Procurement officers used to trend conservative in their decision-making. Making a bad decision was to be avoided even if delays ensue. But in today’s business climate, agile procurement is taking over. Consultants like The Hackett Group now call agile procurement “critical development zone for procurement teams in 2019.”
Emma Cosgrove identifies four key technologies that would redefine procurement in this article from Supply Chain Dive:
Agile procurement is playing offense and defense. Maintaining good supplier relationships while always having a plan if sourcing needs to shift. Anticipating disruptions before they arrive. Shifting quickly and decisively when need arises. Failing fast and learning fast. For some organizations, agility represents a completely new way of thinking, and this cultural shift can’t be foisted upon a procurement team overnight.
Technology can help build the scaffolding for faster moves that are still smart and strategic. According to A.T. Kearney, most “routine procurement processes” will be automated within three to five years.
Four emerging technologies can convert this speed into the agility the procurement function needs.
Machine learning. A fundamental tool for speeding up procurement processes is machine-learning powered virtual assistants. Whether in the form of chatbots or prompts within tasks, machine learning can help procurement officers push tasks forward, catching errors and inconsistencies as it goes.
Natural language processing. Natural language processing is another form of AI that can read text and decipher meaning. The procurement process is full of text-heavy documents, agreements and conditions. Reviewing supplier contracts quickly is a key task needed to get goods moving, and language processing software can reduce this time by flagging suspect clauses.
Robotic process automation. RPA can make one event or finished task automatically trigger another. If the machine learning algorithm spots a problem with a contract, RPA can send it to legal for analysis, without the need for humans to send emails.
Big data analysis. Big data analysis can take massive amounts of data from disparate sources and turn it into actionable insights based on historical outcomes in the context of hypothetical scenarios.