In recent years, the procurement departments of companies around the world have revealed their true power and influence. When freed up to operate independently and strategically, these teams can set the tone for their whole organizations' efficiency and effectiveness. Sourcing is a function that touches every era of a business - every item and material used by the the company has to get there through procurement, which creates the potential to generate meaningful change.
Upgrading the software used by procurement professionals is one way to have positive ripple effects on the whole organization. Sourcing professionals equipped with the latest and most efficient digital tools may spot valuable opportunities invisible to less-advanced teams. When such a deployment has its full impact, executives will see a quick return on investment.
What's next for procurement software?
As Supply Chain Digest recently explained, some of the spend analytics systems in use today are dragging sourcing departments down. The news outlet quoted Gartner analyst Patrick Connaughton, who indicated legacy software in this category has fallen behind the latest wave of potential replacement options, and the next four years will see 50 percent of old-fashioned spend management tools decommissioned and replaced.
The problem with older spend-management systems, according to Gartner's analysis, is that they are designed to answer users' questions, rather than going beyond those parameters and delivering unique or novel insights. Artificial intelligence technology is constantly becoming more effective, and the latest generation of solutions, based in the cloud and able to work from larger and more varied data sets, may deliver more helpful information and make a material impact on decision-making.
Connaughton sees an opportunity for new entrants to the spend analytics field to quickly surpass the legacy providers currently operating in the space. The innovation introduced by these aspirants may be a simple combination of business intelligence and AI. Equipped with these new and more insightful kinds of spend analysis tools, procurement managers could make novel and exciting discoveries that set up their whole organizations for success.
The useful applications of AI are coming into focus, and that makes the current moment an exciting time for software developers. That said, it may seem to supply chain professionals that they have heard about AI's promise for years, but not gotten the results that would back up the expectations. According to Forbes contributor Bernard Marr, however, 2018 will represent a turning point. While in the past, the amount of promotion and anticipation directed toward AI outstripped the tangible business effects, the ratio is set to change.
Marr specified that in 2017, there will be a concerted movement toward making practical use of AI in everyday business functions. Compared to previous years' efforts, which largely focused on proof-of-concept demonstrations rather than actual software development, the AI field in 2018 will be a must-watch sector for employees who want to keep their companies ahead of the computing curve. While some major efforts to tap into AI's power will fail, the realization of potential benefits and climate of focused investment mean the chances of success have never been greater.