Procurement & Artificial Intelligence Part 1 of 2
Overwhelmed by all the new technology? Let’s talk about Artificial Intelligence (AI) and Blockchain.
ProcureAbility has attended two major conferences recently, ProcureCon West in Scottsdale, AZ and SIG Fall Summit in Carlsbad, CA. A few of the well-attended sessions for both were discussions around the topics of blockchain, machine learning and AI. There is a lot of hype and an expectation that these innovative technologies are going to impact the world of procurement, but no one seems to be able to provide a clear picture of the future. A few attendees pointed out that companies are faced with simpler more pressing issues and the low quality and availability of procurement data make the opportunity feel unattainable.
“AI and machine learning are already helping automate repetitive tasks found in downstream activities, but larger potential resides with the ability to analyze and detect patterns of incorrect or large set data.”
The most rewarding and challenging application for AI is strategic reasoning in large and complex decision spaces – think in terms of complex RFPs with many potential scenarios and tradeoffs. These advanced use cases are still in its infancy with few solutions and only a few companies truly participating.
Blockchain, the secure distributed ledger technology originated by Bitcoin, has the potential to transform all digital transactions, including those involving procurement and supply chain. Blockchain could be used for:
- Smart contracts
- Supply Chain traceability
- Increased P2P automation
On the technology side of blockchain, multiple standards exist with no clear leader, although, companies are experimenting with real cases and finding success. Walmart and a group of food giants are teaming up with IBM to explore how to apply blockchain technology to food safety through improved traceability.
The main challenge currently faced by procurement professionals is figuring out how these new technologies work, what they really are, and how they could be practically used. The learning curve is steep as these new potential processes rely on difficult concepts over a lot of disciplines (technology, finance, legal, data science, cryptography, etc.) It is time for procurement professionals to start learning about these topics and develop some basic knowledge.
There are many articles to choose from to learn more about the technologies and their use cases. Below are a few recommended starting points:
While the future is still unclear, we believe it is time to begin learning about these concepts so we can all benefit from their applications in the not too distant future!
Please continue to Part 2 of Procurement & Artificial Intelligence