XtractEdge Procurement Insights – Procurement Challenges addressed with AI

Digital transformation in an enterprise is taking place at all levels, including all functions of the business and impacting every process – Procurement being no exception.

If you are part of the procurement team or work with them on a regular basis, you are well aware of the pressure to deliver savings, manage supplier relationships, and maintain process excellence. In a conventional environment, you would be involved in a time consuming effort of organizing data manually, and arriving at insights from it with the help of your team. This in most cases might not result in an absolute insight. Right?

Recently, a large Australian Financial Services Provider, who has over 15 thousand employees operating in 30 countries was faced with multiple challenges. The company had poor spend visibility, discrete technology base with complex business processes, lack of price benchmarking, reconciliation and sourcing capabilities and a fragmented supplier base that led to inefficiencies in managing spend and operations.

Challenges such as spend management, decision support through prescriptive analytics, increasing compliance rates, efficient procurement task management, or effective risk mitigation arise due to lack of information, lack of access to information, and non-integration of data. These challenges if not addressed on time, with proper measures, could either delay or end a prospective project.

We implemented XtractEdge Procurement Insights for spend visibility with SAP SRM (P2P) as the underlying ERP system, and redesigned the purchasing framework to route requirements to appropriate purchasing method. The client experienced a 10-15% reduction in spends, a significant increase in compliance and efficiency and reduction in maverick spend and better insights with transformed processes and technology, purchasing system, helpdesk tools and payment operations tools.

Spend analysis is undoubtedly an essential function of procurement and when correctly performed, it can lead to insightful findings and better savings, and often act as a catalyst to drive business decisions for a company. XtractEdge™ Business Applications such as XtractEdge Procurement Insights deliver business relevant insights around sourcing & procurement, by automating procurement data ingestion and data management activities, classifying spends into right categories using Machine Learning techniques, generating predictive spend analytics (what-if and forecasting analysis) and highlighting guided opportunities to aggregate demand, optimize price, rationalize suppliers, and adhere to compliance and more.

Machine learning (ML) and Automation unlock new means to address these problems and drive the next wave of transformation of procurement function. XtractEdge Sourcing & Procurement Business Applications leverage these technologies to simplify procurement processes, enhance user experience and deliver insights and recommendations for higher process efficiency and cost optimizations.

This will enable enterprises to create best in class procurement practices, identify opportunities to reduce costs and improve risk management.

In short, AI is permeating all levels and functions of a company and when adopted in data driven functions such as procurement, it can definitely bring out the best results, help us perform better and enable businesses to flourish.