Will AI erode S2P's rigid inter-module barriers?
Spend Matters
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Last week, I attended a few product demonstrations that made me think about how AI will impact the future of S2P modules. While the current landscape includes some overlap between S2P modules due to integrations, advances in AI may allow for more blurring between the boundaries of individual modules.
Specifically, demonstrations with Globality (sourcing), ContractSafe (CLM) and Zip (intake/orchestration) — three vendors that may appear unrelated — were interesting to compare in succession. Each provider uses AI in different ways to address everyday procurement tasks, but how they employed AI can arguably apply elsewhere.
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Globality uses AI to automate sourcing activities by providing recommendations based on feedback from both the user and other users (a community intelligence approach). While useful for sourcing, this technology can also benefit other S2P processes, such as non-sourcing intake and P2P.
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ContractSafe uses OCR-based metadata extraction of uploaded documents. While this is just one feature of a broader CLM offering, some organizations that do not require the most advanced capabilities across modules may be interested in an “metadata extraction specialist” vendor that uses OCR or other technology across S2P modules for more accurate and centralized data tracking, as it is also important in S2P modules to varying degrees.
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One of Zip’s AI use cases relates to the assembly of workflows based on information users submit. Workflows, by nature, extend across S2P, but as Zip is already an example of a vendor that is challenging the traditional S2P paradigm, it is also worth noting whether others (especially non-intake/orchestration specialists) follow suit by focusing on AI for organizational permissions, routing requests to appropriate users, etc.
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There are a lot of AI-based trends. But as different procurement tech vendors generate new AI use cases or specialize in one area, I can’t help but wonder if one of the main hallmarks of this period will be that the S2P modules themselves become less rigid as AI advances allow vendors to simultaneously develop several (previously disconnected) modules.
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—?Nikhil Gaur, Research Analyst and Project Associate