Procurement: Embracing Technology for a Better Future

Exponential technologies are no longer just buzzwords. They can now play a key part in the next stage of procurement and supply chain’s evolution. Digital transformation has already started to affect a multitude of industries and in order to keep up, procurement and supply chain businesses needs to universally embrace it.

Understanding Blockchain

Blockchain can be best described as a digital database that logs transactions, although it’s a little more complex than that. In a sense, it’s not what it is, it’s what blockchain can do which identifies it as an exponential piece of tech.

With blockchain, a group of computers will verify and store every transaction and link it to the previous one. The huge benefit of this is that it can enable us to trace transactional histories, which will provide valuable data. Blockchain is also decentralized (peer-to-peer), making it harder to tamper with.

Understanding AI

Most people have their own idea of what artificial intelligence (AI) is, but generally speaking it is machine learning -- the creation of a "computer mind." It’s a part of computer science that aims to create intelligent machines. It is generally broken down into these main areas:

• Speech recognition
• Learning
• Planning
• Problem-solving
  
  We have many examples of AI already, from Apple’s Siri, to Amazon’s Alexa, to self-driving cars.

  Blockchain and AI as part of the procurement process

  How can both of these exponential technologies improve the current procurement process? One example is to automate procurement’s spend management process. However, companies will need to have the right set up in place for spend and contract analytics before introducing AI on this level. This set up must include the implementation of e-sourcing, be configured procure-to-pay solutions, and have all contracts stored in a contract repository.
  
  A blockchain process can help secure transactions against fraud in procurement invoice management. With blockchain, the data in its information stream is incorruptible. From the beginning to the end of the process, invoices would have to be verified by suppliers and buyers at every step. If someone wanted to commit fraudulent acts, they’d be unable to and cyber-attacks would be fruitless.
  
  This is because a blockchain process enables a decentralized flow of information. The decentralized approach means that cyber-attacks would have no impact as the invoices are not stored in any one place, but spread throughout a network of computers. It’s a key selling point in the process and allows businesses to be protected from revision, tampering, and accidental or purposeful deletion.
  
  To take advantage of these technologies, it’s clear that procurement and supply chain is better placed not at the perimeter, but at the heart of the decision-making process. The foundation for this phase can be put in place by refining their existing IT infrastructure.
  
  Both of these technologies present opportunities for an organization to re-evaluate the existing processes. Blockchain merged with AI could mean that procurement and supply chain can implement key ‘thinking points’ within an organizational structure, and look forward to a more streamlined, automated way of working.
  
  If you would like any more information, or want to discuss how we can help with your recruitment needs, get in touch with your local office of specialist consultants for a confidential discussion.