Surveys of CPOs show some predictable trends in the industry. Cost savings and timely delivery consistently top their list of main priorities—as you would expect. At the board level, there are other areas of focus when it comes to procurement, including predictive sourcing and the supply chain. Again, hardly unexpected. However, something exciting is going on as well.
Today’s sourcing teams are undergoing a transformation. There is a pronounced shift that is seeing the procurement department become a strategic partner to the C-Suite. Procurement and strategic sourcing teams that are successful in transforming are prioritizing a strategic approach. To make that happen, procurement teams are embracing artificial intelligence. By adopting AI, these teams are doing more with less.
The Rise of Artificial Intelligence and Predictive Sourcing
Artificial intelligence (AI) is a very big deal. Many people consider it to be the fourth industrial revolution. The first industrial revolution was driven by steam, the second by electricity, and the third by the computer. AI could well prove to be the most dramatic leap forward of them all.
Powered by data and machine learning, AI is an incredibly complex and powerful technology. AI processes massive amounts of data, “learning” as it does so, and then makes decisions based on patterns and trends identified from that data.
The AI then learns from the outcome of its decisions, becoming increasingly effective. Artificial Intelligence has become far more effective in recent years because of two factors. First, with so much information now digitized, the amount of data available is virtually unlimited. Second, with cloud computing, the processing power needed to facilitate machine learning, and AI is available on a massive scale. It’s also distributed and available for use in many systems—not limited to a supercomputer in a closed laboratory.
In the world of procurement, AI can train on the vast quantities of data that are inherent in the industry. Artificial intelligence is used to develop models that procurement professionals can then use to automate processes. They are completed faster and with better results.
A Cultural Shift That Prioritizes Strategic Activities
Procurement is undergoing a cultural shift, not just a digital transformation. Traditionally, a company’s procurement team focused on tactical, hands-on activities. Spreadsheets ruled. E-mails had to be searched for critical information. Repetitive administrative tasks took up much of the time. Simple questions like which suppliers should be short-listed for an upcoming project required teams of analysts working with complex software. Those at the top handed down the department’s goals, and they were simple: cut costs and do things faster.
Artificial Intelligence has empowered procurement teams to embark on a historic transformation. Predictive sourcing has streamlined and, in some cases, automated processes.
That has freed up procurement team members to become involved with their companies at a strategic level. They are creating tangible business value, not just constantly trying to work faster to save money. Utilizing predictive sourcing software such as Arkestro, for instance, allows time for more value-added activates.
The procurement office is becoming a strategic partner to the C-Suite, not just a cost center. They are doing more with less.
How the Pandemic Showed the Value of Category Management and Predictive Sourcing
The transformation of procurement from tactical to strategic has been a key result of the adoption of artificial intelligence. There has been a greater emphasis put on category management since 2020, and the software that helps sourcing teams.
The pandemic has also shone a spotlight on the practical value of AI and the ability to do more with less. Teams that are often working remotely and are dealing with a global supply chain that has been completely disrupted.
Consumer and corporate buying decisions have also been upended and subject to frequent changes. These challenges have meant that procurement teams must source faster and smarter and make decisions using real-time data.
The digital divide and lack of sufficient (and clean) data has made it challenging for teams, but by improving procurement software, slowly but surely it is getting easier. For example, using the Arkestro Predictive Procurement Orchestration Platform allows category managers visibility into market changes, and the ability to secure materials ahead of the markert
Without AI, this simply wouldn’t be possible.
What Arkestro Means to the Digital Evolution of Procurement
Arkestro is a predictive procurement platform made by procurement professionals for procurement professionals. It’s AI-powered, with advanced features like Intelligent First Offers and fast line item imports that help teams get better quotes faster.
Strategic business goals become opportunities. AI-powered technology reduces friction in the procurement process. Throughput is increased. Tracking and reporting support predictable value creation—no degree in data modeling or computer science required. The value that a procurement team using Arkestro will bring is a significant competitive advantage. The cost savings everyone wants are there, of course, but the procurement team becomes an integral part of new product launches. A diverse and sustainable supply chain is created.
Burnout in the department is also significantly reduced, with intuitive, easy-to-use software, automation of repetitive tasks, and a modern procurement experience.
Take the Next Step
To find out why Arkestro is the utility belt for every procurement superhero, visit Arkestro for a demo. See how your procurement team can predict demand for future sourcing activities, forecast future pricing, and automate compliance — doing more with less.