Data quality and system maturity hold up the adoption of AI

CPOData & TechnologyInformation SystemsProcurement Executive+-

Artificial intelligence (AI) has long been touted as the next big thing in procurement. The solution to many of the function’s troubles. It is said that its implementation will take eliminate a lot of the procurement professionals’ day-to-day administrative tasks, such as raising POs and checking contracts, while also speeding up decision-making and adding a new level of intelligence to those decisions.


Although the promise has been there, the uptake has been slow. Some third-party technology providers have introduced AI into their solutions, while a few functions have also experimented with the technology in their own operations. However, the wider adoption of AI has yet to take place.


Why is that? It’s a question I put to Alex Saric, chief marketing officer at Ivalua, the global spend management technology services provider, at the company’s recent conference in London.


He said there were two fundamental reasons why.


First, he said, AI applications have yet to mature to a point at which functions could use the technology to its full potential.


Second, Saric added, the data functions that input into the technology is not yet of a good enough quality.


“AI is only as good as the data that it feeds on. If the data that goes into the system is poor then the output will be poor, too.”


Saric said many functions currently capture data from myriad systems, many of which produce different data sets. Even where they do produce similar data, in many instances, those systems can’t or don’t talk to one another. This means it is difficult for an AI system to obtain any meaningful intelligence from the information.


As such, AI will only come of age when these two issues are solved.


Many system providers recognise this and are working on solutions. Ivalua, for one, its own streamlined solution will provide the tool many procurement professionals have been looking for.


While it will be some time before AI adoption is widespread, the faster success stories become known, the easier it will be for procurement chiefs to make the business case for the technology. Then the trickle of early adopters will turn into a steady stream.


Download Procurement Leaders’ white paper, Turning data into action: Three ways to improve your usage of data, to gain insights into delivering a data-driven strategy.


This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Tim Burt
Posted by Tim Burt

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