A common theme in science fiction is robotics; robots and artificial intelligence (AI) have captured our imaginations, our hopes, and our fears time and time again. While it is obvious that robotics will play a massive role in shaping the future, we can already see certain changes affecting us today.
Rather than consider the distant future, I want to focus on what automation and AI can do to improve procurement right now. Mobile, big data, and cognitive computing are trends that frequently overlap and will create the foundation for virtual assistants that are always available to help, no matter where we are. Cognitive procurement represents a future built upon efficiency and convenience. Through the acceptance and adoption of automation, your businesses can prepare for the future while also experiencing significant procurement advancement immediately.
What is cognitive procurement?
Thanks to new technologies, cognitive functions allow computers to perceive the world, analyze and understand the information gathered in a certain way, and then behave in an informed manner. When working in combination with business expertise, these IT solutions lead to a variety of valuable options, including machine learning applications, natural language question answering, and intelligent virtual assistants.
When cognitive computing is applied to procurement solutions, the result is cognitive procurement, a process in which computers use data mining, pattern recognition, and natural language process (NLP) to mimic human activity concerning procurement processes. This cuts down on a great deal of manual work that would otherwise be required, cutting costs for your procurement team while also making it more efficient.
How to implement cognitive procurement
Cognitive procurement begins by automating repetitive procurement tasks. By applying automation to the correct activities, work is completed faster while human workers are able to focus on more strategic assignments that a computer cannot handle alone.
For example, the Maersk Group used Holger, a virtual robot, to price 9,000 articles in 300 different ports. This process, which normally takes a human around 4.5 hours to complete, took Holger 30 minutes. Simple but repetitive tasks such as this can be handled by automated workers much faster than a human, giving your human employees more time to spend on demanding tasks.
Of course, simple repetition is not the limit of cognitive procurement solutions. With more development, the virtual procurement assistant is the next step. This agent will serve as a centralized, digital help desk that will receive communications from employees that need buying assistance and respond effectively through a chat interface. The virtual assistant will respond using natural language while also interpreting unstructured text, meaning that the agent will understand language elements such as synonyms and some non-standard phrasing. Furthermore, when unable to completely understand a message, it will ask clarifying questions to ensure a successful resolution. As a result, the virtual assistant will have nearly the same skills available to a human agent but will provide true 24/7 accessibility.
The future of cognitive procurement
In the short term, procurement executives are already targeting numerous processes for the adoption of automated systems. Within the next five to seven years, you will see cognitive procurement in areas such as:
- Setting up and conducting requests for proposals
- Finding relevant suppliers
- Catalog maintenance and approval
- Evaluating suppliers’ performance
- Creating cost models and industry cost curves
- Report generation, analytics, and advanced modeling
- Order fulfillment, logistics, picking, and packing
Further down the line, we will see cognitive procurement agents shoulder strategic advisory roles. They will be able to handle a massive amount of data concerning a company and use it to create informed recommendations. For example, big data and analytics technology could suggest appropriate mitigation strategies for potential risks.
Agility will determine future success
There are four major technology trends that will help transform procurement in the years to come: the continued move to the cloud, the internet of things, big data, and cognitive procurement. Each of these will lead to major developments within procurement, meaning that your organization needs to start taking these trends into account when defining your procurement strategy for the future. Top performers will leverage these new technologies to achieve a competitive advantage with far-reaching results.
As more and more technologies previously only seen in science fiction become reality, businesses that have prepared in advance to adapt will succeed and lead the future of procurement.