All posts by Sami Peltonen

Helping Procurement Professionals Embrace AI

Given the inevitability of emerging technologies transforming businesses, how can you prepare your company for AI’s impact on procurement and mitigate employees’ fears?

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Artificial intelligence (AI) has begun to infiltrate all areas of businesses – and procurement is no exception. In fact, studies show that 88 per cent of business leaders believe automation will significantly impact the procurement space within five years.

The biggest projected impact that advancements in AI technology will have on procurement is increasing the number of activities that can be automated within this space. It’s expected that 60 per cent of source-to-pay processes can be fully or largely automated using emerging technologies, including AI.

The promise of AI technology and automation in the procurement space is exciting – it offers opportunities for increased efficiencies, greater visibility, fraud prevention, cost savings, and more. However, it also induces a level of fear and uncertainty around how it will impact the role of procurement professionals.

Given the inevitability of emerging technologies transforming businesses, how can you prepare your company for AI’s impact on procurement and mitigate employees’ fears?

1. Distinguish “tasks” from “roles”  

When AI and automation enter conversations about how work can be transformed, they bring with them a sense of fear and unease. It’s only natural that people begin to ask themselves, will there still be a need for manual and human skill? Will my role be replaced by a machine? Will I soon be out of a job?

Easing these concerns will require focusing on what exactly will change. AI, as the building block for automation, fundamentally affects how tasks are performed. That’s why companies should emphasise automation’s potential on impacting tasks within procurement, rather than looking at how roles themselves will change.

It’s hard to say which – if any – roles will go away over time due to automation. However, it is safe to say that every role will likely still exist in some capacity, but that certain tasks within each role will be automated, thus redefining existing roles and opening the door for employees to focus on higher priority responsibilities.

Rather than allowing employees to become fearful, help them prepare for change by empowering them to understand which tasks and activities in their roles are and are not likely to be touched by automation. For example, the majority of tasks within the vendor selection and negotiation process can and will be automated, meaning that role will shift to incorporate other tasks that couldn’t have been part of the role before, given the volume of manual vendor selection tasks.

Moreover, identify the skills that will be required for employees to excel in their shifting roles – such as data analytics and collaboration skills – and invest in training employees on those skills. This will ensure that employees can work effectively with AI and automation technology, and ultimately feel prepared for the inevitable shift.

2. Stress the importance of human critical thinking 

Another way to prepare your company and its procurement professionals for AI and automation is to turn the definition of AI upside down, taking negative assumptions about how this technology impacts professional roles and asserting a more positive interpretation and understanding of this change. Instead, business leaders should discuss how AI will be used to augment their own intelligence.

While employees may wonder whether they will be replaced by AI and automation, it’s important to stress to them that people will continue to play a critical a role in whether these technologies can even be successful. For instance, while AI can make recommendations around business decisions and procurement processes, the AI is not responsible for executing these recommendations – people are.

To help employees overcome fears around AI and learn to better work with this technology, companies must place an emphasis on the importance of the critical and systemic thinking. By teaching people how to recognize biases and heuristics in their own decision-making, employees will be well-positioned to critically review AI’s suggestions, and connect information from the real world to make optimal judgements. AI will not replace managers – but managers that use AI will replace those who don’t.

3. Go beyond the business case

 The business case for automating procurement with AI is already there – that’s why 51 percent of today’s accounts-payable organisations are already prioritizing the link between procurement processes and associated automated systems. What’s important now is getting your employees to buy-in and fully embrace AI to ensure successful implementation of and execution with this technology.

While initial reactions may be full of fear and skepticism, business leaders must remember to communicate with employees empathetically, helping them understand anticipated changes, investing in preparing them for these changes, and re-positioning the impact of this technology more positively so that it becomes something employees can get excited by.

By getting procurement professionals ready for AI’s impact, business leaders can empower them to do their jobs better and grow with the company as it undergoes this inevitable transformation, all the while setting their business up to reap the benefits of AI and automation.

One Step Closer To Invoice Automation…

How can smart coding functionality take invoice automation one step further…?

Depending on your organisation, the maturity of your invoice processing is likely varied even across your own internal workflows for different invoice types.

And like many others in your shoes, your goal is to get those things as automated as possible – regardless of invoice type – and shoot for 100 per cent invoice automation. The good news is full invoice automation is an attainable goal with innovation available in e-invoicing solutions today like smart coding.

What is smart coding?

Smart coding helps customers further automate their invoice processing of non-PO invoices, going a step further towards touchless invoice handling. With smart coding, invoices that are not automated by purchase order matching, payment plans (schedule, budget or self-billing), or automatic coding templates can now be automatically coded with minimal human interaction.

Why should you care about smart coding?

Smart coding speeds up invoice processing and improves productivity.

Traditionally, non-PO invoices are automated with business rules that are very laborious to manage. Finding a correct cost allocation is typically a challenging task for employees who are not familiar with bookkeeping rules, especially when there is no purchase order to copy information from. It requires the AP clerk to spend a lot of focus on this type of invoices – researching the origination of the invoice, reaching out to others in the business to ask questions and making an educated guess as to the best place to code the invoice. All of this takes time and often delays payment of non-PO invoices.

Smart coding automates those manual steps, so employees can easily code an invoice with a click of a button to automate more of the process. The solution leverages big data to analyse historical transactions, ultimately providing a highly reliable recommendation to the user that can also be complemented with business rules. Not only does this simplify the process for the user and save time in processing the invoice, it also reduces the need for the AP department to rectify erroneous coding lines at month-end.

How does full invoice automation prepare me for the future?

Everyone is talking about machine learning and AI – and invoice automation and e-procurement are certainly areas of application for these emerging technologies. But there a couple of things you must do today to ensure you’re ready when those technologies become the new norm. Use smart coding to help you:

  1. Automate as much as possible: Machine learning and AI are layered over systems, so you want to be as streamlined as possible in preparation for those applications. To do this, set your goals on a high level of automation. And this doesn’t just mean adding technology over clunky processes. As you mature your systems and strategy, make sure you’re re-engineering processes where necessary so workflows are optimized too.
  2. Get financial data: One major benefit of full automation is the central collection of all your financial data in one solution. Data is what feeds technologies of the future. Machine learning and AI are not effective in purchase to pay without a complete, ever increasing source of financial data. If you want to embrace machine learning applications, capture every possible piece of financial data in your purchase-to-pay system today.

Basware has the most advanced invoice automation solution in the world and we’re constantly improving it. Based on 30+ years in the industry, we’re rolling out features and functionality that continue to deliver the ultimate efficiency benefit to customers. With the largest open network, we have the unique ability to capture the most data across customers and combine that with third party data to deliver what customers need now and in the future.