Artificial Intelligence in Procurement

How will spend management change as a result of Artificial Intelligence (AI)?

Taking a smart look at the future of procurement practices

by Salim Khalife, Founder & CEO

There is no area of business operations exempt from discussions of the potential benefits of technologies like Artificial Intelligence (AI), so it will come as no surprise that AI is already making significant inroads in procurement processes. Much has been written about what AI is, and how it relates to procurement, so we won’t revisit that here. Instead, we outline what kinds of changes you can expect AI to bring to procurement practices over the next few years, and how you can set your company up to capitalize on those changes.

1. Automation of procurement tasks

Artificial Intelligence is adept at automating even complex tasks. AI will help bring more purchases under direct control by facilitating the creation of requisitions from free-form data like that contained in an email – not just data entered into a requisition entry screen. Speech recognition (think Siri and Alexa) is poised to change the requisition and approval process for busy and off-site workers. Also, using image recognition technology, employees may opt to send a picture of an item they wish to order or reorder, again simplifying the requisition process and making it likely that more spend is being actively managed. AI will also be trusted to review and even generate and monitor supplier contracts, automating a typically labor-intensive set of tasks.

2. Detecting patterns

Looking for anomalies in data sets is one area where AI excels. Procurement AI technologies can look for cost/price discrepancies, unusual order quantities or frequencies, compare contract data to orders and invoices, and a whole host of other patterns that will help companies detect potential fraud or errors, detect and predict purchasing patterns, and identify the top-performing trading partners.

3. Strategic sourcing

Artificial Intelligence is capable of “learning” your sourcing patterns and behaviors and making supplier recommendations. It can even be used to predict market prices, identify and analyze new potential vendors, and help you evaluate the success of your relationships with existing suppliers.

Preparing for AI’s arrival

Artificial Intelligence and associated process automations are here. It’s simply a matter of time before the various technologies work their way from the largest enterprises to midmarket companies like yours. The key to capitalizing on any AI technology is having sufficient data available for analysis by the AI tools. And such availability is not a given. A 2017 Deloitte Global CPO survey found that the quality of data and the lack of integration were the two most cited barriers to the effective application of digital technologies. It seems that gathering and structuring data from multiple disparate systems remains a challenge for many organizations, and any AI technology you implement will struggle with it too.

An effective way to prepare your company to reap the full benefits of AI technology is to implement a dedicated procurement and spend management solution. These solutions go a long way toward automating workflows, streamlining purchasing, and managing your suppliers. And, when you integrate your procurement solution with your ERP, you begin to build that single, integrated database that will provide the source material for your future AI toolkit to work with.

About the author:

Salim Khalife is the founder, president and CEO of Paramount WorkPlace, a technology company that develops, sells, and supports advanced web-based and mobile requisition, procurement, and expense software solutions for mid-market organizations. The company introduced its first cloud-based SaaS requisition application in 1997, and continues to innovate and expand its partnerships and integrations ever since. Learn more at


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