Services spending will be the next procurement sector that will see tremendous changes as AI applications are poised to make an impact.
Elaine Morris Roberts explains how AI can transform procurement in this report for SpendMatters:
In procurement, one significant aspect of the digital transformation allows companies to discover and vet otherwise hard-to-find niche firms or workers to fulfill specific business objectives. It’s no longer necessary to accept the available but “not-exactly-what-I-need” solution from an incumbent supplier. The integration of AI into sourcing services for labor-driven markets allows companies to pinpoint resources they could only guess at before, balancing requirements around cost, geography, skill sets and length of engagement.
Another aspect is being able to better forecast resource requirements. In certain sectors, the numbers of workers needed can be determined by such specific data points as the price of commodities or weather patterns. Exacting worker forecasts can be made, then those workers can be sourced on-demand via digital tools. In the past, a reasonable guess had to be made, then traditional staffing firms went to work.
Specifically when procurement-as-a-service programs combine technology and staff to determine worker needs, it uncovers where money is being spent and where savings can be realized. By analyzing data and using digital staffing platforms, procurement is empowered to seek out subject-matter experts to provide services.
By embracing sourcing technologies, procurement professionals can enlist these experts on an as-needed basis, moving away from large recurring contracts with incumbent firms. And once the department’s repetitive tasks have been automated, the procurement staff will then have time to manage supplier relationships and seek out new avenues for services and talent. They can also become their own subject-matter experts in data and analytics within their departments and companies. This can lead to identifying even more cost-savings opportunities and better managing risk.