Today’s guest post is by Eric Steller Co-Founder | Managing Partner | CRO | Board Member | President

Artificial Intelligence (AI) has revolutionized many industries, from healthcare to finance, offering advanced analytics, automation, and decision-making capabilities. However, when it comes to eProcurement, the adoption of AI faces significant limitations. While AI can enhance certain aspects of procurement processes, it falls short of completely replacing existing eProcurement systems. This white paper explores the primary reasons why AI cannot fully substitute traditional eProcurement solutions.

1. Lack of Incentive for Transparency

In the eProcurement space, transparency is a double-edged sword. Suppliers, buyers, and intermediaries often operate with the intent to maximize their margins. Full transparency, as facilitated by AI, could potentially expose pricing strategies, margins, and other sensitive data that parties are not willing to disclose. This lack of incentive for transparency presents a major hurdle for AI adoption in eProcurement, as the parties involved are not motivated to show all their cards.

2. Complex Relationship Dynamics

eProcurement is not just about transactions; it involves complex relationships and negotiations between buyers and suppliers. These relationships are built on trust, history, and nuanced understanding, which AI systems cannot replicate. The subtle dynamics and the importance of human interaction in negotiating terms and managing supplier relationships are beyond the current capabilities of AI.

3. Data Privacy and Security Concerns

AI systems rely heavily on data to function effectively. In eProcurement, this data often includes sensitive information such as pricing, contracts, and proprietary supplier information. The use of AI raises significant data privacy and security concerns, as unauthorized access or breaches could lead to severe financial and reputational damage. Ensuring the security of AI systems and the data they handle is a critical challenge that limits their adoption in eProcurement.

4. Inability to Handle Unstructured Data

eProcurement processes involve a considerable amount of unstructured data, such as emails, documents, and verbal agreements. AI systems struggle with understanding and processing unstructured data in a meaningful way. While natural language processing (NLP) and other AI technologies are advancing, they are still not capable of fully comprehending the complexities and nuances of unstructured data that are integral to eProcurement.

5. Regulatory and Compliance Issues

The eProcurement sector is heavily regulated, with strict compliance requirements that vary by industry and region. AI systems must be meticulously designed to adhere to these regulations, which can be a daunting task. The dynamic nature of regulatory environments means that AI systems need constant updates and adjustments to remain compliant, posing a significant limitation on their widespread adoption in eProcurement.

Conclusion

While AI offers promising enhancements for certain aspects of eProcurement, it cannot fully replace existing systems due to the inherent complexities and challenges outlined above. When seeking an eProcurement provider, it is crucial to value experience over flashy user interfaces and advanced reporting features. The proof is in the pudding, and a provider with a long history of proven success is invaluable. This market vertical thrives on a hybrid approach that combines white-glove consulting, deep relationships, and a robust software infrastructure that supports a repeatable, predictable process.

To navigate the complexities of eProcurement, businesses should prioritize providers who understand the intricacies of the industry and have a demonstrated track record of delivering reliable, compliant, and effective solutions.

While this topic is a very important area of discussion and a broad topic in today’s procurement space, this white paper intends to provide much needed guidelines and dialogue points to consider as procurement professionals review the use of AI based solutions at their companies

References

1. Handfield, R. B., & Nichols, E. L. (2002). Supply Chain Redesign: Transforming Supply Chains into Integrated Value Systems. Financial Times Prentice Hall.
2. Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.
3. Trent, R. J. (2007). Strategic Supply Management: Creating the Next Source of Competitive Advantage. J. Ross Publishing.

.

Today’s post is from Ronald D. Southard, CEO of SafeSourcing Inc.

I’ve enjoyed my conversations with Mahdlo Executive Advisors, specifically Eric Steller who is the Principal at Mahdlo and Andrew Teitscheid who is a senior advisor and CRO. We’ve been exploring  the procurement space over the last several weeks to try and understand how Mahdlo’s advisors and customers can benefit from the use of Procurement Best Practices, specifically “Procurement as a Service” or PaaS.

Today’s Video:

This video explores why Artificial Intelligence whose use grows in procurement daily may not be the be all, end all in the procurement space just yet. Specifically, as it applies to “Procurement as a Service”. We also spend a little time discussing Blockchain and Quantum computing to add a little spice to the conversation about my favorite subject, all things procurement.

SafeSourcing is a global Procurement as a Service (PaaS) provider. This means that we can deliver our services using our own platform or competitive platforms that our customers may have already purchased but may not be achieving the benefits for which they had hoped. We accomplish this through our unique “Eight Step” detailed White Glove managed delivery program.

For more information on what the SafeSourcing team can offer you, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

Procurement as a Service

Today’s post is by Margaret Stewart, Director of Marketing, HR and Administration at SafeSourcing

Oftentimes today companies will seek ways to streamline operations and enhance efficiency. One area ripe for innovation is procurement—the process of sourcing and acquiring goods and services necessary for business operations. Enter Procurement as a Service (PaaS), a modern approach that offers organizations a flexible, efficient, and cost-effective solution to manage their procurement needs.

Procurement as a Service (PaaS) is a model where a procurement partner assists or manages a company’s procurement activities, which typically include strategic sourcing, supplier management, contract negotiation, procurement transactions, and spend analysis. By leveraging PaaS, businesses can access specialized expertise, advanced technology, and scalable resources without the need for significant internal investments.

One of the most compelling advantages of PaaS is cost reduction. By implementing procurement functions, companies can reduce overhead costs associated with maintaining an in-house procurement team. Additionally, PaaS providers leverage their extensive supplier networks and negotiating power to secure better pricing and terms, resulting in further savings.

