The future of procurement is expected to see a dramatic change that has not been seen in human history, especially given the dominance of artificial intelligence in all aspects of life, which has had a significant impact on forecasting the near and extended future of procurement, through the radical transformations that are taking place in this area.
All employees from private and government sectors within the field of procurement in different countries look forward to how AI is applied to it, how much it affects the future, and the benefits it will bring when AI enters the digital procurement market fully.
In this article, we will highlight the importance and benefits of AI on the future of procurement and how to apply it effectively within companies.
What are the benefits of artificial intelligence on the Future of Procurement?
AI generally solves mysterious or complex problems requiring vast human effort. This solution has developed the purchase of products, which have grown dramatically digitally in recent years.
AI will provide a lot of benefits for the future of procurement; here’s a collection of the most famous of these benefits:
- Extract and collect information:
Using artificial intelligence, any company or enterprise can improve decision-making within its procurement departments, providing many services such as collecting and analysing vast amounts of data and information about customers and suppliers, and then processing them, and getting insights into the future that cannot be obtained by traditional means, and in a shorter time.
Predictive analytics services are one of the best features of AI that helps the buyer, as they can anticipate future market changes by analysing historical data, thereby increasing the efficiency of the procurement and access team for sustainable development.
- Reduce costs and increase productivity:
Artificial intelligence reduces the time needed to buy by 25-60% and contributes to reducing the cost of processing purchases by 30-40%. This contributes significantly to profits.
In addition, it can operate permanently and throughout the day, thereby significantly increasing the productivity of sales and purchases, allowing employees to focus on tasks of higher value or that AI cannot solve.
- Increase the quality of work:
AI can raise the quality of purchasing managers’ tasks by decreasing manual work (the number of errors) and automating many procurement system tasks that need effort, time, and money to implement.
- Risk management:
Using AI, buyers become able to identify many problems they may not be able to encounter in the future, including financial risk recognition, transparency in systems, the quantity of inventory of products, third-party procurement (intermediary), etc.
This data helps to find out the approximate figure of the amount of money spent on purchases, know the position of the supplier from which the purchase was made, learn whether the production processes are related to environmentally harmful processes or not, and other important matters for buyers, and thus the ability to manage future risks to achieve higher efficiency purchases.
- Supply chain management:
The primary purpose of AI in procurement is to develop all levels of supply chains and prevent them from stopping. Here the question arises: How much more accurate supply chain information can I provide than human information?
For example, if electronic communication is difficult within an enterprise or company, the various risks that may affect the digital supply chain must be considered.
Analytical tools in AI can identify several back-ups and suitable supply chains for various local company operations and projects so that discontinued chains are converted into these chains when warehouses and stores are free of required products.
Using AI in procurement can also determine the terms of contracts that production companies agree to choose the appropriate supply chain (such as price or place of production), thereby reducing the time and effort of employees or purchasing managers when selecting a good supply chain.
One of the great uses of AI in procurement is that it identifies corporate PR managers for any malfunction that may occur in the supplier’s business that contravenes their contract.
- Help create a successful procurement plan:
AI provides significant assistance to procurement staff in creating a successful procurement plan and developing the procurement system electronically, as it identifies the materials, decisions, and factors to be taken into account when building or designing a procurement plan for any company and can also detect any new indicator that may affect the procurement system and management.
- Protection against fraud:
When an AI allows a buyer to choose the best supplier for their company, it also protects them from fraud, Being the most trusted supplier with a previous business and good reputation.
In addition, when AI is used to enter into procurement contracts, the legal protection of the future of procurement increases, which helps bring growth and sustainability to companies.
How do we apply Artificial Intelligence in purchases?
When AI is often applied to purchases, its results appear in two to three months. Still, provided that its implementation is successful, the procurement data is structured and specific, and the procurement experts’ expectations are logical and rational.
The Artificial Intelligence procurement market can be entered by following several steps, namely:
- Determine where and when you can use AI for purchases.
- Identify what AI analysis techniques and tools are suitable for your company.
- You may need to teach staff in the Procurement Section how to use these tools and techniques, take your time bringing in experts to teach them, and your effort to teach them yourself may be enough.
- Follow changes in your company’s purchases and respond to inquiries from your employees.
- Enhance your employees’ artificial intelligence skills.
- Remember that once you introduce AI systems to purchases and incorporate them into your company policy, the above benefits will come to the company, but of course, you need time.
In conclusion
everyone recognises that the future of procurement with AI will inevitably flourish, so all companies provide job opportunities for people with AI-based procurement skills, both now and in the future.
So to master these skills, you can attend procurement training courses in London, which in addition to skills, will give you a lot of practical experience in AI procurement.
