During the formation of the ‘Bold Procurement Predictions for 2030′ Insights series, ProcureAbility was keenly focused on procurement teams’ maturity levels for accepting new practices and emerging trends. It quickly became clear that procurement organizations are all over the map in terms of the new processes and technologies adopted. Some are still mired in their core practices, while a small group of innovators are ideating new ways to leverage supply chain technology. The focus of ProcureAbility’s effort was at the very top of the pyramid below: ideation.
In this Insights series, ProcureAbility explores five emerging trends that procurement organizations should anticipate will transition from the top of the pyramid to the bottom by 2030, including advanced crowdsourcing, procurement technology acceleration, cognitive computing, hyper cybersecurity, and virtual organizational design.
This is the next release in ProcureAbility’s ‘Bold Procurement Predictions for 2030′ Insights series. The study is the product of extensive research and input from a think tank of experts in the supply chain field. In this third chapter, ProcureAbility looks at the future of cognitive computing.
Cognitive computing is a catchall term for a group of systems comprising of artificial intelligence (AI), expert systems, machine learning, robotic processing automation (RPA), and neural networks. The goal is to develop programs that mimic the way a human brain absorbs and processes information. In practice, a cognitive computing system is:
Adaptive—Learns and evolves
Interactive—Communicates across systems
Iterative—Solves ambiguous problems
Stateful—Invokes suitable information for the application at the time
Contextual—Identifies and extracts contextual elements
The market for this technology is expected to grow to $77.5 billion by 20251. In fact, applications based on cognitive computing will expand across consumer, business, healthcare, industrial, and education markets. The procurement field will be no exception.
By 2030, due to cognitive computing, strategic sourcing will take no longer than two weeks. Nearly every aspect of sourcing will utilize machine learning or RPA–from setting up an event through contract execution.
With cognitive systems at work in the practice, procurement teams can see some significant workflow improvements. Artificial intelligence will help procurement teams get ahead of a client’s business needs. Machine learning will sort through vast databases and cross-reference what was sourced in the past, how frequently, at what volume, and what end use behavior looked like. Intelligent systems can use this data to automatically trigger future intake inquiries at the optimal times.
Cognitive computing will yield efficiency gains. We expect most administrative tasks to be automated (intake, strategy recommendations, RFP development and administration, evaluation and scoring, and scenario analysis). Teams will need to pivot to more strategic skill sets, such as relationship development. Impressively, cognitive computing will even help generate new sourcing strategies. By 2030, expect artificial intelligence to become a dispassionate aid to human efforts when executing negotiations and developing future strategy blueprints.
We understand that cognitive computing will affect workflows and long-accepted process. ProcureAbility recommends that organizations conduct an assessment of their sourcing processes, develop plans to utilize next-gen technology systems, and then begin exploring areas to apply AI and machine learning technologies.
1Markets and Markets, Cognitive Computing Market, March 2020