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Can AI Mitigate Inherent Procurement Risks from the Supply Chain?

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Click to learn more about author Sonal Mehta.

Everyone involved in the supply chain knows procurement is an integral part of any business. But there is a hidden risk in the procurement process. It’s a risk that can cost your company money – sometimes a lot of money. Companies may experience various problems in the procurement process, ranging from delayed deliveries to non-delivery, to poor-quality products, to product substitution, to price fluctuations. There’s a dire need for procurement risk management, which aims to foresee potential problems and protect firms from them during the procurement process.

Let us see which procurement risks are weakening the entire supply chain and how the latest technologies like AI come into play to mitigate these procurement risks. 

Vague Vendor Selection Process

It’s no secret that procurement departments have very little control over the quality of the goods and services they purchase. This means multiple costs, time delays, and delivery failures. These can be difficult to quantify but can be devastating to your bottom line – affecting stock availability, quality, and efficiency. When you purchase products or services, you’re constantly worried about the quality of the vendor. Will they deliver on time? Is their quality good? Are they knowledgeable? A bad vendor selection will cost too much money, waste time, and deal with a bad reputation. Poor vendor selection can lead to vendor performance issues, project cost overruns, and delays.

When a company selects a vendor, they need a strategy to follow to ensure that the vendors are evaluated and selected correctly. The vendor selection process is time-consuming, resource-intensive, and complicated. 

AI’s risk-based vendor selection approach shortens the vendor selection process and provides clear, objective criteria to make vendor selection decisions.

Incorrect Analysis of Need

The majority of purchasing managers admit to not having a process in place for managing their procurement needs. Hence, they leave money on the table. Many organizations have found themselves the victims of purchasing mistakes. This often happens due to either overstatement or understatement of the need. The most common mistakes are mistakes in the purchasing decision, the process of procurement, and the purchase itself. When it comes to purchasing, the process is usually the same. A request for a product comes in from a customer. A request is then made to the vendor, the vendor replies, and further discussions follow until a contract is agreed upon. The key to making sure a purchasing decision is correct is to plan the purchasing process well. If you fail to measure the requirement, it results in incorrect forecasting and budgeting. 

AI can analyze the inventory levels and helps place the order of precise quantities. Its intelligent programs, using time series analysis and other tactics, can predict scenarios, identify optimal stock levels, recommend actions, and even act – independently or with human permission.

Poor Supply Chain Management

When it comes to supply chain management, risk is very much a top concern. The entire typical supply chain process can take up to six months, with hundreds of businesses left frustrated and confused, and lots of time and money wasted in the process. Companies often find themselves in situations where they have to postpone the implementation of a project because of poor supply chain management. It hurts procurement planning and process as a result. This leads to delays, increased procurement costs, and decreased customer satisfaction.

With AI-enabled supply chain management workflows, you can get a clear view of all your suppliers and organizations involved with your product’s supply chain, from key contract information to the latest news and updates. 

Tip: Try automating your vendor management systems with procurement automation software to nurture vendor relationships. 

Error-Prone And Paper-Based Systems

When you are using outdated, paper-based contract management systems, you enter into riskier contracts and are more likely to make mistakes and get stuck in delayed approvals. Handwritten copies are more likely to get tampered with. Paper copies are also likely to get lost when transferred from person to person for approval. Lack of backups, limited security, inconsistent formats, and no visibility of version history – all these limitations invite risks. 

AI-enabled contracts are designed for a purpose. With AI, you can seamlessly migrate to paperless processing. AI-enabled document management systems are designed to clean up the risk in your procurement process. It increases your capacity to manage your contracts, giving you a clearer view of your risks and allowing you to negotiate more effectively and efficiently.

No Control on Spending

Procurement plays a critical function in spending management. In many companies, controlling spending has been a major concern. Considering the volatility of today’s economy, it is next to impossible to gauge spending with routine analysis carried out by human resources.

Artificial intelligence can track and analyze transaction data for every purchase and assess usage patterns. There are many procurement software products available in the market that use this AI-based technology to intelligently analyze your spending patterns and help you gain control over them.

