In honor of the holiday season, we’re keeping Intelligent Procurement festive with a look at AI’s potential to impact on the annual tradition of corporate gift-giving. Just because these gifts aren’t your typical indirect spend items doesn’t mean that they need to be handled outside of a good, structured process. Maverick spend – even during the holidays – is not approved by Santa. Not to worry: SAP Ariba’s here to keep you cheerfully compliant.
First off, let’s take a look at what to buy. Corporate gifts is a broad spend category, from branded pens and golf balls to apparel and mobile device chargers. Custom merchandise typically incurs a set up fee for a vendor to prepare your logo for application to each type of item. Let’s use AI to narrow in on vendors and products that are already set up. You’ll still have a hefty list of potential gifts, so let’s go a step further. Let’s combine data on past gift purchases with details from our CRM system that shows which customers have renewed their subscriptions or executed sizable purchases. It may be a bit of a stretch, but an intelligent system might just notice some correlations between gifts sent and subsequent commercial activity. With these insights in mind, we can make a final selection that keeps costs down while maximizing the gift’s impact. Not too bad.
With our list compiled, let’s turn to which supplier to use. We’ve got a lot of good options that should be cost-competitive, at least on the line item level. Let’s leverage AI to help us model out total landed costs by incorporating volume-based discounts from our existing contracts with estimates for shipping. On top of that, let’s bring in supplier performance data to estimate the likelihood of on-time deliveries and the potential for transit disruptions. Now our choice is easy: we’ve got a short list of gifts with great per-item costs, optimized shipping, that we’re confident will arrive on time. What would have been a monster of a task in the manual world is done with a few clicks thanks to a bit of AI.
Hopefully this simple illustration of how AI can help improve Procurement processes gives you something to think about as we head into the New Year. If you can see the value not just in this scenario, but when these technologies are applied across all spend categories, perhaps you’ll have a new resolution at the top of your list as 2018 planning continues.
And we haven’t even talked about using IoT to verify physical delivery and Blockchain to keep everyone on the same page when it comes to fulfilling orders and executing payment! We’ll have to leave that for later.