Procurement functions play an important role in today’s enterprises, responsible for sourcing, supplier management, and cost optimization. However, the procurement landscape is continuously evolving, presenting both challenges and opportunities. Enterprises are increasingly using new technologies to gain insights and uncover hidden opportunities in procurement processes, as they work to improve efficiency, cut costs, and improve supplier relationships. The goal is to enhance procurement excellence, automate processes, and identify areas where generative AI solutions can add value by augmenting the workforce and expanding process automation.
In this post, I explore how KYP.ai’s Productivity 360 platform can uncover openings for generative AI solutions, acting as a guide to hidden automation and augmentation opportunities.
The Changing Landscape of Procurement
Today, enterprise procurement is experiencing more complexity than ever before with challenges such as supply disruptions, trade barriers impacting the flow of goods, and a growing need for sustainability and ethical practices. Procurement professionals are tasked with an ever-increasing set of responsibilities, from managing supplier relationships and navigating regulatory compliance to always-in-time demand forecasting and optimizing costs. Each of these responsibilities is complicated in its own right. Together, they form a formidable set of challenges that require innovative solutions to address. Capabilities that help procurement officers deal with the challenges should deliver process insights and analysis for data-driven decision-making to address issues as well as drive efficiency through automation.
Enter Productivity 360: Unveiling Procurement Process Insights
Productivity 360, a powerful technology that leverages process discovery and data analytics, is a game-changer for procurement functions. It involves the automatic capture and analysis of user interactions with various software applications and processes, as well as the impact of IT hardware and network infrastructure, to uncover the “as-is” processes within an organization. The resulting insights offer a 360 degree top down view of what really matters. The insights can be further drilled into for a more granular understanding of how procurement tasks are executed, where bottlenecks occur, and where inefficiencies lurk. Consequently, Productivity 360 can play a pivotal role in procurement as follows:
- Process Discovery: Productivity 360 uncovers the end-to-end computer-based procurement processes, shedding light on each step, from requisition to payment. This visibility is crucial for identifying areas that can benefit from optimization and AI-driven automation.
- Bottleneck Identification: By analysing user interactions, Productivity 360 pinpoints bottlenecks and where delays occur and by implication, where a lot of manual intervention is needed. This knowledge helps in prioritizing processes for improvement and automation.
- Data-Driven Insights: Productivity 360 generates data-driven insights, allowing procurement professionals to make informed decisions and create a solid foundation for AI-driven solutions. The insights can be used to build an operations dashboard that enables informed decision-making and allows actions to be taken pre-emptively to avoid issues such as delays in orders.
- Identifying Opportunities for Process Automation: Productivity 360 can identify opportunities for process automation, including the use of generative AI in procurement, that as well as automating content-related processes, such as product descriptions, can produce analytics to provide context from a broad set of information sources to lead to more actionable real-time insights for informed decision-making.
Finding Opportunities for Generative AI
Process intelligence provided by KYP.ai’s Productivity 360 platform can first identify opportunities for automation of business processes with generative AI, and then build the business case for the automation.
The platform helps to generate a digital core for the generative AI solution, as well as track the success of the implementation. Consequently, the outcomes can be used to support the business case for more investment and more applications of generative AI solutions to transform procurement functions. Examples include:
- Requisitioning: Generative AI can automate one of the most important set of activities in procurement and that is requisitioning and ordering processes. It can eliminate manual data entry and provide better visibility into processes to improving efficiency, save costs and reduce errors. Examples of what it can automate include:
- The production of RFQs
- Embedding and inclusion of local requirements, such as regulations and supplier availability, in the requisitioning process
- Inventory analyses and forecasting for data-driven determination of quantities
- Supplier Communication and Negotiations: Generative AI can augment routine supplier interactions, such as preparation of communication and messages, and order updates. Consequently, it frees up procurement professionals’ time to focus on more strategic activities and improve supplier relationships.
- Spend Analysis and Cost Optimization: Generative AI working with intelligent document processing solutions can assist in spend analysis by automating information capture from invoices, contracts, and receipts. This can improve accuracy and efficiency, leading to cost savings.
- Inventory Management: Generative AI can optimize inventory replenishment strategies, ensuring that the right levels of stock are maintained to meet demand without overstocking. This can improve customer satisfaction and reduce costs.
- Regulatory Compliance: Generative AI can help automate compliance checks and documentation, by reviewing content for compliance and suggesting changes to the text. Accordingly, it can reduce the risk of fines and penalties.
- Supplier Collaboration: Generative AI can automate document sharing and routine interactions with suppliers, improving collaboration and efficiency. This can strengthen supplier relationships and lead to better outcomes.
In the ever-changing world of business, procurement must evolve and embrace new technologies to stay ahead of the curve. Productivity 360 and generative AI are a powerful duo that can transform and optimize procurement operations. By shedding light on inefficiencies, pinpointing opportunities, and implementing AI-powered improvements, businesses can achieve procurement excellence; lower costs, strengthen supplier partnerships, and make decisions guided by data.
Schedule a demo to discuss how Productivity 360 can act as your compass to lead you to hidden gems of opportunities for applications of generative AI in the procurement function.