Risk-Averse Nature

Companies are getting more and more risk-averse. If you don’t manage your procurement risks, you’ll become a step-child in the eyes of your shareholders. You have a supplier that is critical to your business. If they went out of business or if they were to change their terms, it would be a grave problem. 

AI-powered procurement risk management software helps you make informed decisions and mitigate your procurement risks. It has a proven track record of helping companies like yours achieve this.

Over to You – Future-Proof Your Procurement Risk Management with AI

A problem in procurement can have many negative consequences, such as loss of profit, loss of time, and loss of reputation. What is left to do is to try and limit the damage from the problem. Using artificial intelligence, you can collect and analyze all the data you need from the beginning to the end of the contract process. AI has the expertise and can solve the most complex problems of procurement with machine learning and deep learning. It will ensure that the process runs smoothly and that the delivered products are of high quality and at a competitive price.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
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Source: https://www.dataversity.net/can-ai-mitigate-inherent-procurement-risks-from-the-supply-chain/

Artificial Intelligence

The Revenue-Driving Effects of IT on Business Strategy

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Business Strategy
Illustration: © IoT For All

Ongoing improvements to information technology (IT) have opened new opportunities for businesses to increase their revenue stream over the past few decades. These new areas of focus are altering business strategies, bringing IT to the forefront, and placing more responsibility on the role of the Chief Information Officer. 

The Changing Role of IT

Over the years, IT has changed from an expensive new fad that businesses were forced to experiment with to a powerful business driver. IT continues to evolve, helping to grow revenue and shape business strategy. As a part of that evolution, the role of the Chief Information Officer has also changed.

Today’s CIO has a seat at the decision-making table, helping to develop strategies, draft policies, and increase revenue. This is occurring through a shift from IT as a cost center toward a creator of value. This shift utilizes digital transformation, leveraging big data, the cloud, and other hallmarks of IT to create novel business models that drive revenue and meet long-term goals while ensuring quality operations. 

How IT Increases Revenue

IT is driving revenues for companies by providing tools to make the following innovative improvements:

  • Increased complex problem-solving: better hardware and smarter applications enable stronger information research and big data analysis, with resultant improvements to scalability planning.
  • Better decision-making abilities: Improved IT allows for solid market research through video conferencing, social media, online industry forums, and web-based surveys for consumer feedback. Powerful digital tools for analytics allows for data interpretation and stronger, more informed decision-making.
  • Improved marketing: Sales depend on reaching the right customer; predictive technology makes personalized marketing possible, and high-tech analytics provide feedback about the effectiveness of the marketing strategies, enabling real-time pricing shifts to maximize revenue.
  • Upgraded customer support: Complex and powerful customer relationship management systems help businesses support their customers through a variety of platforms, including emails, webinars, phone calls, and social media platforms.
  • Enhanced resource management: Cloud technology allows employees to access their enterprise-level software from any device in any location, improving productivity and, ultimately, the bottom line.

How IT Affects Corporate Strategy

Business strategies are shifting to maximize the revenue-driving power of IT. The revenue-generating CIO will consider the following strategic issues:

  • Capitalize on mobility: Cater to the continued mobile platform growth by increasing the value of mobile apps for customer service.
  • Embrace the Internet of Things (IoT): Employ data analytics to harness and utilize big data resulting from the IoT. 
  • Actively collaborate: A key collaboration between the CIO, with expertise in information infrastructure, and the Chief Marketing Officer (CMO), with access to a bank of customer data, should focus on transforming big data into growth and revenue opportunities.
  • Experiment with Artificial Intelligence (AI): AI use can reduce cost and increase productivity, and its efficiency is growing exponentially stronger. As a revenue-generator, AI’s power analytics can be harnessed to turn big data into understandable and usable business information.

As technology continues to improve, the role of IT and, by extension, the role of the CIO will continue to evolve and become even more critical to business success. Cost-saving and improved productivity is not enough to provide strategic advantage anymore. A company that can harness and leverage. IT’s revenue-generating possibilities will see improved bottom lines well into the future.

