Utilizing Systems that are Intelligent

 In Data Optimization, Guest Blog, Procurement Blog, Spend Analytics

SpendHQ welcomes the thoughts and insights of Ardent Partners Chief Research Officer, Andrew Bartolini.

In my last blog post, I wrote about the big opportunities residing within big data for procurement and gave you several use cases to consider. Today, I’m going to take things a step further and talk more about intelligent procurement tools – what they are, and how sourcing and procurement practitioners can leverage them to enhance their overall experience and drive more value. And it turns out they cannot do it without the data.

As I wrote in this year’s CPO Rising benchmark procurement study, there hasn’t been a more exciting time for business technology since perhaps the dot-com boom of the mid-to-late 1990s. Where before, business process digitization and automation revolutionized the way that many organizations conducted operations, today, digital transformation is, well, transforming the game once again. Data-driven systems and tools, like advanced analytics, blockchain distributed digital ledgers, connected devices (the “Internet of Things”), machine learning, natural language processing (NLP), robotic process automation (RPA), and virtual/digital assistants are creating an intelligent ecosystem that looks and feels like artificial intelligence (AI) and its myriad incarnations.

No Time to Split Hairs

There’s a lot of nuance to the term, AI. But rather than get into what AI is or isn’t, I’d instead like to talk about some of the intelligent systems and tools that procurement practitioners can employ today that can improve user interface (UI), user experience (UX), increase agility, drive efficiencies, and discover hidden value buried deep within datasets.

Imagine a world in which business users have at their disposal advanced analytics engines that not only ingest and manage petabytes of data (i.e., large volumes of structured data) but also run that data through advanced algorithms that discover patterns and opportunities hidden deep within. And now imagine a world in which those same algorithms and analytics engines can not only predict with striking accuracy future events but can also enable procurement platforms to make automated, predictive purchasing when prices reach or cross established thresholds. This is not science fiction; Wall Street traders have been using similar platforms and tools for years in the securities markets; category management, especially for direct materials, is ripe for this kind of innovation.

Speaking of algorithms, they are also powering intelligent systems in the form of intelligent search and machine learning. Systems embedded with rule-based, deterministic algorithms, like contract analytics and discovery, enable users to search thousands and millions of lines of data with keywords to find desired outcomes. Meanwhile, applications and tools integrated with machine learning algorithms automatically analyze enterprise data, like spend data, looking for hidden patterns, and can learn user behaviors after just a few transactions, and can anticipate user workflows.

Advanced algorithms, coupled with increased computing power, now enable more accurate natural language processing in the form of voice recognition and speech-to-text. When mated with automated business solutions and mobile applications, NLP has contributed to the rise of virtual or digital assistants (aka, chat bots), which can receive commands, execute tasks, field questions, and provide answers, including options. We’ve been using Apple’s Siri and Amazon’s Alexa for a while now; there’s no reason why we can’t use them to run the latest spend analytics reports or conduct spot buys. The collective technology is so dynamic and accurate that it seems to be artificial intelligence when in reality it’s a bunch of algorithms behind a slick interface. But it sure looks and sounds intelligent, so why not?

The Future of Intelligent Systems

Now imagine a world in which every transaction made by you and other stakeholders is automatically, digitally, and permanently recorded in a secure, distributed ledger. Consensus algorithms power blockchains, or distributed digital ledgers that add a new record or block to its chain for every transaction, addition, subtraction, or edit made; and once made, they cannot be changed – it is a permanent artifact. Blockchain is the ultimate resource for increasing transparency and trust in B2B eCommerce. It’s all the rage today, and it has an enormous upside for supply management teams seeking visibility into their extended supply chains – e.g., from farm to fork, mine to mobile phone, etc.

When connected devices, like microprocessors and sensors, are embedded in tamper-proof packages or shipping containers, synced to Blockchain ledgers, and transmit metadata (including location) via satellite or server, the two innovations can connect the physical supply chain with a digital, immutable ledger. Sourcing, procurement, and auditing teams can track and trace products and commodities at each point along the distributed supply chain. Risk management and environmental, health, and safety teams can examine routes taken, environmental conditions at any point along the way, and quickly isolate suspected production lots (for example, during a product recall).

Final Thoughts

Many solution providers have begun integrating advanced analytics and algorithms into their platforms and solution suites, or have placed their solutions atop a data engine or master data management platform in an effort to make their systems as intelligent and powerful as possible. But it’s paradoxical that while supply management solutions continue to become more innovative and intelligent, the average sourcing and procurement team continues to struggle with basic process automation and solution adoption. Intelligent business systems hold much promise, but unfortunately, not every team will reap the benefits. Only those that are bold enough to embrace intelligent sourcing and procurement solutions will position themselves for the future of business, which is already upon us.


Andrew Bartolini is a globally recognized expert in sourcing, procurement, accounts payable, and supply management. At Ardent Partners, Andrew focuses his research and efforts on helping enterprises develop and execute strategies to achieve operational excellence within their procurement and finance departments. Andrew recently published his 13th annual procurement-themed benchmark research report, CPO Rising 2018: The Age of Intelligence. This year’s study is based on survey data and interviews collected from 341 Chief Procurement Officers (CPOs) and other procurement executives and is available for download by clicking here.

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