It seems every time one opens a newspaper (or web browser), there’s a new story on how artificial intelligence (AI) is having a new impact on society. Well, I have news for you: You’re about to read another. Procurement and purchasing software is getting in the game. For the uninitiated, this type of software automates several tasks that make up the procure-to-pay cycle—the process for a business, which spans the identifying of a need for a good or service to the receipt and payment of the good or service.
Traditionally, this software simply made the purchasing process more efficient, but now, companies can expect to save money and increase cash flow. As machine learning and AI are further integrated into purchasing and procurement software, businesses will have a better grasp on the value of goods and avoid overspending.
Additionally, the software will make it easier to validate transactions and cut down on approval processes that prove clunky. The software can do this by comparing data from past purchases and looking at external forces. So, if you work at a law firm and need to purchase 100 crates of paper and make a deal with a paper provider, the software, using AI and data analytics, can effectively approve the deal, giving your manager one less thing to do and making everybody’s life easier.
This same technology is being used by consumers, though they may not know it. Mastercard recently announced it is rolling out AI across its global network. The smart technology, which Mastercard calls Decision Intelligence, uses a sophisticated algorithm to examine how a credit card account is used over time. Then, using all of the data that it has compiled, it detects normal and abnormal spending in real time.
Not only will the technology protect against fraud, but it will also significantly cut down on false declines, which Mastercard estimates are 13 times more valuable than instances of actual fraud.
While this use case may be different from procurement and purchasing software, the technology behind it is the same. Computers are able to draw on massive amounts of data in an instant to help us make more informed decisions. Let this be the last time your company overpays for pencils or coffee or whatever it is you need to buy.