Editor’s Note: Did you miss yesterday’s webinar, The Procurement (and Sourcing) Technology Outlook for 2017? Do not despair, we recorded it for you to listen at your leisure. Click here to access or download. Note – Act Fast: The webinar will only available until the end of the year!
Ardent Partners’ recent research report, Sourcing and Procurement: The 2016-2017 Technology and Innovation Outlook Report, chronicles the evolution of sourcing and procurement technologies over the last two decades to where they are today and poised to go tomorrow. This report, which is chock full of great insights on many advanced, distinct sourcing and procurement technologies, has spawned a series here on CPO Rising that looks in depth at each of the innovative solutions coming onto the market today and in the near future. Today’s installment: artificial intelligence.
One of the outputs of machine learning is a greater understanding of user interfacing (UI) and how to improve user experiences (UX). But machine learning, powered by master data management, Big Data, and advanced algorithms, is on the cusp of delivering even more efficiency gains and insight to the end user. As discussed in the previous installment in this series, artificial intelligence (AI) is a natural extension of machine learning and is not-so-quietly preparing to take procurement, sourcing, and supply management to the next level of performance.
Artificial intelligence picks up where machine learning leaves off by going beyond UI to independently learn user behaviors and deliver solutions, like push notifications, alternative products or services, or route changes, directly to the user in the context of an application or platform (“in context”). Of course, data scientists will need to write the source code to power the algorithms that recognize end-user needs; and they will need to configure the systems to “learn” what, when, and how to deliver to them what they need. But beyond the initial coding and configuration, AI-enabled technologies will be able to serve the end user unprompted.
With AI-powered insights and value delivered “in context” to the end user, “smart” supply management solutions will be able to take over more of the mundane, tactical processes and execution and enable the end user to take on more strategic, value-added work, like long-term planning and relationship building. As a result, AI-enabled technologies will soon allow procurement teams to overcome resource constraints, scale resources, and “do more or better with same”. They will be able to conduct more sourcing events, process more contracts, manage more suppliers, mitigate more risk, and deliver more value to the enterprise (in the form of more savings, compliance, efficiency gains, and mitigated / avoided risk).
There has been a polarizing view of machine learning, artificial intelligence, and robotic process automation. On the one hand, there is the view that they are going to make lives simpler, perform the work that humans don’t want to do, and allow “knowledge workers” to reach their full potential. There is also the view that, at best, machines will make poor replacements for humans, and at worst, a dystopian view that they will take all of our jobs and morph into a Skynet-like overlord. The reality (at least in the near-term…) is that they are poised to deliver efficiency gains and time savings to the line-of-business while allowing Chief Procurement Officers and other enterprise leaders to do more with less or same. And there is nothing to fear about that.
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Tagged in: Chief Procurement Officer, CPO, Innovation, Matthew York, Process, Technology