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Use of machine learning is beginning to be used for efficiently manage time-consuming tasks like organising and authorising purchases and B2B payments.

AI Begins to Play a Role in Procurement and B2B PaymentsARTICLE

By Mike Faden

The artificial intelligence-powered virtual assistants popularized by consumer technologies are also starting to play a role in B2B purchasing, helping users navigate procurement complexities and make B2B payments. Suppliers say that the assistants, also known as chatbots or simply bots, may help increase procurement efficiency, helping users speed processing and reduce errors.1 The interfaces are part of broader initiatives to use AI to simplify and automate complex B2B procurement processes.

Among the key initiatives: online B2B marketplaces are adding conversational interfaces designed to help users with common yet time-consuming tasks, including organizing and authorizing purchases and B2B payments. Like the virtual assistants in smartphones and other consumer gadgets, these interfaces allow users to converse with the system using natural language, although demonstrations of the technology generally show the conversations occurring on-screen rather than via the spoken word.2,3

Machine Learning Helps Navigate B2B Payment Complexities

Besides offering natural-language interfaces, some virtual assistants apply machine learning with the goal of becoming more helpful over time: as one company puts it, “leveraging machine learning, the bot will be able to train and learn about a user’s preferences and a company’s policies and procedures and guide actions in line with them to reduce errors and speed processing.”4

Suppliers of procurement technology suggest that the assistants will be able to help tackle a wide range of time-consuming tasks and problems, such as reducing the number of invoices that are rejected due to a mismatch with buyers’ rules; recognizing inaccurate pricing; identifying alternative suppliers; quickly providing accurate information to collaborators; pulling information for reports; solving issues associated with previous orders; and steering the correct path through the organization to obtain all the necessary approvals for a purchase, including the creating of a B2B payment virtual card.5,6,7,8

Virtual assistant technology is at an early stage in B2B procurement, and may take time to reach its full potential, one analyst observed. “I think, this year, it seems every vendor had to get on the map and wave their hand to say, 'I've got a machine learning or AI story, we've got chatbots, we've got Internet of Things,'" says to Chris Kanaracus of Constellation Research. "In terms of actually delivering it, that's probably the next couple years. But it's an important direction, and I think it has a lot of potential.”9

The Broader Push beyond just B2B payments

The assistants are one element of a broader push beyond just B2B payments to use artificial intelligence, including machine learning technology, throughout the procurement process and more widely in supply chain management. For example, machine learning may be applied to the millions of transactions executed on B2B marketplaces, helping to identify patterns and manage exceptions.10A Singapore government agency has trialed the use of AI to identify and prevent procurement fraud, using the technology to analyze HR and finance data, procurement requests, tender approvals and workflows to spot, for example, potential links between suppliers and government employees’ relatives.11

AI is also being used to help reduce cost and improve compliance by analyzing spend data in real time, checking for compliance and exceptions.12 Some experts say that next-generation spend analytics may evolve to predict pricing patterns, check prices online against existing deals with suppliers, and analyze supplier risk.13

Organizations are also starting to use AI more widely in supply chain management, experts say. In a co-authored article, two Accenture strategy analysts describe an Accenture survey finding that 85 percent of organizations have adopted or are adopting digital technologies within their supply chain. They say that AI is helping organizations analyze the massive amount of data created by these supply chains, gaining a better understanding of the variables in the supply chain and helping them anticipate future scenarios. “This is helping businesses reduce time to market and establish agile supply chains capable of foreseeing and dealing with uncertainties,” they wrote.14

Market-research and analysis firm Gartner Inc. also believes AI will have a disruptive impact on procurement technology beyond B2B payments. However, it also warns that companies will need to make sure they have access to the right skills and data to take advantage of the technology. “AI technologies will add significant value if provided the right platform, so application leaders in procurement need to drive better adoption of foundational procurement solutions,” according to a Gartner research report, Start Preparing Now for the Impact of AI on Procurement. “Unless application leaders have access to the right analytical and data science skills, procurement organizations will struggle to get value from AI in procurement as a result of not understanding the opportunities and limitations.” 15

The Takeaway

Virtual assistants are emerging that are designed to make complex and time-consuming procurement processes easier, faster and more efficient. Like the virtual assistants used in consumer technologies, these chatbots are at an early stage, and experts say they may take time to mature. However, suppliers are investing considerable resources in AI technology with the goal of applying it to B2B payments processes and beyond, across procurement, and more broadly in supply chain management.

Mike Faden - The Author

The Author

Mike Faden

Mike Faden has covered business and technology issues for more than 30 years as a writer, consultant and analyst for media brands, market-research firms, startups and established corporations. Mike also is a principal at Content Marketing Partners.

Sources

1.“SAP Ariba Unveils Plans for Procurement Bot,” SAP Ariba;http://www.businesswire.com/news/home/20170322005021/en/SAP-Ariba-Unveils-Plans-Procurement-Bot
2.“Ada, an AI Layer on the Tradeshift platform,” Tradeshift; https://tradeshift.com/ada/
3.“#OOW16 Recap: Chatbots Are Coming!,” Oracle; https://blogs.oracle.com/mobile/entry/oow16_recap_chatbots_are_coming1
4.“SAP Ariba Unveils Plans for Procurement Bot,” SAP Ariba; http://www.businesswire.com/news/home/20170322005021/en/SAP-Ariba-Unveils-Plans-Procurement-Bot
5.“Meet George Jetson – Your New Chief Procurement Officer,” BriefingsDirect; http://www.briefingsdirecttranscriptsblogs.com/2016/11/meet-george-jetson-your-new-chief.html
6.“Ada, an AI Layer on the Tradeshift platform,” Tradeshift; https://tradeshift.com/ada/
7.“SAP Ariba Unveils Plans for Procurement Bot,” SAP Ariba; http://www.businesswire.com/news/home/20170322005021/en/SAP-Ariba-Unveils-Plans-Procurement-Bot
8.“There’s a bot for that procurement job,” B2B E-Commerce World; https://www.digitalcommerce360.com/2017/03/27/theres-a-bot-for-that-procurement-job/
9.“Future of Ariba Network on display at SAP Ariba Live,” TechTarget; http://searchsap.techtarget.com/news/450415542/Future-of-Ariba-Network-on-display-at-SAP-Ariba-Live
10.Meet George Jetson – Your New Chief Procurement Officer,” BriefingsDirect; http://www.briefingsdirecttranscriptsblogs.com/2016/11/meet-george-jetson-your-new-chief.html
11. “Exclusive: Singapore trialling AI to predict procurement fraud,” GovInsider; https://govinsider.asia/security/exclusive-singapore-trialling-ai-to-predict-procurement-fraud/
12. “Artificial Intelligence: The next big thing in Supply Chain Management,” Financial Express; http://www.financialexpress.com/industry/artificial-intelligence-the-next-big-thing-in-supply-chain-management/329033/
13.“Artificial Intelligence Can Help Procurement Solve Some of the Big Challenges,” Spend Matters UK/Europe; https://spendmatters.com/uk/artificial-intelligence-help-businesses-save-thousands/
14.“Artificial Intelligence: The next big thing in Supply Chain Management,” Financial Express,http://www.financialexpress.com/industry/artificial-intelligence-the-next-big-thing-in-supply-chain-management/329033/
15.Start Preparing Now for the Impact of AI on Procurement, Gartner, Inc., https://www.gartner.com/doc/3654117/start-preparing-impact-ai-procurement

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