As technology advancements continue to rapidly improve, companies are exposed to a large amount of new tools and methodologies to enhance their business practices. With special regards to procurement, many professionals have been raving about the rise of a few recent developments: cognitive procurement and cognitive computing.

There is a growing demand for artificial intelligence (AI) to help organizations continue to grow by improving efficiencies, developing better strategies, and enhancing their level of competition within the market. The main idea behind AI and cognitive computing is often that humans program the computer to perform certain tasks to allow companies to shift resources elsewhere. However, with cognitive procurement, the computer is programmed to perform tasks and solve problems with human-like thinking, as if it were a human were the one performing the work. Though the two are very similar, many times they are mistaken for one another.

Within cognitive procurement, many tools have been developed to alleviate some of the day-to-day pain points in a company’s procurement department. Some examples of these tasks include replacing purchase order systems, automatically generating product forecasts, identify and evaluate suppliers, and even contract analysis. There is opportunity for process automation that is associated with cognitive procurement, which leads to quicker task completion rates and a higher productivity overall as the business is able to achieve more efficient operations.

Aside from the daily tasks that cognitive procurement and AI systems are able to assist with, they are able to improve the way a procurement team develops their strategies. These systems are able to rapidly comb through any size of structured or unstructured data sets understand the information involved. IBM’s Watson is a primary example of a system that is capable of sifting through large amounts of data and drawing conclusions and possible action items from the information collected from the data. With such emphasis put on developing these types of tools, companies are able to strategically place resources in other areas of the business, while maintaining resources to work with the cognitive procurement systems.

Many companies are getting involved with improving their knowledge of the topic as well as implementing these systems in their own operations. While implementing these tools and developing better strategies, another key idea behind cognitive procurement is the enhanced ability to make more informed decisions at a quicker rate. The idea of making stronger, faster business decisions has become a major driver in the rise of cognitive procurement because it significantly adds to the continuous process improvement and higher productivity that companies are constantly striving to achieve.

The main reason that cognitive procurement is a recent hot topic is because it is enabling professionals to engage in intelligent sourcing, where sourcing events such as Request for Proposals (RFP) and supplier identification are automated and more efficient. Along with intelligent sourcing activities, these systems are also able to assist with contracting and make the negotiation process much more effective, in addition to eliminating time spent on these various processes. With automated assistance in these crucial areas of procurement, companies are able to better strategize and make much more educated decisions in a shorter amount of time. As a result, businesses are able to make themselves more competitive within the market in addition to pursuing greater opportunities to differentiate core offerings to current and prospective clients. Ultimately, the new tools and technology advancements that are being developed are paving the way for companies to drive new innovation, become more efficient, and keep up with the competition, and cognitive procurement has proven to become a major player in the way businesses are transforming.
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Samantha Hoy

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