Previse: Immediate supplier payment through AI technology
In the modern connected world, consumers demand speed. Cashless payments are hardly a new phenomenon, but as technology continues to redefine the global landscape businesses are having to embrace this change or fall behind. The question then becomes one of: if a consumer can receive instant payments or cash exchanges, why should it be any different for suppliers? This is where Previse comes into play. Powered by Artificial Intelligence (AI), Previse enables corporate buyers to safely ensure they pay all their suppliers instantly – eliminating the need to rely on expensive short-term credit, lowering costs for buyers and giving SMEs the confidence to reinvest in growing their businesses. For Paul Christensen, co-founder and CEO of Previse, providing an innovative platform that could enable immediate payments for suppliers was something of an opportunity. Having worked in the fintech space for more than 20 years, he has seen first-hand the biggest challenges the market faces as technological innovation continues to accelerate. “It’s such a huge problem and therefore an opportunity,” he says. “No one has cracked it yet. So, Previse was built on the idea of being able to tap into that opportunity.”
Previse works with large corporates – which receive millions of invoices on a daily basis due to their vast supplier networks – and uses AI to predict the small number of invoices that are unlikely to get paid. It then pays them immediately, charging a small fee. Historically, paying invoices to a large supplier base is a complex and laborious process. “Previse does something that no one has ever done before: It forgets that process,” says Christensen. “Every large corporate has a huge amount of data sitting in their ERP systems. This goldmine isn’t being touched by anybody, so we go through that data and make predictions. Previse allows companies to use data, rather than process.”
The premise is simple, but the execution is not without its challenges. Working with some of the largest corporate organisations from around the world brings with it a level of bureaucracy that can complicate the process. Christensen strips it back further and looks at the current AI or digital conversation that large-scale companies are currently having and highlights that these are mostly focused on the front office, such as advertising and customer experience. “They aren’t thinking enough about the back office, like procurement or accounts payable – the whole supply chain ecosystem,” he says. “The back office is kind of low-hanging fruit, that’s where you can make the biggest difference. We are showing that we can make the biggest difference with Previse and companies are starting to realise this.” While Christensen can point to success on this front, he admits that it is still a gradual process of “changing the way companies think”.
The latest innovation or implementation of game-changing technology is one thing, but convincing people that their business should invest and join the conversation is often met with a little scepticism, even in the midst of the Fourth Industrial Revolution. The importance of being able to demonstrate the value of what Previse can offer is vital, be it through return on investments (ROI) or displaying a strong portfolio of leading businesses that the company works with. For Previse, it’s about working with companies to recognise how mission critical supplier payments are to a business. “How you pay your suppliers, your relationships with your suppliers, your supply chain and procurement functions are all really mission critical for most companies,” says Christensen. “It cuts across a lot of different functions and so that means change is hard. We are working with big organisations and delivering value to them and we are overcoming the barrier to succeed. We haven’t cracked it yet, but we are getting there. This is such a big issue and we are the only one with a solution. We’re getting over those hurdles in a big way.”
Previse is powered by AI and machine learning. Through binary classification and deep neural networks, the company will measure the 20-30 features of information that make up an invoice. This includes the category of spend, identity of the supplier, location of the supplier or even the currency in which the transaction is conducted. Previse will then examine past behaviour in response to that feature to predict the appropriate response. “The concept is a simple one really,” says Christensen. “We can use this information and look at the next invoice that comes in and say ‘well, the probability of this supplier being paid on time is X’ and then work to pay them immediately.” Not only does Previse allow the immediate payment, it also identifies risk. By looking at the features of an invoice, the AI solution can look at an invoice from somewhere like London and compare it to an invoice from elsewhere across Europe and it analyses the risks involved and where delays could happen.
With technology, there is no silver bullet solution that fits all contexts, and many businesses in many sectors struggle to determine the clear advantages and values of specific innovations. Christensen acknowledges this and, as a result, places great importance on transparency in Previse’s business model. Transparency allows Previse to further highlight the value it can bring to its customers. “Everybody wants transparency, but do they really?” asks Christensen. “It’s easier for smaller businesses to have greater transparency, but even for the larger ones transparency is good. Revealing how long it takes to pay small suppliers is a corporate social responsibility issue and so we work to improve the transparency conversation.”
How Previse achieves this is by being very transparent in its own operations. The company charges a fee for its service. SMEs that use Previse will receive instant payments and will pay a 1% fee per month for using the service. “Previse is very open about this, it’s a simple price that we outline very early in the process,” says Christensen. “If a company has 30 days of payment terms on a £100 bill, they can be paid instantly for a £1 fee. It’s as simple as that.”
Previse is growing fast. In just over three years it has amassed a strong network of large organisations that utilise its services. But what does the future hold? There is close to US$125bn in B2B commerce in the world right now, a figure that will only continue to rise and so fixing the “core problem” will prove crucial in the years to come. Christensen hopes that Previse’s success will invite new entrants to the market. “I’d be disappointed if we didn’t see any,” he says. “This is a ginormous market, it’s not winner-takes-all. There absolutely should be others as it will only further the conversation, allow us to offer improved services and ultimately fix that problem.”
By Paul Christensen, co-founder and CEO of Previse.
Upgrading RFID and Automated Track and Trace Solutions
During the COVID-19 pandemic, global supply chains faced the challenge of rapidly adjusting their business priorities to new customer preferences. Local supplier backlogs, winter storms, and the Suez Canal backup in March underscored the need for efficiency and visibility across the supply chain.
