According to Touch Display Research Augmented Reality (AR), Virtual Reality (VR) and Artificial Intelligence (AI) is estimated to be worth $160 billion in 2022. These types of technologies are already simplifying people’s lives. Gadgets like Amazon Echo or Google Home are helping people with their day-to-day tasks and the potential for business application could be a game changer for many organisations.
Procurement is one of the most obvious functions that could harness this emerging technology and reap the obvious cost and time saving benefits. Here’s some examples of how procurement could use emerging technology in its daily tasks:
Augmented Reality and Virtual Reality
Every supplier has warehouses and stockrooms full of the items they sell, so imagine if all their customers could see those stockrooms as if physically there, exploring all products in detail before making any buying decision, but remotely from their desk.
Usually ordering new goods from catalogues, even from the better catalogues with clear product images and full descriptions, will always be prone to potential buyer mis-ordering, with the buyer only realising their oversight at the point of delivery. Virtual stockrooms can minimise this risk, allowing the buyer to inspect and examine the product much more closely before a purchase decision. The upsides for procurement here is clear, reducing time wasted on chasing returns and refunds.
AI can play a very useful role in spend reporting. We’ve all been there, searching through numerous documents to figure out the information we need for a meeting or a report. And even when spend reporting systems are in place to provide the information more readily there are scenarios where key spend data is needed at the last minute, and when using the reporting tool itself is the barrier to getting fast figures at your fingertips. What if you could ask your PC or your tablet how much was being spent on a product category, by a business department, in a specific period, by simply asking it with a voice command? AI has the potential to interact with purchasing systems to give the user that level of convenience.
Sourcing is another area AI could help. Procurement teams are often tasked with finding new suppliers at short notice, for a wide variety of goods and services, and often with complex criteria for consideration. Whilst sourcing software can drastically reduce time and effort to find the right supplier that fits the bill, wouldn’t it be great if AI could analyse numerous suppliers at once and make recommendations about which suppliers to approach? And with the right data AI can not only compress sourcing timescales, but the onward onboarding and purchasing processes too.
AI can also be used to help make sure your organisation better manage supplier relationships, ensuring that invoices are ready to be paid on time, based on their specific payment terms. AI can be used, based on previous data patterns and set parameters, to ‘supervise’ how actions are carried out, ensuring they’re done so in line with an organisation’s buying policies and guidelines, minimising errors within the purchasing cycle and subsequent non-payment risks.
In recent years new technology has changed the way organisations operate, and it looks like more change is ahead with the likes of AR and AI. Some businesses, and some business functions, may struggle to see the potential value to them in their world, but in procurement the brave and the bold that can figure out how to apply it to their processes will surely help their business gain a welcome competitive advantage.