AI Types in Procurement: ML, NPL & RPA

Learn more about ML, NPL, RPA, amp; AI

In the modern world, the term AI is no unknown. However, Artificial Intelligence is much broader than what we know of it. For starters, there are 4 main types of AI among other subsets. As you read through, we elaborately explain these types with accordance to its procurement application.

If you are new to procurement or are looking to elevate the efficiency of your current procurement process, here are the four key AI types you must understand.

·????? Artificial Intelligence (AI)

·????? Machine Learning (ML)

·????? Natural Language Processing (NPL)

·????? Robotic Process Automation (RPA)

Artificial Intelligence (AI)

AI or Artificial Intelligence is a broad term used to define a software or algorithm that has been termed as ‘Smart.’ A software that can deliver automation and smart inputs based on existing data is referred to as AI on a broader spectrum.

Machine Learning (ML)

Taking it one step further into the realm of Artificial Intelligence is the technology of Machine Learning. ML is a composition of complex algorithms that have been designed to recognize and analyse patterns from past actions to deliver insightful data to aid the ongoing process of strategic decision making.

Natural Language Processing (NPL)

As you delve deeper into the world of AI, you come across what’s known as Natural Language Processing or NPL. The NPL interface is built using a nexus of algorithms that interpret, analyse and generate responses based on human language processing.

This AI technology is capable of interpreting textual data or verbal context to extract valuable information that can be utilized for effective decision making.

Robotic Process Automation (RPA)

Lastly, we look at RPA or Robotic Process Automation, a lesser accepted form of AI. RPA is a software that instructs robots to perform operations that would otherwise be conducted by humans. This technology is utilized in industries where human repetitive processes can be made more efficient using automation.

While most experts deny its recognition as AI, the overall umbrella term of Artificial Intelligence does encompass automated functions.

How Each Type of AI Plays Its Role in Procurement

Now that you have a clear understanding of the various types of AI, let’s take you further into the role and functions of these AI types in procurement.

·????? Deep Machine Learning

·????? Natural Language Processing

Deep Machine Learning

Deep Learning or Deep Machine Learning is a sub-set of Machine Learning and is the latest and greatest form of Artificial Intelligence, taking industries across the board by storm. It’s incredible learning capabilities have proven effective and hence is the most recommended form of AI integration to your business.

When it comes to procurement, the application of DML is extensive. Some of the most essential processes that are benefited by embedding DML technology are spend analysis, supplier performance metrics, and market analysis.

DML systems are integrated to not only analyse internal operations but to derive information from external data sources as well. This technology is not confined to the above operations only and can have multiple use cases. ?

Natural Language Processing

Natural Language Processing showcases capabilities far more advanced than the likes of Siri and Google Assistance. While the technology is quite similar, the algorithms are more complex and intelligent, identifying key patterns in human textual or verbal information.

As discussed, NLP identifies, interprets and transforms human language to valuable information. It’s vast abilities also make it capable of identifying integral terms and components from contracts to deliver more efficient and effective contract analysis.

NLP is also integrated into chatbots for procurement professionals to derive immediate and precise responses based on vast data analysis.

Key Highlights of AI Types in Procurement

From all that we have discussed above, you now have an in-depth understanding of the various types of AI and the functions that they deliver in procurement. Perhaps, to give you a quick gist, here are some highlights from what we have discussed:

·????? Artificial Intelligence is an umbrella term that has several subsets.

·????? Machine Learning, Natural Language Processing and Robotic Process Automation are the 3 main subsets of AI.

·????? Machine Learning aids in processes like spend analysis and classification, supplier performance and market analysis.

·????? Natural Language Processing technology analysis human language and interprets information based on such colossal data.

·????? The overall efficiency in procurement processes is improved with the integration of AI and its subsets.

·????? Robotic Process Automation is an automated technology that improves the workflow of operations under procurement, perhaps not classified as traditional AI by some experts.

What is essential to note is that the AI technologies mentioned above are not confined to specific processes. As technology continues to evolve the advancement of AI is inevitable. Hence, more such process under procurement will be automated for improved efficiency and effectiveness using AI.

Should You Integrate AI in Procurement?

With the 80/20 AI rule in hand, embedding AI into your current procurement process would be a strategic decision. Procurement experts always strive to achieve optimal utilization of their resources to effectively utilize time and eliminate redundancy.

Based on your understanding of what we have discussed above, you can choose the degree to which you would like to automate and refine your procurement processes using AI. Furthermore, it is essential for procurement professionals to monitor the responses and functions performed by AI to ensure consistency in quality of output and rectifications of error when required.

If you have any questions or inputs you would like to share, feel free to drop a comment.? ?