PaaS providers bring specialized knowledge and experience to the table. They stay up-to-date with industry trends, regulatory changes, and best practices, ensuring that their clients benefit from the latest insights and strategies. This expertise can be particularly valuable for companies lacking procurement proficiency or those entering new markets.

Business needs fluctuate, and PaaS offers the flexibility to scale procurement activities up or down as required. Whether a company is expanding rapidly or facing a downturn, PaaS providers can adjust their services accordingly, ensuring that procurement operations remain aligned with the business’s current needs.

PaaS providers utilize advanced procurement technologies and tools, such as e-procurement platforms, spend analysis software, and supplier management systems. These technologies streamline procurement processes, reduce manual tasks, and improve overall efficiency. As a result, companies can focus on their core competencies while the PaaS provider handles procurement intricacies.

Procurement as a Service represents a transformative approach to managing procurement activities in today’s dynamic business environment. By leveraging the expertise, technology, and scalability offered by PaaS providers, companies can achieve significant cost savings, enhance efficiency, and mitigate risks. As the business landscape continues to evolve, embracing PaaS can provide a strategic advantage, enabling organizations to stay competitive and focused on their core objectives.

For more information on how the SafeSourcing Procurement as a Service can help your organization, or on our Risk-Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

The following video as promised yesterday focuses on how companies that may have invested in technologies of alternative sourcing providers like Ariba, Coupa, GEP and others regardless of SaaS or Enterprise implementations can still take advantage of SafeSourcing’s Procurement as a Service “White Glove” Managed Services unique “Eight Step” process in order to drive incremental results while continuing the use of your competitive solution providers tools. While the SafeSourcing process has eight major steps, there are as many as seventy (adjusts based on cumulative learning) individual touch points. The vast majority of these are handled by our SafeSourcing Customer Services Team of Procurement Knowledge Workers with input from your team procurement team where needed.

Detailed Video Response to yesterday’s introductory post relative to SafeSourcing’s Procurement as a Service “White Glove” Managed Services unique “Eight Step” process. Please Click here to view.

SafeSourcing is a Procurement as a Service Provider that delivers significant financial results utilizing our  SafeSourceIt™ procure to pay suite of applications in order to deliver guaranteed improvements to companies’ gross margin, expense, and net earnings.

Our services are delivered utilizing our unique eight step white glove delivery model that can also be delivered using competitive procurement solution providers tools in order to improve your teams’ results. Our  SafeSourceIt™ Global Supplier Database that includes over 557,000 vetted and experienced vendor/suppliers provides our customers with access to suppliers that are responsive and interested in competing for your business.

To learn more please contact a SafeSourcing Customer Services Representative

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

I recently completed a series of interviews with Mahdlo Executive Advisors Eric Stellar Co-founder and Principal and Andrew Teitscheid CRO regarding our service delivery model and how it might be deployed using competitive solutions providers tools like Ariba, Coupa, GEP and others in order to improve upon a company’s results annually.

The following video is the third session and serves as an introduction to a detailed discussion that will be published tomorrow as to how and why our eight-step white glove service approach can improve operating results for companies year after year regardless of the tools they use.

Please click on this link to view the video. Linked In Interview

Please enjoy and I certainly appreciate your comments.

SafeSourcing is a Procurement as a Service Provider that delivers significant financial results utilizing our  SafeSourceIt™ procure to pay suite of applications in order to deliver guaranteed improvements to companies’ gross margin, expense, and net earnings.

Our services are delivered utilizing our unique eight step white glove delivery model that can also be delivered using competitive procurement solution providers tools in order to improve your teams’ results. Our  SafeSourceIt™ Global Supplier Database that includes over 557,000 vetted and experienced vendor/suppliers provides our customers with access to suppliers that are responsive and interested in competing for your business.

Today’s post is from a collection of data and other tools that SafeSourcing’s CEO Ronald D. Southard uses regularly in the pursuit of fresh content.

1. Cost Savings: SafeSourcing can help businesses achieve cost savings through strategic sourcing and negotiation processes. By leveraging their expertise and technology, they will assist in obtaining better prices from suppliers than you can.
2. Efficiency in Procurement: SafeSourcing offers tools and platforms that streamline the procurement process, making it more efficient and reducing the time and resources required for sourcing all categories of goods and services.
3. Supplier Relationship Management: SafeSourcing might provide services to help businesses manage relationships with their suppliers effectively. This can include monitoring performance, addressing issues, and fostering collaborative partnerships.
4. Risk Mitigation: The company may have tools and processes in place to assess and mitigate risks associated with the procurement process. This could include evaluating supplier reliability, compliance, and other factors that may impact business operations.
5. Access to a Network of Suppliers: SafeSourcing could offer access to a wide network of pre-vetted suppliers in their SafeSourceIt™ Supplier Database. This can be particularly beneficial for businesses looking to expand their supplier base or enter into new markets.
6. Technology Integration: If SafeSourcing utilizes advanced technologies, businesses may benefit from the integration of these tools into their procurement processes. This could include e-sourcing platforms, analytics, and other technological solutions embedded in the SafeSourceIt™ family of solutions.
7. Compliance Support: SafeSourcing through regularly sourcing hundreds of categories may assist businesses in ensuring that their procurement practices comply with relevant or evolving regulations and industry standards. This can be crucial for avoiding legal issues and maintaining a positive corporate image.
8. Customized Solutions: The company may tailor its managed services to meet the specific needs of individual businesses. This personalized approach can be advantageous in addressing unique challenges and optimizing the procurement process.

To learn more please contact a SafeSourcing Customer Services Representative.