AI Shifting Procurement Focus From Cost Control to Strategy

AI Shifting Procurement Focus From Cost Control to Strategy
AI-Driven Tech Is Changing What Procurement Can Offer Organisations, With SAP in the Vanguard of Helping It Hit New Strategic Heights

Until recently, much new tech in procurement has been focused on improving traditional processes with workflow automation, or by providing a slicker interface, but with AI and GenAI procurement as a profession is rethinking how it can deliver better business results. 

AI is proving to be a game-changer, in terms of moving procurement from being little more than a cost centre to being a strategically important business function.

At the forefront of this AI revolution in procurement is SAP. 

In recently launching Joule – SAP’s natural-language, generative AI ‘co-pilot’ – SAP CEO Christian Klein talked of how it has the power to redefine both the way businesses and people work. “Joule will know what you mean, not just what you say,” Klein told the world.

Joule is based on an understanding of customer processes, and can provide organisations not only with intelligent insight, but can also make recommendations designed to deliver outcomes faster.

It will be embedded throughout SAP’s cloud enterprise portfolio, and is aimed at the estimated 300 million enterprise users around the world who work with SAP cloud solutions. Joule will make SAP one of the world’s largest AI enterprises.

It is built to deliver proactive and contextualised insight from across the breadth and depth of SAP solutions and third-party sources, and will make SAP solutions smarter – solutions such as SAP Spend Control Tower.

Control Tower will include advanced AI features to give customers visibility across all spend, helping them uncover cost-saving opportunities and discover process improvements. These capabilities will be available in the first quarter of 2024. 

Speaking to Supply Chain’s sister publication, Procurement Magazine at the recent SAP Spent Connect event, Muhammad Alam – President and Chief Product Officer of SAP Intelligent Spend and Business Network – talked about how AI-driven solutions such as Control Tower are game-changers. He believes the company is creating “immediate improvements in visibility and insight”.

Alam said: “Control Tower allows customers to take the data that cuts across areas including travel and expense, indirect and direct spend, and bring that together into a unified model.” 

He adds: “We apply AI on top of it and then have out-of-the-box dashboards that offer customers critical insights that they can act upon from either within the Control Tower or in the contextual apps that are feeding the data.” 

Alam says that this gives organisations a full view of what is happening, and that he and his team at SAP “think this is pretty phenomenal”.

SAP is also partnering strategically with Microsoft and IBM, to offer support and services to companies seeking to move to SAP S/4HANA, the company’s enterprise resource planning software for large enterprises. The partnership is designed to ensure businesses can migrate to the system with speed, but without interrupting critical business processes.

For their part, Microsoft and IBM are also expanding their AI collaboration programme, including a procurement and source to pay (S2P) solution

The partnership is helping the companies’ joint clients accelerate the deployment of generative AI, and also provide a new offering of expertise and technology to innovate their business processes and also scale generative AI effectively.

The focus of the project is to help clients implement and then scale the Azure Open AI service.

Azure OpenAI Service runs on the Azure global infrastructure to meet organisations’ production needs, including enterprise security, compliance, and regional capacity. 

The S2P solution combines Microsoft Power Platform and Azure OpenAI Service to help automate repetitive, manual and fragmented sourcing and procurement processes. The technology also offers supply chain insights.

The partnership is helping businesses who are looking for ways to adopt and integrate multi-model generative AI solutions that augment their work in areas such as creative content and code creation, content summarisation and search. 

"Together, we are collaborating to deliver innovative solutions that will help customers responsibly accelerate deployment of generative AI," says Dinis Couto, GM Global Partner Solutions, Microsoft. 

He adds: "As a leader in the delivery of generative AI and data solutions, we believe that partners like IBM are critical to enabling customers successful use of generative AI to advance business transformation."

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