This is an AArete Profitability Improvement Insight
The topic of 2023 to date: ChatGPT, and other transformative AI technologies that have created novel personal experiences, but the question remains, how can it make your business better? And, when is the time right to utilize the innovation across key business functions? While we are only at the infancy of the power of AI driven chatbots, the prevailing market positions has created a call of action to drive resiliency, efficiency, and productivity. The time is now to reinvent your procurement team through the power of AI. A new world of potential has been unlocked with smart learning AI and natural language processing bots. These interfaces are capable of supporting human-like interactions in complex environments that should enable your team to finally answer the call of “doing more with less.”
The economic impacts of the current climate are upon us, but businesses may not be ready for what is to come. Tech and financial services layoffs are fostering an environment of uncertainty. Recession concerns are challenging businesses to innovative customer acquisition and revenue growth strategies. Lending costs have skyrocketed. The war for talent lives on. 2023 is becoming the year of differentiation. AI Chatbots could be one of those tools to enable your business to establish a competitive advantage in the market. While these bots have numerous applications, business functions – for example, procurement – should be established as an immediate target to test the realm of possibility.
5 ways procurement can use chatbots to do more with less
Eliminating Non-Value Tasks: Every organization struggles with the flow of information and ensuring an efficient business process within procurement. Quite frequently teams are pushing communication through email or pulling data in and out of an ERP system. Procurement teams are littered with non-value tasks including: tracking down business requirements, creating requisitions, payment processing, required forms, and many others. These non-value tasks are time consuming. No longer do you need to spend ~50% of your time on non-value added activities, but rather, you can maximize the impact of your team on your business and strengthen your third party relationships.
Contract Management: 92% of organizations are attempting to transform their management of contracts as most have struggled to establish an efficient and seamless contract management process. Even powered by the most innovative CLM tools, struggles remain. AI Chatbots have the opportunity to become the difference maker. Imagine asking “What contracts expire in the next 90 days” or “Who needs to approve this Contract” or “Help me develop a new clause”, all to have the right answer completed instantaneously. The power of document search and document creation will save hours for your procurement team and your legal team. No longer will you be waiting 90 days for a contract review or forgetting about an upcoming renewal, your team can be empowered to focus on value added activities and AI Chatbots can streamline those more tactical activities.
Validating Competitiveness: The “three bid” requirement is a well-established norm for procurement teams and one that does not always yield true value. Now, your team has access to information available across the vast nature of the internet. While not all information is accurate, you are able to streamline an assessment of competitiveness for low dollar and low complexity transactions. Instead of having your team hunt down proposals for the sake of a proposal, your team can focus on strategic efforts while feeling confident you are streamlining the best decisions for the business.
Supplier Risk Management: Supplier and supply chain risk management became of the utmost importance throughout the pandemic and is still top of mind as we head into 2023. Organizations have implemented risk management tools or have established large risk management teams to provide a thorough review of your partners and create a deep dive of the resiliency of your supply chain. You can now reallocate those resources to more business pertinent activities and allow ChatGPT, Bard, and the next wave of AI Chatbots to be your first layer of supplier risk management .
Onboarding: Have you ever wondered when your new procurement team members truly reach peak performance? The war for talent and the great resignation of the past 2 years has quickly changed the experience and make up of your team. Team members that have to routinely learn your process and ask hundreds of questions to drive inefficiency for your team and challenge your ability to maximize the impact on your business. Chat innovation has changed that structure. Your team members can ask live questions throughout a process, a bot can help navigate the processing of a transaction, and your team member can immediately focus on value creation activities.
The biggest question is how to get started. Organizations will need to be smart about how to leverage these innovative tools. As likely as they are to help, they also present a great risk to drive misinformation or make mistakes. Tools need to be structured to ensure that your business is enabling value from them and it is not just another technology operating as an inhibitor instead of an enabler. While these technologies may not deliver innovative breakthroughs for your business, they will shorten the timeline to solve those challenges and ultimately enable you to do more with less.
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