Why the Future of Procurement is in Artificial Intelligence & Blockchain
This blog has been reviewed and edited by: Rachael Renovah
Procurement Revolution 2020: Are you Ready?
We live in a world where new discoveries and inventions are taking place every day. It can often feel like your organisation is walking up a descending escalator, and it doesn’t make it easier when your competitors are too. To be competitive in the real estate scene, organisations must adopt tools with newer technology and trends for that extra competitive edge. The procurement scene within the Real Estate industry, for example, is one such segment where it is still saturated with traditional processes that aren’t coherent with the age of digitalisation.
Procurement teams need to keep up with the digital age by doing away with traditional processes and embracing new methodologies and solutions that help professionals work better and smarter. Real estate players must be prepared for what’s in store for 2020 as the wave of procurement revolution becomes more prevalent.
Procurement Revolution 1: Growth in Artificial Intelligence
The rise of Artificial intelligence (AI) can be particularly valuable within procurement. There are many solutions that utilise AI technologies in various ways to help real estate companies automate repetitive and mundane tasks. These solutions usually posses a predictive technology that aid in recommending relevant solutions based on users’ purchase requests automatically.
Intelligent bots
Intelligent bots, for example, can help companies complete routined procurement tasks through auto-pilot mode with minimal human intervention – undertaking activities relating to negotiation processes, updating inventory lists and turning manual tasks to automated ones.
Machine Learning
Intelligent bots usually require the incorporation of Machine Learning technology (ML), where it learns multiple patterns on various processes to accomplish tasks. Procurement professionals can leverage on ML solutions to analyse needs, source planning, and source plan management.
Data Mining
Data Mining, a form of data analysing technology, can help detect unpredictable patterns within data. It does so by processing large data sets into actionable data insights, which could prove valuable for real estate projects focused on building sustainability.
Why Artificial Intelligence solutions?
After surveying 180 large companies, Hackett’s report suggests that only 32% of procurement professionals have turned to the digitalisation of procurement workflows as part of their new strategy. It is a drastically low number considering the fact that over 80% of them have reported believing that the future of procurement lies in digital transformation.
The use of some of these AI technologies, especially procurement technologies, can not only help reduce human errors, eradicate laborious and repetitive tasks, but also make smarter, well-informed decisions that reduce the chances of inventory shortages, excess inventory that helps speed up the tendering process.
Procurement Revolution 2: Blockchain-based infrastructure
Data Security
Blockchain-based infrastructure within the procurement process, is a digital ledger of sorts. It records and tracks all data related to goods and services. Every single transaction, payment, and financial information is accessible on a public domain, which increases transparency and security. It is ideal for tendering transactions due to the ability to trace modifications and sources – greatly reducing suspicious and malicious transactions and elevating accountability.
Another way of securing data is through advanced cryptography techniques or setting up a private blockchain as opposed to a public blockchain. This way businesses can secure critical information, certificates and other crucial documents within a permissioned environment.
Smart contracts
Placing orders and processing payments manually can be fairly cumbersome especially when in large volumes. The integration of another type of block-chain technology to aid in smart contracts can resolve just that. Smart Contracts, a set of executable code that runs alongside a blockchain application, automatically negotiates, identifies, and close deals across a supply chain without the need of a trusted third party.
Why Blockchain solutions?
The adoption of a permanent, untampered record-keeping technology such as blockchain-based infrastructure avoids delivery risks, potential frauds, cost and quality risks and much more. Real estate professionals can experience greater transparency, enhanced security, improved traceability where transactions are completed faster, safely and more efficiently.
Procurement Revolution 3: Integrated workflow solutions
Procurement, part of a larger workflow, with phases including simplifying task assignments, tendering processes, change request management and documentation, is only but one of the various other stages of a project management cycle.
With that, comes the emergence of integrated workflow solutions that increases visibility across stages. Such solutions help companies gain better control over projects, which is far better than just adhering to better time management practices.
Organisations such as Resort World Sentosa, TRANGLO, Microsoft, Olympus, and SingTel have since adopted the use of integrated workflow solutions to help increase efficiency by automating accounts payable and purchase requests, eliminating man-hours spent on manual invoicing and reducing potentially costly human errors.
Businesses should ask themselves two questions:
1. If digital is part of your corporate strategy moving forward?
2. How can your organisation leverage emerging technologies as a competitive edge amongst competitors who are now riding the digital transformation wave as well?
Start with transforming procurement practices into e-procurement processes with tools that just that – integrating project management, e-procurement, and open marketplace practices.
Are you set for the procurement revolution to come?
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