Procurement professionals everywhere will generally concur on one thing \u2013 they\u2019re always at war. Coordinating between and managing requests from suppliers, internal teams, finance, approving authorities and several other stakeholders is difficult.<\/p>\n
In a world where instant gratification is valued, conversational AI tools\u00a0are gradually becoming ubiquitous, helping fulfill myriad tasks in a few seconds. Siri, Alexa, Google Assistant, etc., have pervaded our lives; it is time organizations adopted the technology too. Simple rule-based chatbots can help simplify critical business functions like procurement, which involves a plethora of transactions on a day-to-day basis. Imagine what an AI-powered chatbot can do!<\/p>\n
This blog explores how you can use conversational AI tools\u00a0to help you rethink your procurement strategies.<\/p>\n
Conversational AI\u00a0is the technology that powers a chatbot<\/a>\u00a0or virtual assistant and enables automated conversations between a machine and human via text or speech. A concoction of various technologies such as Natural Language Processing<\/a> (NLP), Deep Learning and Machine Learning, Natural Language Understanding (NLU), Automatic Speech Recognition (ASR), and Natural Language Generation (NLG) make this simulated human-like conversation possible.<\/p>\n 1. NLP<\/strong>\u2013 Identifies synonyms, interprets grammar, corrects spellings, recognizes the sentiment, and cracks down the request received in a format that a virtual assistant can easily understand.<\/p>\n 2. NLU<\/strong>\u2013 NLU is made up of algorithms, data sets, and features that enable it to analyze and decipher the meaning and intent of the input received.<\/p>\n 3. NLG<\/strong>\u2013 Once the data received is decoded, NLG creates a response.<\/p>\n 4. Deep Learning & Machine Learning<\/strong>\u2013 As the AI receives \/ is trained on more inputs, deep learning, and machine learning algorithms recognize patterns and help refine responses over time.<\/p>\n Conversational AI\u00a0has certain unique characteristics that sets it apart from other technologies:<\/p>\n Procurement professionals spend a considerable amount of time in transactional activities like prolonged negotiations, responding to suppliers and internal teams, follow-ups, tracking orders, manual PR\/PO interventions, etc. As a result, business users are often one of the impacted parties, needing to wait for significant periods of time on approvals, receiving goods, and processing of payments. This leads to some disgruntlement on the business users\u2019 part leading to lower adoption of e-Procurement tools<\/a>.<\/p>\n So, procurement leaders now need to focus on what appears to be several different problems, which are just several symptoms that can be solved by one solution. Enter conversational AI.<\/p>\n Currently, procurement is highly manual and technical, requiring users to have a level of knowledge about preferred suppliers, organizational purchasing policy, and tools & processes. An AI chatbot can analyze historic buying behavior for each user and catalyze the buying process by creating one-click repeat purchase options. AI chatbots can also guide users throughout the buying process by highlighting key steps, prompting them about using preferred vendors and buying channels.<\/p>\n An AI chatbot<\/a> can identify duplicate orders, vendors and invoices, study spend patterns, put products into different catalogs and more. It can also highlight erroneous prices, quantities, and more, based on contract & invoice data.<\/p>\n Chatbots can be integrated with a host of backend systems within the organization such as ERP tools, and business & market intelligence systems. This enables chatbots to perform repetitive tasks on behalf of the users such as conducting a search, filling out forms, creating a new purchase order with pre-fed instructions and more. They can also alert the user of supply disruptions, order delays and failures.<\/p>\n A key benefit of conversational AI is the ability to transcend platforms \u2013 you\u2019re no longer interfacing with a non-responsive platform. You\u2019re conversing & getting work done. Conversational AI\u00a0can \u2018talk\u2019 to business users helping them procure, and respond to suppliers\u2019 queries, order updates, etc.<\/p>\n Digitization has blurred geographical boundaries which also means most businesses have employees, business partners, and suppliers peppered across the globe. This poses a unique challenge as people are working in different time zones. AI chatbots can streamline communication by responding to queries in real-time 24\u00d77.<\/p>\n With evolving technology it is now possible to integrate chatbots on multiple platforms such as web, instant messaging, chats, wearable devices and more. Users can now make decisions, place PO requests, track orders, and do pretty much everything related to procurement anytime and anywhere.<\/p>\n In a nutshell, conversational AI tools\u00a0when leveraged to their full potential for the procurement function can ensure an agile and streamlined purchase process.<\/p>\n Traditional procurement tools range from basic spreadsheets to specialized procurement software. These systems are predominantly rule-based and require manual intervention at various stages, be it requisition approvals, order placements, or supplier evaluations.<\/p>\n 1. Challenges<\/strong> \u2013 Time-Consuming, Error-Prone, Unscalable, Inflexible. Integrating Conversational AI\u00a0into your procurement strategy signifies a paradigm shift from manual to automated, from reactive to proactive, and from isolated to integrated.<\/p>\n 2. Optimized Workflow<\/strong>: AI can help prioritize and execute tasks based on urgency, ensuring that your team focuses on what matters the most.<\/p>\n 3. Data-Driven Insights<\/strong>: Real-time analytics via integrations can help in making better informed decisions.<\/p>\n 4. Supplier Relationship Management<\/strong>: Conversational AI\u00a0can also help in maintaining better relationships with suppliers by facilitating automated transparent and timely communication.<\/p>\n 5. Compliance and Risk Mitigation<\/strong>: Guided buying ensures that employees are following organizational purchasing policies and using preferred vendors, thereby reducing compliance risks.<\/p>\n 6. User Engagement<\/strong>: Simplifying the purchasing process increases user adoption of procurement tools, thus consolidating expenditures and improving visibility into spending.<\/p>\n 7. Faster Decision-Making<\/strong>: Historic buying data guides users to make quicker, more informed decisions, thereby reducing procurement cycle times.<\/p>\nConversational AI<\/strong>\u00a0& Procurement<\/strong><\/h2>\n
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\nOne solution for \u2013<\/strong><\/p>\n\n
Benefits of <\/strong>conversational AI tools<\/strong>\u00a0in procurement<\/strong><\/h2>\n
Guided buying<\/strong>:<\/h3>\n
Real-time error identification<\/strong>:<\/h3>\n
Integration intelligence<\/strong>:<\/h3>\n
Automated personalized interactions<\/strong>:<\/h3>\n
Asynchronous communication support<\/strong>:<\/h3>\n
Work on the move<\/strong>:<\/h3>\n
What does this mean for your procurement strategy? Traditional tools vs. Conversational AI<\/strong><\/h2>\n
Traditional Tools vs. Conversational AI: A Comparative Snapshot<\/strong><\/h2>\n