AI to improve
decision-making in

Leveraging data for success

December 2019

As technologies like AI and RPA continue to establish a firm position in the mainstream, they are driving a fundamental change in businesses across sectors, globally. Marketing, operations, product design and finance are just some of the areas transformed by intelligent application. Now, as companies start to seek, and create competitive advantages, the procurement function is in the spotlight. Typically resistant to change and reliant on manual methods, procurement departments tend to be slow when adapting to technological developments. However, digital transformation in procurement is starting to become a priority for CXOs, indicating that the time for progress is here.

Priming Procurement for Intelligent Digital Transformation

So, what is the best way for the procurement function to leverage disruptive technologies and help enterprises secure a sustainable competitive advantage?

Much has been said about the need to view procurement departments as vehicles of value creation and not just spend management functions. As a data-rich activity, ripe for digital transformation, procurement is primed to generate incremental value for businesses that take its development seriously. Our recently published report “Digital Transformation in Procurement: How Close Are We?” based on a global survey, revealed that most progress had been made with the automation of supplier management, procure-to-pay and spend management processes. Some of these processes are supported by Artificial Intelligence, for example, to map inbound supplier invoices for automated data entry.

However, our survey showed that procurement leaders had some doubts about where to go next with AI because, in reality, the use of AI and RPA in procurement is still in its infancy. Even chatbots and guided buying are not transformational – they do have efficiency benefits but do not fundamentally change the way you procure. At JAGGAER, we have customers who are at very different life stages of digital maturity, and we are continuously helping them explore new ways to derive higher value from their procurement function. Ultimately our focus has been about how AI can help make decisions faster and with accuracy whether that be for smarter sourcing, identifying risk factors in supply chain or contract compliance. That focus requires specialist knowledge, and we are convinced that procurement software vendors can make rapid progress by partnering with AI & RPA specialists, as JAGGAER is doing with EdgeVerve.

Any procurement transformation project powered by intelligent technology will need to be comprehensive, easy to adopt, and scalable. The key to the success of such projects will be the creation of robust supplier collaboration solutions through the continuous collation of data from many sources and incorporation of the lessons learned from such data into an algorithm capable of delivering these solutions autonomously. These data sources typically include the end customer’s approved supplier network, third party supplier networks, and private company information supplier networks.

Creating a Culture of Data Excellence

Data can drive informed decisions and accelerate growth. One of the primary uses of AI in procurement is bringing together internal and external data to make faster decisions with higher accuracy. AI is built to find patterns, correlations, and identify alarming trends. At this point, it is crucial to understand that machines can only learn if the data used is clean. Accuracy, completeness, and consistency are prerequisites for benefiting from AI.

By Greg Holt
Solution Marketing Director,

The most prominent challenge facing organizations is a lack of connected systems. Departments across industries often work in silos and interact with each other only when they need information from the other.

Since data resides in so many different systems managed by disintegrated departments, it becomes an almost impossible task to have a 360° view of all the data available. Add to this the challenge of connecting internal systems with external data sources, such as supplier databases, and it becomes easy to see that the task is as complex as the opportunity is attractive.

[*1.2]In Deloitte’s 2018 survey of chief procurement officers, more than 45% of respondents believed a lack of integration and poor-quality data were critical barriers to the practical application of digital technology. To reap the rewards and benefits of AI, there needs to be a more strategic focus on data governance and ownership. There’s merit in seeing the digital transformation of procurement as a marathon with a series of sprints, as opposed to a one-off dash to adopt new technology. Intelligence must be integral to the procurement function to deliver truly transformational value.

Harnessing the Power of Data

Cleansing and consolidating your existing data is a good start point to data excellence; whether that be looking at your category strategy or the supplier segmentation structure. A central repository for all data, with a clear process in place to maintain the accuracy and quality of the data, is central to augment the value of data. Data governance is an ongoing task. Supplier databases can change, certifications and audits require update; new information needs to be managed in a systematic way to make it valuable. New suppliers will need onboarding, existing supplier details will need updating, and redundant suppliers deleting. With a clear structure in place and AI-enabled procurement platforms, you can now simplify and streamline this process to bring more efficiency into your systems and functions. Once established, your business can start to function with increased clarity and efficiency, with decision-making supported by a ‘single source of truth.’ Also, the cohesiveness resulting from a holistic view of organizational data ensures that every department is aligned with the broader strategy and goal.

What is clear now is that no matter what the stage of your organization’s digital maturity, the ability to test, learn, and repeat with AI and RPA projects using short cycles provides a vast opportunity. Intelligent and pragmatic transformation is integral to companies achieving competitive advantage in the procurement function, and consequently in their business.

By Greg Holt
Solution Marketing Director,