According to Christof Backhaus, Digital Lead Product Supply and Smart Label Project Lead at Bayer, companies must now place critical importance on tracking and tracing their products. “All large enterprises in the world dealing with finished goods,” he said, “seek functional and technical solutions to real-time channel inventory.”
Indeed, RFID’s real-time tracking data allows executives to make quick, well-informed decisions in moments of supply chain crisis - and rather than unfolding across days or weeks, it only takes a matter of minutes.
Why does RFID remain relevant despite digital disruption?
Essentially, RFID uses radio frequency waves to transfer data wirelessly between a scanner and a tag. In contrast to barcode technology, which requires a stationary scanner, RFID tags can be pinged from anywhere in the world, allowing companies to track real-time movement through the supply chain. RFID tags can also scan unique SKU numbers and distinguish between varying product sizes, colours, and styles: a critical feature for increasingly personalised end-user products.
Though the first patent for RFID tags appeared in 1973, higher accuracy rates, lower costs, and advances in sensor and data technology have made it newly accessible to a wide range of companies. Today, the technology is used in logistics networks, manufacturing and delivery networks in the pharmaceutical industry, and any business where efficiently tracking and monitoring product location is critical: raw materials, consumer products, cars, electronics, retail, and agriculture.
What are the key benefits?
Overall, automated track and trace solutions keep labour costs low, optimise operating costs, mitigate security risks, use capital effectively, and assist companies in adhering to regulatory requirements.
Below are three in-depth dives into how RFID benefits major industries:
- Pharmaceuticals: RFID tags help manufacturers safeguard sensitive products such as vaccines, tracking where they are and when they will arrive in real-time. Sensors closely monitor temperatures to ensure regulatory compliance. If anyone tampers with a shipment, the sensors alert the company.
- Logistics: RFID identifies process gaps and frequent anomalies by monitoring a product’s lifecycle from shipment to delivery. This data helps decision-makers predict the most efficient routes and therefore optimise their distribution schedules.
- Retail: Sensors help guard shipments against theft and provide critical intelligence when shipments go missing. Before adopting RFID technology in 2203, UK retailer Marks and Spencer relied on barcodes to scan inventory. When they made the switch, their productivity increased from a maximum of 400-600 items scanned per hour to up to 15,000 items scanned per hour. Building on their initial success, the retailer expanded the use of the technology and is still using it today.
Regardless of the industry, RFID promotes accuracy, immediacy, and efficiency. Companies reduce human error by automatically scanning products, keep track of inventory even in geographic locations with poor connectivity, and help streamline warehouse operations by identifying exact product locations.
Which recent innovations have changed the game?
With recent developments in cloud technology and IoT, a multitude of cloud-based alternatives have emerged to challenge traditional RFID technology. One of these cutting-edge solutions is Sony’s Smart Label - an intelligent shipping label that runs on AT&T’s global cellular network.
As with any good innovation, Sony’s proprietary technology started with a customer need ready to be solved: the Bayer Crop Science Division lacked an international IoT solution that could track seed products from start to finish throughout its distribution channel. Millions of dollars of revenue stood at stake, so Bayer turned to Sony to develop a smart label that would set the organisation up to manage its supply chain with end-to-end visibility.
Sony’s printable and disposable adhesive label allows companies to track the condition and location of their products worldwide and act upon the vast amounts of data it collects. The process is simple: the label activates when attached to the package, connects to AT&T’s secure LTE-M network, and sends data to the Smart Label Cloud in real time.
In sharp contrast to other smart label solutions that place trust in a patchwork combination of Wi-Fi, radio-frequency identification, and other limited coverage connections, the Sony Smart Label connects solely through a secure and universally-available cellular network. “Working with Sony,” says Robert Boyanovsky, the vice president of Mobility, IoT and 5G at AT&T, “we provide full visibility of every item shipped.”
Most importantly for companies on the edge, the Smart Label integrates with existing enterprise systems to achieve full visibility, thus adding value without disrupting supply chain process flow.
Why is this important now?
Companies that previously delayed introducing RFID and other automated track-and-trace technologies can capitalise on recent developments that lower costs, improve accuracy, and supercharge traceability.
Clearly the technology has value in today’s uncertain global marketplace, and can help decrease the costs of tracking goods. To quote Christof Backhaus, the Project Lead at Bayer, “the Smart Label indicates how much product is in the market, from the packaging line to the end customer.” Companies no longer have to spend a small fortune to take advantage of recent IoT developments. “Due to the technical composition [of the label],” Backhaus explains, “we don’t require additional infrastructure, manual scanning, or other expensive tools.”
Over the decades since RFID was first introduced, support for introducing it to company supply chains has also improved. AT&T’s IoT Professional Services Organisation, for example, supports companies through the end-to-end design and integration process--from installation to deployment and project management.
Companies that invest in traceable and visible supply chain solutions stand the best chance of survival, adjusting in real-time to natural disasters, shipping backups, and slowed-down supplier turnarounds as a result of the global pandemic. “Smart Label promises to help businesses like Bayer realise the full potential of the IoT,” says AT&T’s Boyanovsky. “[We can] deliver improvements in revenue and cost savings and make supply chains more efficient.”
Certainly, company executives will be hard-pressed to ignore recent innovations. In an age of uncertainty, RFID and its challengers herald a welcome sense of supply chain security. The next step? “Our sales team,” Boyanovsky adds, “is prepared to engage with prospective customers now.”