AI and automation are transforming how businesses manage procurement—is your company ready?
Given that AI in procurement “can lead to important efficiency gains, cutting procurement costs down and improving business decision-making”, it’s clear that the future of procurement automation will rely heavily on the continued maturation of Artificial Intelligence.
Why Traditional Procurement No Longer Works
Interestingly, the concept of procurement dates back over 5,000 years, and has been used throughout the history of business. While the fundamentals have remained largely unchanged for generations, tech advancements have seen procurement methods evolve at various stages in time. More recently, the development of artificial intelligence in supply chain management has created a situation where traditional approaches are on the verge of becoming obsolete.
Traditional procurement methods use a manual approach to purchasing goods and services on behalf of the business. It involves a lot of phone calls, paperwork, and human interactions. Unfortunately, this can make the tactic slow and costly. Perhaps more importantly, traditional procurement methods aren’t scalable as human buyers can only complete a certain amount of tasks in a set timeframe.
Moreover, traditional procurement also relies on human decision-making processes, which may lead to delays or expensive mistakes. AI-driven procurement is the future of procurement because it increases efficiency and cuts costs. Moreover, savings of time and money are taken to new heights when supported by easy integrations with Quickbooks and other accountancy software.
Procurement plays an integral role in modern business, but traditional methods are no longer capable of keeping pace with an AI-dominated arena. The emerging trends in purchasing technology all revolve around AI, which is why every supply chain leader and C-level executive must look to move away from outdated traditional tactics to gain a competitive edge.
Improving Business with AI in Procurement
Artificial intelligence in supply chain management has been a hot topic in recent times, with 68% of supply chain organizations integrating AI to enhance traceability and visibility within their operations. Emerging trends in purchasing technology, ensure that it is the future of procurement, not least because it has the power to transform the way organizations handle all related activities.
Firstly, automation saves time and money for businesses of all sizes. It eliminates the need for manual purchase ordering and procurement processing. There are fewer handoffs between human users, including those in different departments as well as suppliers themselves. Whether it’s matching requests to receipts or creating new purchase orders, each improvement is a noticeable step in the right direction.
Aside from increased speed, automated procurement tasks guarantee compliance and remove human errors. It’s also fully scalable, allowing the procurement of goods and services to evolve alongside the needs of your company while also reflecting issues like seasonal trends through the use of real-time data.
In fact, AI’s forecasting capabilities are another key incentive for migrating to AI-powered procurement. Using past data, audience trends, and data from a wide range of sources allows AI tech to accurately predict procurement needs. It even takes issues like seasonal demands to reduce stockouts or overstocks.
In turn, this type of predictive analytics helps save the company money as well as its brand reputation and CSAT scores. Moreover, it enables employees in and outside of the procurement department to focus their energies elsewhere.
Once established, AI-powered procurement systems operate with data-driven decisions contextualized by the company’s requirements, ensuring optimal efficiency in both the immediate and long-term future.
Emerging Trends in Purchasing Technology to Watch
AI and automation aren’t just the future of procurement. They are the present. Nevertheless, technology is evolving at a rapid pace, which is why businesses must be aware of the latest trends.
Sustainability is driving progress in many aspects of business as at least 80% want to adopt environmentally-friendly endeavors. AI-driven procurement is one area where huge progress can be made. Promoting ethical supply chain practices can be as simple as selecting different vendors and satisfying regulatory compliance. While implementing changes through manual procurement takes time and energy, the transition becomes far smoother with automated upgrades.
Vendor collaboration is another priority for 2025 and beyond. Businesses may adopt dedicated supplier relationship management protocols to encourage this. Again, dedicated procurement tools featuring AI capabilities enhance this further, not least because all data relating to a vendor can be collected in one place.
Finally, as AI tools become more advanced, their ability to drive competitive advantages will grow. It’s no longer enough to outperform manual procurement. It’s equally important to outperform competitors. Bid optimization, risk mitigation, and spending analytics are some of the key features that are empowering teams through AI-powered procurement. With the right tools, like eParts, those rewards can become greater than ever.
The landscape has evolved. If you’ve persisted with manual efforts until now, this is the moment to change your view.