Transforming Procurement with AI

Keeping up with technology and innovation is no easy feat, yet it’s becoming increasingly essential for businesses striving to remain competitive. This evolution has a direct impact on procurement, a function that can even take the lead in driving change within a company. Artificial Intelligence (AI) plays a pivotal role here, particularly through hyperautomation. By reimagining how businesses operate, AI significantly boosts efficiency, sustainability, and value creation.

At NTT DATA, we understand that the challenges facing procurement departments in this transformation go beyond technology. They are operational, strategic, and analytical. With this in mind, we guide organizations ready to take the leap into the future. Here’s how we do it:

A comprehensive transformation model for procurement

Our approach at NTT DATA revitalizes procurement through six critical dimensions:

• Organization

A solid foundation is essential for an efficient procurement department. We assess policies, procedures, tools, and structures to set clear, realistic objectives that align with the company’s broader strategy.

• Processes

We identify bottlenecks, inefficiencies, and areas for improvement in current workflows. Then, we propose alternatives to automate and optimize tasks, creating a stable and efficient methodology.

• Technology

Choosing the right tools is key to enhancing the procurement model. Beyond digitalizing processes, we focus on tools that add tangible value to daily operations and decision-making.

• People

In an increasingly digital world, people remain the driving force behind tools and processes. Evaluating, training, and developing the skills of procurement teams is crucial for success.

• Management Control

This dimension ensures better decision-making by leveraging advanced analytics and AI-driven data models to provide critical insights.

• Results

We evaluate overall performance, internally and externally, to uncover improvement opportunities across all dimensions and establish a continuous improvement mindset.

A well-defined roadmap is critical in this transformation. Many companies make the mistake of prioritizing technology implementation without first optimizing their processes.

At NTT DATA, we follow a structured, five-step approach to ensure success: maturity analysis, defining the aspirational model, selecting the right tools, digitalizing and automating the aspirational model, and, last but not least, developing an effective change management strategy.

The role of hyperautomation in procurement

While AI helps optimize daily processes, its real power lies in hyperautomation—a combination of technologies designed to maximize operational performance. AI alone isn’t always enough; it works best in tandem with other solutions. For example, AI can process user needs via a chatbot, but the chatbot itself must first be created.

When applied to procurement, AI acts as an accelerator across various stages:

• Strategy: Projects purchasing trends, develops plans, and provides insights for better decision-making.
• Supplier Lifecycle: Simplifies supplier comparison, risk analysis, performance evaluation, and communication for more efficient management.
• Strategic Purchasing: Automates tenders, identifies risk clauses, and manages contracts end-to-end.
• Operational Purchasing: Streamlines order creation, inventory planning, routing, and order fulfillment.
• Invoicing: Automates invoice matching, guides suppliers through processes, extracts data, and detects potential fraud proactively.
• Data Analytics: Transforms vast amounts of data into actionable insights, enabling precise and strategic decision-making.

An example of this is our financial invoice validation solution. By using AI, we consolidate information from multiple systems, detect errors, and provide clear explanations of discrepancies. This reduces validation time by 80%, improves workflow quality, and frees procurement teams to focus on high-value activities.

Unlocking AI’s full potential in procurement

So, how do you harness AI’s full value for procurement? These steps ensure success:

1. Identify use cases: Choose strategic use cases that align with business needs and define the technologies to address them.
2. Set clear objectives: Establish specific, measurable goals, such as improving service quality, optimizing operation times, or automating repetitive tasks, to create tangible impact.
3. Assess technical and financial feasibility: Conduct thorough analyses to ensure proposed solutions are both practical and sustainable in the long run.
4. Implement solutions: Prioritize key use cases and integrate solutions seamlessly into existing processes.
5. Measure results: Use key performance indicators (KPIs) to evaluate outcomes, verify goals are being met, and uncover opportunities for continuous improvement.

This structured approach ensures a successful, sustainable transformation of the procurement function, maximizing its value to the organization.

By aligning technology, processes, and people, NTT DATA empowers procurement teams to lead the way in innovation and value creation. Are you ready to transform your procurement function?