AI is a well-established buzzword in the corporate world, yet in practice, is the adoption of AI really taking off? It seems like early days for most.
From what we are seeing in the market, the reluctance to embrace AI typically tends to be driven out of two fundamental issues: an underlying misunderstanding of what AI actually is and an equally deterring confusion around what AI can do.
Without a common everyday language to discuss this aspect of digital transformation, the corporate world will naturally be cautious to implement AI-backed systems or augmented AI processes. To help ease concern, it’s always good to look at some of the myths floating about, while also exploring some of the current terminology used in the world of AI. Once myths are deconstructed, AI can suddenly appear a lot less threatening and easier to implement.
Common AI Myths
It seems that the general term of “AI” is still often misaligned to a particular subset of Artificial Intelligence rather than the whole field of AI, which is vast in nature.
The subset that is often referenced is what many of us recognise as that “robot-looking thing” that automates human decision-making. This concept, formally called Artificial General Intelligence, or AGI, aims to perform any intellectual activity that a human being can perform. AGI is often called a “thinking machine” because it focuses on wholy emulating human intellectual ability. A robotic copycat concept like this can definitely feel scary and threatening in the corporate world, where job security is a delicate topic at the moment.
In contrast, looking more widely at the broader world of AI as a subject area, the term “AI” focuses on the automation of individual tasks rather than looking specifically at the replication of complete human intellectual ability. AI, in general terms, does not look at recreating all aspects of human decision-making and intellect. Instead, it looks at ways to automate human cognition – or specific tasks – to make life easier for us so we can direct our more valuable intellectual thinking to activities that give our lives a better experience.
When we take this distinction between AGI and AI into consideration, artificial intelligence as a tool to automate the steps within business operations becomes far less threatening and, in fact, a very agile and measured approach to constructively accelerate business processes.
Applying Benefits of AI to Procurement
So let’s put this into context within the procurement space. In a recent interview, McKinsey analysts said there were more than 220 distinct activities in the Source 2 Pay process. They suggest that more than 50% of those activities could be automated. Imagine the amount of time that could be redirected on more strategic procurement activities during a work week if that level of automation were to take place.
When we consider that up 20% of time is spent vetting, sourcing and shortlisting services providers for business services, automating some of the routine sifting and shortlisting could wholly transform corporate buying processes. With the application of AI in sourcing, procurement professionals could potentially gain up to a day a week to refocus their time on more complex, strategic initiatives within the business. Maistro has been working with its enterprise customers to understand the current steps that can be streamlined using AI-driven technology and is seeing their sourcing stages reduce remarkably from several months down to just a few weeks.
Tips to help you augment procurement using AI
With the potential benefits in time savings alone, it seems almost irresponsible to be casting a blind eye upon AI solutions. If your business is just beginning the process, you can be confident that applying AI is achievable and can be done in a methodical, cost-effective way.
Looking specifically at streamlining procurement operations, begin by segmenting your company’s unique process into parts as an initial first step, as every business naturally has individual, bespoke requirements.
- Step 1: Look at your business process end-to-end.
- Step 2: Define the steps uniquely used in your business.
- Step 3: Quantify how much time is currently spent across each of the steps.
Once you have clarity around the finer details within your own business operations, you are in a position to see if, and how, AI can drive automation and help to make your business more scalable.
If this feels daunting, due to limited bandwidth within your team, you can discuss your approach to AI with industry players who are already utilising AI to streamline operations. Maistro actively engages in AI development particularly focusing on the potential benefits for sourcing and procurement professionals.
Above all, enjoy the ride. Digital transformation and AI will continue to weave their way into every business. Every company is on a journey to see how it will impact their individual operations. The only mistake any business can make is to resist the change that is taking place.
Want to discuss AI within procurement with an expert? Get in touch. We’d be happy to talk with you.