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Artificial intelligence


Artificial intelligence, better known as AI, is popping up everywhere as the panacea for everything. There appears to be no limit to where it can be used to make businesses work smarter to improve profitability. The International Data Corp. (IDC) Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide forecasts that cognitive and AI spending will grow to $52.2 billion in 2021.

In addition to autonomous vehicles, predictive maintenance and chatbots responding to customer inquiries, AI can have an immediate positive impact on the bottom line by helping companies select suppliers that provide goods and services at the lowest price, with the least amount of risk.

Here are some opportunities and challenges of using AI to increase procurement effectiveness.

Spend Analytics

Spend analytics can be armed with AI software to collect, cleanse, classify and analyze expenditure data to help procurement teams identify excessive costs. For example, AI systems can identify when duplicate suppliers were used to purchase the same goods, urgent purchases were made without using better terms in existing contracts, and when there were suboptimal payment terms.

But to find savings opportunities, AI software has to be good at classifying data. Statistical and pattern-based AI techniques can have weaknesses dealing with one-off purchases and infrequently used suppliers. They can also be stumped by new languages and geographies, which happens more and more often as supply chains become global. The best way to achieve ROI is to pilot a system where there is a large volume of transactions involving standard repeated purchases, so that there are more opportunities for increased efficiencies.

Strategic Supplier Sourcing

By using AI, procurement officers can be armed with knowledge about market conditions, upcoming mergers and acquisitions and real-time product and support comparisons. This ensures that there is a data-driven strategy for awarding suppliers, and that procurement is getting the best possible terms.

Using AI also reduces the time required to analyze all of the supporting data. Evaluating responses to a bid process can be reduced by as much as 80 percent. It can also be used, on a continuous basis, to provide recommendations of suppliers on demand. Responding to market opportunities in seconds versus weeks can speed up time-to-market by receiving the needed parts and materials quicker.

Guided buying is also an AI innovation that enables employees to quickly and easily buy goods and services from preferred suppliers with minimal support from procurement teams. Employees can use voice-activated commands to find the best price or a supplier that can deliver on time where there is an urgent request. Many of these systems enable direct communication with suppliers with embedded rules to ensure that the buying process is compliant with procurement policies.

Many automatic personal assistants also have the advantage of being able to learn from experience. But if the AI system is self-taught, there is the risk that it can be corrupted by outside influences, so communications and procedures need to be protected from hackers or rogue employees. For example, the famous chatbot, Microsoft’s Tay, was taught by trolls to use inappropriate language until it was taken off the market for further testing.

Contract Analytics

The majority of organizations do not have a database containing all of the data in their contracts–and they definitely do not have an easy way to extract all that information–so there’s no quick and efficient way to, for example, view and compare agreements. Using AI, companies can review contracts more rapidly, organize and find large amounts of contract data to significantly lower the possibility of contract disputes and increase the number of contracts that they can negotiate and execute.

For example, using AI, company contracts can be accessed based on renewal dates to inspect conditions and negotiate accordingly. Finance and procurement teams can inspect if pricing discounts are not being consistently applied across the organization in line with contract terms or keep track of the wording of specific clauses in different divisions. The beauty of AI contracting software is that it helps organizations maintain consistency in the terms and usage in all of their contracts, which makes it easier to identify instances of non-compliance, and make sure that less-than-ideal provisions are dealt with quickly.

The Challenge: Data and Application Integration

None of the benefits of AI can be realized without a strong data foundation. Firms need to invest in data management—as well as data and analytics—to have a 360-degree view of their business operations. Only if their CRM, ERP and financial systems are fully integrated can they have access to all the data that is required.

Point-to-point integrations can initially appear to be more cost effective when there are only a few systems connected together. But, in time, with more and more data shared with different departments, suppliers and partners, a third party integration platform can result in lower development and maintenance costs while providing the scalability and consistent data handling that’s needed.

Once companies have a strong data foundation with all of the necessary integrations and data sharing, new machine learning-based platforms can be used to enforce the best procurement practices. Although today AI procurement systems are not always accurate, machine learning uses algorithms to learn from data, allowing platforms to continuously improve themselves.

