Here are this week’s insights from Shaz Khan on how technological advances are influencing procurement software today. Read on for more about the changes in purchasing and procurement solutions for consumers and businesses from today’s newest technology.
How do technological advances, such as AI and blockchain, influence procurement?
As far as technological advances go, there’s really the big four.
- Big Data
AI/ Machine Learning
These are the four major buckets of innovation that companies are really banking on. And with AI, you can pull machine learning in with that. One of the big successes there is with learning about personal preferences. When you shop online, the company can already guess your personalized preferences and guide your shopping experience. The businesses can promote those correlating products that you might want to buy in addition to today.
Automation & OCR
We are already seeing a lot more automation of documents. So when you actually see the documents come through in your supply chain, let’s take invoices for example- you are seeing companies who have commoditized the digital extraction of those documents with a “textractor” service.
Being able to do digital optical character recognition at a fraction of the cost, what was typically thousands of dollars to implement, you can now do for pennies on the dollar.
That is a company that has built-in technology to scale with very competitive pricing, so now all of these companies that have already invested thousands or millions are asking, ‘what have I done with this massive investment?’ The new pricing has totally come in to disrupt everything.
You see a lot of this disruption rearing its ugly head in consumer retail. Most big box stores are suffering right now from a couple things. One is that they are not evolving in terms of their differentiation model. The idea of differentiation can really be anything from amazing customer service to offering things that you wouldn’t normally get in that commerce channel.
So you are seeing companies that have completely disrupted consumer retail and commercial real estate. What happens with these big box stores? These mega 100,000 square foot warehouses basically become wastelands.
So what are companies like Walmart doing? Walmart is saying – look we need to maximize every square foot and make these areas profitable. So what they have done is brought in healthcare services. Nobody expected Walmart to be a hospital, but Walmart is providing healthcare services now. This is how they can reach the consumer when they are already in buying other things, and hopefully, making it a more pleasant experience than actually having to go in to a doctor’s office.
So with this evolution of consumer purchasing, you have to look at how can consumer retailers compete with mega online retailers.