Skip to content
Search AI Powered

Latest Stories

Forward Thinking

Gartner announces its top three procurement technology predictions for 2018 and beyond

Spend-analysis software, procurement-to-pay solutions, and the "tail spend" are set to face major changes in the next five years, a report from the analyst group says.

New technologies, such as artificial intelligence (AI), B2B marketplaces, and chatbots, are poised to radically change procurement and sourcing processes over the next five years, according to a recent report published by the analyst firm Gartner.

In "Predicts 2018: Procurement and Sourcing Technology Will Benefit From Advances in AI, Data Visualization and B2B Marketplaces," Gartner analysts Patrick M. Connaughton, Magnus Bergfors, Desere Edwards, and Kaitlynne N. Sommers project that by 2022:


  • Fifty percent of all legacy spend-analysis software will be retired, replaced by AI-powered, cloud-based solutions
  • Seventy-five percent of all B2B "tail spend" (or one-off, nonstrategic spend items) will be purchased in an online marketplace such as Amazon Business or Alibaba's 1688.com
  • All major procure-to-pay software suites will have embedded virtual assistants and chatbots to help guide buying and self-service requests.

These three predictions are further detailed below.

Future of spend analysis. According to Gartner, "legacy spend-analysis software has failed to deliver on its promise." Instead, the analysts contend, the current spend-analysis process is time-consuming and error-prone. As a result, procurement managers are not able to make quick decisions in the face of changing market conditions.

Gartner foresees a new breed of spend-analysis tools that will leapfrog traditional software and incorporate more advanced AI, better business intelligence tools, and the ability to process natural (human-generated) language. While some traditional providers will reinvent their solutions using AI to analyze unstructured data, Gartner believes that greater than 50 percent of them will fail to adapt and instead will become obsolete.

Future of tail-spend management. In the past, tail spend has been largely ignored by procurement departments because it was not worth the time and investment. Over the past two years, however, e-marketplaces such as Amazon Business and Alibaba's 1688.com have been growing rapidly because they offer businesses an easy, effective way to handle this type of purchase. These marketplaces currently focus on what would be considered indirect spend, such as maintenance, repair, and operations (MRO); information technology (IT); and office supplies. Gartner expects usage to increase even more as these sites develop vertical-specific marketplaces and improve interoperability with procure-to-pay (P2P) software solutions.

Gartner's analysts suggest that companies find out how much money individual employees are already spending with Amazon Business, Alibaba, or other online marketplaces. If the amount is more than 5 percent of total spend, they recommend that the company consider consolidating that spend under an enterprise account. The analyst group also recommends setting basic guidelines for employees on when they can use Amazon Business and Alibaba and consider adopting P2P software that has a high level of interoperability with these marketplaces.

Future of P2P software. The biggest change that Gartner expects to see in P2P software in the next five years is the introduction of virtual employee assistants (VEAs) and chatbots. According to Gartner, both VEAs and chatbots are computer programs that simulate a conversation with a human being. VEAs work on behalf of enterprises to support employee engagement with, for example, the procurement process. Chatbots have a narrower functionality and are often highly specialized.

These artificial intelligence features will help guide end users through the buying process. A VEA will use a series of simple questions to help determine the best buying channel and payment method for the employee. Initially these interactions will be via text-based communications, but Gartner predicts that voice responses will be enabled in the near future. Chatbots will be used to handle common supplier requests, such as answering questions about the status of a payment or helping to resolve invoice discrepancies.

Gartner recommends that companies identify pain points where chatbots can be added to create immediate value, and then work with their current P2P software vendor to identify potential pilot opportunities.

Recent

More Stories

Report: U.S. companies are fast to adopt digital supply chains

Report: U.S. companies are fast to adopt digital supply chains

More enterprises in the U.S. are now implementing digital supply chains as competitive differentiators, according to a report from the technology research and advisory firm Information Services Group (ISG).

Organizations are working to make their supply chains more resilient to disruptions and responsive to abrupt market changes, the firm said in its “2024 ISG Provider Lens Supply Chain Services” report for the U.S. In the wake of major geopolitical events that have affected supply chains, including international conflicts and the COVID-19 pandemic, companies are seeking to prevent or quickly bounce back from supply or demand shocks.

Keep ReadingShow less

Featured

DHL online shopper report

DHL report shows seven factors about American online shoppers

Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.

First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).

Keep ReadingShow less
storm track forecast map hurricane rafael

Louisiana and Texas watch Hurricane Rafael approach

Gulf Coast businesses in Louisiana and Texas are keeping a watchful eye on the latest storm to emerge from the Gulf Of Mexico this week, as Hurricane Rafael nears Cuba.

The island nation today is bracing for storm surge, high winds, and destructive waves, according to the National Hurricane Center (NHC) at the National Oceanic and Atmospheric Administration (NOAA).

Keep ReadingShow less
white house

Business groups push back on Trump tariff plan

In the face of campaign pledges by Donald Trump to boost tariffs on imports, many U.S. business interests are pushing back on that policy plan following Trump’s election yesterday as president-elect.

U.S. firms are already rushing to import goods before the promised tariff increases take effect, to avoid potential cost increases. That’s because tariffs are paid by the domestic companies that order the goods, not by the foreign nation that makes them.

Keep ReadingShow less
clorox brands

Clorox partnership helps suppliers meet carbon reduction targets

Consumer packaged goods (CPG) provider The Clorox Co. has partnered with Manufacture 2030 (M2030) to help Clorox's suppliers meet their carbon reduction targets and advance the company's long-term goal of reaching net-zero emissions by 2050.

In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.

Keep ReadingShow less