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Artificial Intelligence (AI) is the process whereby computers or machines can simulate human intelligence or mimic human behavior thus displaying the ability to problem solve.
A core component of artificial intelligence is machine learning, which allows machines to learn new things by evaluating new data without requiring any programming assistance from humans.
It’s a heavily trending topic in the world of finance, and many companies understand the opportunity that lies in AI. AI is also playing a very important role in procure-to-pay (P2P), helping organizations overcome key challenges and helping them streamline their financial operations.
AI makes it easy for companies to automate different time-intensive tasks and offers greater insights when processing large amounts of data. Procurement software that leverages the power of AI makes it easy for companies to understand key metrics and use the information available to them more effectively.
In essence, any software that contains self-learning capabilities or smart algorithms is known to use AI. There are several AI applications that you should know about.
This can refer to any software that includes self-learning technologies, allowing it to mimic human decision-making.
Natural language processing refers to specific algorithms that are capable of interpreting, understanding, and identifying human language.
Machine learning refers to algorithms that process vast amounts of data to detect similar patterns, which allows them to make better decisions.
Robotic process automation refers to the use of algorithms that can perform repetitive tasks. While it’s generally considered to be on the fringes of AI, it’s widely used in procurement to perform mundane tasks.
One of the benefits of using AI is that it helps solve complex problems that would take significantly longer for an average human. AI enabled machines or software can process large sums of data using specific algorithms to find key insights.
As a result, AI can play an important role in streamlining procurement processes in a number of ways, as discussed below.
Procurement teams have plenty of decisions to make, ranging from finding the right vendors, evaluating lead times and placing orders when the stock falls below a certain threshold.
They can use artificial intelligence in order to gain access to data-driven information sets which can be used to improve decision-making. It also allows companies to make sourcing decisions that yield better benefits and reduces cost inefficiencies.
Historically, procurement and AP departments have been considered cost centers, but by leveraging the power of AI, companies can eventually turn them into profit centers.
AI can help companies automate tasks such as vendor analysis, performance reports, placing orders, calculating specific order quantities, and various other monthly processes, like invoice matching.
All of these are necessary tasks in an AP department and require significant human resources. But, with AI, AP teams can free themselves from repetitive tasks and focus on making important decisions that benefit the business.
AI helps companies streamline internal procurement operations. It helps companies identify key insights about their performance and allows them to explore new opportunities that eventually result in cost savings and better profitability.
Another benefit of leveraging AI in procurement is that it allows companies to identify new vendors or markets that they can explore. AI can help capture important information about different vendors, including their capabilities and other external data.
This makes it easy for companies to expand their vendor network and build better relationships with business partners. By infusing data into the decision-making process, companies can better predict outcomes.
AI can help bring down processing times for procurement processes by up to 60%, as software tends to run for 24 hours a day. From evaluating different tenders to comparing team performance, AI can help procurement teams become more productive.
SoftCo’s Accounts Payable Automation solution offers touchless invoice automation by using artificial intelligence and machine learning technology to reduce manual intervention. This frees AP teams to focus more on high-value tasks that benefit the company.