As we start to see spend analysis platforms classifying data at levels of 98 percent accuracy—the same level as human analysts—it is more and more likely that AI will become a trusted tool for the procurement process.

Tsipora Cohen is the global head of Marketing at Magic Software Enterprises, a global enterprise software company headquartered in Or Yehuda, Israel. Visit

generative AI market platform edge

ORITAMES APS Scheduler v2.5 Breaks Traditional Barriers

Thanks to increased efforts in autonomous Artificial Intelligence, the ORITAMES APS Scheduler v2.5 – created by Brussels-based company MangoGem S.A., is now capable of handling levels of resources and scenarios of equipment, people, and consumables.

“The ORITAMES APS Scheduler v2.5 uses AI-assisted autonomous machine learning to explore optimization scenarios better than traditional approaches, combining the best of machine computing power and human know-how to facilitate better planning and scheduling,” said Ben Rodriguez, Chief Technology Officer of MangoGem. With solver heuristics notoriously difficult to fine tune, the ORITAMES APS Scheduler v2.5 discovers which settings work best, checks validity and detects trends in data to improve ramp-up and adoption. It can also discover the most promising improvement scenarios and propose them as potential solutions to human planners. It combines several AI-assisted machine learning meta-heuristics including Genetic Algorithms (GA), Taboo Search (TS), Simulated Annealing (SA), Swarm Intelligence (SI) amongst others.”

Photo: MangoGem S.A.

By breaking the barriers of a traditional APS, ORITAMES APS v2.5 sets a new standard by taking on and solving complex and multi-layered cases typical for larger companies.

“The use of AI-assisted autonomous machine learning also eases the integration and reduces the cost of implementation of the ORITAMES APS Scheduler v2.5 within overall supply chain management (SCM) strategies by making modeling easier, improving data quality and decreasing dependency on human expertise,” he concluded.

This advanced software platform was specifically designed to cater to a variety of industries including discrete manufacturing, construction and infrastructure projects, logistics and transportation, equipment and property maintenance, engineering projects and service organizations.

“The AI-assisted disruptive technology delivered in ORITAMES APS Scheduler v2.5 is capable of solving many of the operational performance challenges of Industry 4.0,” concluded Ben Rodriguez, CTO of MangoGem. “It uses AI-assisted autonomous machine learning techniques with multiple solvers and heuristics and, depending on an analysis of the case at hand, will apply many methods to find the one that produces the best results.”

Enhanced Security Solutions Provided with Paramount Advanced Technology & Hexagon Partnership

Smart transportation, displacement monitoring, mining security and infrastructure monitoring are just a few of the improvements for enhanced African rural safety following the newest partnership between Paramount Advanced Technologies and Hexagon’s Geospatial and Safety & Infrastructure divisions. Paramount Advanced Technologies serves as a subsidiary of the African-based global defence and aerospace company Paramount Group. 

“Paramount Advanced Technologies’ cutting edge research and development (R&D) and systems integration expertise which has delivered solutions effectively across the African continent, coupled with the technological innovation and overarching support that Hexagon brings from decades of system deployments globally makes for an impactful partnership to the betterment of the continent’s infrastructure and security capabilities, an alliance which we are privileged to announce,” stated Paramount Advanced Technologies CEO Ralph Mills.

Additional benefits from the partnership include facilities and inventory management, public records management, command and control and tactical emergency services. Paramount’s Integrated and Smart Systems (ISS) provides an innovative approach to providing proactive solutions for rural safety initiatives with a foundation built on the strongest industry partnerships.

“We live in exciting times, where the era of the Fourth Industrial Revolution upon us is driven by disruptive technologies such as IoT, augmented reality, blockchain, drones and robotics, amongst others. Technological changes are rapid while the availability of unstructured data is prolific,” Mills added. “The challenge before us is to make sense of that data, leveraging real-time information and intelligence to solve real-world problems, ensuring that organizations are best aligned to harness the advantages of this era by being digitally enabled, so as to avoid the risk of being left behind.”