact, without AI technology, automation wouldn’t exist. The two go hand and hand in many areas.
AI tools in the procurement space
Currently there are many different companies focused on bringing procurement into the future through various ways, but Fairmarkit’s main focus has been to leverage AI as a tool to bring autonomous sourcing to the forefront of procurement. In order to do this Fairmarkit has built its AI and automation based tool called KIT (Knowledge Intake Tool). KIT is the brain power behind all the automation and generative-AI capabilities on the Fairmarkit platform and is focused on helping streamline many of the operational processes.
So you may be wondering, how does this help in empowering procurement professionals or what is its real value in our platforms? Well, there are several ways in which AI is working to empower the procurement process, but here are four that are the most notable and helpful to users.
4 ways AI and Automation benefit users
Streamlining and efficiency
One of the most notable benefits of AI being implemented into procurement platforms is its ability to automate certain tasks and streamline processes allowing users to drive efficiency and agility across the entire process. This not only allows for quicker processing times but the ability for procurement teams to scale operations and accomplish more with fewer resources. By automating repetitive tasks and streamlining workflows, organizations can achieve significant time and cost savings, allowing teams to focus on strategic initiatives and value-added activities.
Improved decision making
Generative AI, or GenAI, revolutionizes procurement by empowering buyers to make better decisions with greater speed and accuracy. By processing vast datasets in minutes, GenAI simplifies complex information, providing procurement professionals with actionable insights to inform their decision-making process. This capability enhances decision quality and ensures alignment with organizational goals and objectives.
Greater cost saving
One of the most impactful ways that AI helps organizations is by helping curb rogue spending and optimize the procurement process. Through automating the procurement flow, AI can bring more spend under the management of the procurement team, minimizing other unnecessary expenses and helping to improve budget control. It also helps by leveraging key analytical capabilities, enabling organizations to identify cost-saving opportunities, and maximizing cost reduction and savings across the board.
Compliance
As organizations expand and operate across diverse regulatory landscapes, maintaining compliance with procurement policies, regulations, and ethical standards becomes increasingly challenging. AI mitigates compliance risks by ensuring that all procurement processes adhere to company policies, industry regulations, and ethical standards. By automating compliance checks and monitoring, GenAI enables organizations to uphold transparency, integrity, and accountability in their procurement operations.
Autonomous sourcing - the future of procurement technology
Looking ahead, the future of AI in procurement holds immense promise for shaping tomorrow's strategies and transforming the way organizations conduct their sourcing and procurement activities. As AI technologies continue to advance, procurement professionals can expect to see several key trends emerge that will redefine the procurement landscape, the largest of these being a rise in Autonomous Sourcing.
With the advancements in AI and machine learning, procurement processes will become increasingly autonomous, reducing the need for manual interventions. This means that AI-powered procurement platforms will become more capable of autonomously sourcing suppliers, negotiating contracts, as well as managing supplier relationships, freeing up procurement professionals to focus on more strategic initiatives throughout the company.
Not only has Fairmarkit been focused on advancing the features that allow you to get the most out of your production processes with the help of AI and Automation, but at its core it is focused on providing users the ability to start sourcing autonomously. Learn more about how your team could benefit from autonomous sourcing and all the other tools that our platform provides you today here.
