FinTech remains merely on the cusp of disruption from artificial intelligence (AI), with some players in the B2B space beginning to look at AI-based chatbots and data analytics solutions to take digital financial management to the next level.
Increasingly, procurement is a popular target for AI-deploying FinTechs. SAP Ariba, Transcepta and Tradeshift are just a few of the companies that recently rolled out some type of eProcurement tool using artificial intelligence, but the industry is only scratching the surface of the potential of AI, machine learning and other intelligent technologies.
Another firm working to take a closer look at how artificial intelligence can impact the eProcurement function even further is Xeeva. The company recently acquired AI patents for its procurement software solution relating to data management and cataloguing. But, as CEO Dilip Dubey recently explained to PYMNTS, Xeeva’s eye on AI goes further than using the technology to simply address a few key pain points in the procurement process that humans cannot address.
“Human beings are either not able to do certain things because of the complexity, in terms of going deeper at a transaction level, or because it’s cost prohibitive,” Dubey said of certain tasks that AI-based technologies can perform. “AI is going to allow procurement to drive savings and value in these areas, which is a very exciting part of AI. We also see AI making the procurement function more efficient — hyper-efficient. It won’t just be marginally better.”
Xeeva’s new patents address a few points of eProcurement that the company says can benefit from AI.
One of those patents is for the company’s existing Virtual Data Manager tool, which takes “imperfect,” unstructured data and allows a company to categorize that for spend management and analysis.
“The challenge in spend visibility and spend management is that data sets are so poor,” said Dubey. “Data sources are so distributed. To truly understand at the granular level what’s happening is very difficult here.”
While there are solutions that can help improve the quality of procurement spend data, the executive said they often take a long time to deploy and produce valuable results for the enterprise.
“Or,” he continued, “they only handle part of the problem, 70 percent of the spend, and they leave the rest as ‘undefined.’”
Artificial intelligence can not only take that granular data and categorize it; even if it’s imperfect, it can also do so in real time.
“When you’re able to do that, you directly impact decision-making and how businesses are run,” said Dubey.
Of course, there are loads of points in the eProcurement process that could see disruption from AI, including strategic sourcing and cataloguing, which Xeeva’s other patent, for its Virtual Catalog Manager solution, addresses. But there are common themes in these use cases, especially when it comes to data analytics.
Dubey explained that, because of the vast potential for AI and similar technologies in procurement, professionals should take a broader view of its potential. The procurement space continues to struggle with paper-based and manual processes, from paper purchase orders and invoices to manual data entry of payments information. And while digitization of processes and payments can certainly help businesses gain better digital data with which to work, Dubey noted that AI means firms don’t have to make that transition.
“This is not a linear process where you have to first move away from manual and into having digital data, and only then can you apply AI technology,” he said. “What I believe is that there is no need to do the conversion. AI allows you to capture data from other sources without having to go through that manual-to-digital process.”
That, he continued, is where the true potential exists in artificial intelligence.
“Once you break those barriers, you can get to the ‘other side’ in a very creative way with artificial intelligence,” said Dubey.
Related technologies like machine learning and blockchain, the executive noted, are also positioned to shake up the entire procure-to-pay process, not just a few touchpoints. Key to this disruption, too, is what Xeeva describes as “imbedded intelligence” and the combination of artificial and human intelligence, going beyond the straightforward deployment of some type of AI tool.
“You can always hire a few people who understand AI, buy open source technology and make progress there,” the executive said. “But there is real value that comes if you can absorb human knowledge and make it work with AI. That’s what creates massive savings and driver hyper-efficiency.”
“As AI is becoming more popular in procurement, we believe we are coming onto the next generation of combining AI with human intelligence,” he added.