The power of AI in accelerating growth
Companies that invest in new technologies like AI to increase their agility and resilience will be best placed to succeed as the global economy rebounds, writes Globality’s Chief Revenue Officer Keith Hausmann.
Business leaders have, for some time now, found themselves under growing pressure to inject a greater degree of flexibility into the operating models and offer their stakeholders a more satisfactory experience. The impact of the Coronavirus pandemic has only added to this pressure, forcing businesses everywhere to adapt to new ways of working and requiring executives to shift their focus toward finding new ways of achieving new levels of resilience and adaptability. Ultimately, the events of 2020 have served as something of a wake-up call for businesses everywhere – although resilience and adaptability have always been important to the success of a business, they have now become essential.
Adaptive and dynamic value chains are heavily reliant on businesses having access to the intelligence that will allow them to respond immediately to both internal and external changes. As has been highlighted by the recent disruption, the use of innovative technologies such as artificial intelligence to automate an organisation’s core processes is critical to its ability to achieving better and faster results. The importance of the procurement function in enabling the necessary transformation cannot be underestimated. By reimagining current capabilities and embedding AI-powered analytics into an organisation’s business processes, it will allow users to access and act upon valuable information and insights, creating opportunities to achieve new levels of business performance.
Reshaping the future of procurement
An agile and flexible organisation is able to anticipate when change is needed and act decisively – sometimes even before that change is required. Flexibility also means being able to adopt innovative practices and identify market opportunities before the competition. So it’s perhaps unsurprising that those leaders who demonstrate the combined traits of agility and flexibility are reshaping the future of procurement and delivering unprecedented value to their businesses in a number of ways. For example, they’re able to:
· Enjoy immediate access to best-fit suppliers for all required goods and services
· Provide a seamless, self-serve experience for all business function stakeholders
· Streamline communications and collaboration with their suppliers
· Capture feedback on supplier performance to inform future procurement decisions
Unlocking a competitive advantage
The ability to respond rapidly and dynamically to external and market changes across the entire value chain, while maintaining a focus on innovation is how agile companies gain a competitive advantage. By way of illustration, McKinsey’s 2019 global survey on AI adoption reveals that, in supply chain management, 14% of businesses reported a cost decrease of more than 20% following the adoption of AI, with 16% reporting a cost decrease of between 10 and 19%. At the top end of the scale, 13% of companies said they had enjoyed revenue growth of more than 10% since adopting AI technology, with 22% claiming to have seen a revenue increase of between six and 10%.
Delivering greater value to the business
Suppose they are to be truly agile and adaptive. In that case, it’s vital that business users have immediate access to all the information they need and delivered to them in a seamless and intuitive way. The implantation of technologies such as AI and machine learning can facilitate this and, by doing so, allow those users to be more efficient and reallocate their time away from time-consuming manual tasks to other activities that will deliver greater value for the business.
Indeed, forward-thinking, transformative procurement leaders are already using innovative technologies such as these to better manage and mitigate risk, to automate and bring greater value to a more manual process, and to identify new and emerging market opportunities.
Planning for the future
Among its many effects, the disruption brought about by the Covid crisis has highlighted an urgent need for business leaders to builder greater adaptability and resiliency into their operating models so that they can respond more effectively to future challenges and maintain a competitive edge – even in times of great uncertainty.
There are steps that can be taken now. Upskilling the procurement workforce, for example, and more widely embracing the use of innovative technologies such as AI and machine learning will provide the flexibility, agility, and intelligence that’s needed across the entire value chain.
As has been proven over recent months, those companies that make these investments now – in skills and in technology – will be in the best position to minimise the impact of any future disruptions, and to deliver long-term growth and value, as well as the best possible experience for their customers, suppliers, and other stakeholders.
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Businesses are under more pressure than ever to improve the flexibility and agility of their operating models. By investing in the right new cutting-edge technologies to automate outdated manual processes and deliver AI-powered insights, procurement leaders can play an important part in easing that pressure.
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