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PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
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Source: https://www.iotforall.com/the-revenue-driving-effects-of-it-on-business-strategy

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Artificial Intelligence

Business Leaders Can Defeat the Labor Uprising with AI

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AI Business
Illustration: © IoT For All

It’s hard to believe that businesses that were fortunate enough to survive the pandemic are now facing another calamity. The labor shortage or wage shortage (depending on where you stand) could cripple the economic recovery efforts of the US as we head towards potential runaway inflation. The latest Consumer Price Index (CPI) is at 5 percent with no end to rising prices.

America’s Work Ethic

Do others around the world see Americans as lazy, entitled teenagers pining for a better allowance? As of May 3, the World Health Organization states that the US was leading other countries in vaccination rates, while other countries like India continue to suffer. Talk to business leaders around the globe, and they’ll find it laughable that America is now “held hostage” by low-skilled, low-wage workers.

Frustrated business owners are left to wonder why those sidelined during the pandemic aren’t rushing back to work. We are experiencing something historic that goes beyond “lazy and entitled Americans.” Three factors are driving the labor shortage as census data comes out:

  • Declining birth rates – down 4 percent from 2019
  • Boomers, up to 40 percent leaving the workforce
  • Low labor force participation rate at 61.4%, according to a February report by the Bureau of Labor Statistics.

Covid did not cause the labor shortage; it did, however, accelerate it. There’s no simple one solution answer, such as raising the minimum wage to address these challenges.

It’s Not a Labor Shortage, It’s a Wage Shortage

Solve the labor shortage by raising the minimum wage to $15 per hour. Big corporations like Amazon, Costco, and Best Buy have taken steps to address this. However, most of America’s makeup is the small business owner who may not afford such a drastic increase in wages.

This philosophy (coming from heartfelt intentions) can hurt both the business and the worker. For example, a dishwasher making $10 per hour is now demanding $15 per hour. That’s a 50 percent increase. Being fair and equitable, that business owner will have to offer a 50 percent increase across the board. Now, the kitchen manager making $20 per hour will be asking for the same 50 percent increase at $30 per hour.

Other expenses for the business owner come with a significant wage increase, such as unemployment insurance, taxes, and worker’s comp. Businesses are now raising their prices triggering, massive inflation rates. As prices increase, many of these workers fighting for higher wages may not afford these products or services as the CPI continues to climb.

Bend, Don’t Break: AI-Driven Technologies to the Rescue

As a 50-year-old, I remember the Carter years – parents complaining about inflation and long gas lines. Back then, technological advancements weren’t available to help businesses. Artificial Intelligence, often defined as the ability for a computer to think and act like a human, has been democratized in recent years and can serve as a tool to help companies address acute labor shortages. 

The labor uprising goes beyond just retail and restaurants. While we see AI-driven digital menus like iOrder, the landscape industry innovates with Graze, the AI-driven lawnmower. Both platforms help address the lack of available workers and improve margins decimated by rising labor costs. In 2017, McKinsey released a study that indicated that by 2030, 30 percent of jobs could be automated with intelligent robots. 

Covid unearthed systematic and societal issues with low-skilled, low-wage workers that need to be addressed. In the meantime, businesses will need to look at ways to keep both labor and prices in check- after all, they are the job creators, and these workers on the sidelines will eventually have to pay their bills.

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Source: https://www.iotforall.com/business-leaders-can-defeat-the-labor-uprising-with-ai

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Artificial Intelligence

Innovations that Drive Smart Home Adoption

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Smart Home
Illustration: © IoT For All

The smart home space within IoT has been a bit of a strange sector for a long time. While it’s the most consumer-facing segment of the IoT industry, it hasn’t really moved very far beyond the early adopter phase into the general consumer market. Until now.

According to a recent report from Technavio, the smart home market is projected to grow by as much as $15.23 billion over the next five years, progressing at a CAGR of almost 18 percent over that time. This is undeniably good news for smart home device manufacturers and IoT ecosystem providers like Amazon, Google, Apple, etc. The expansion of the smart home, including beyond the walls of our homes and across our neighborhoods, will raise new challenges and present new opportunities for intelligent wireless connectivity providers.

Future of Smart Home Design

One of the most common obstacles to smart home adoption has always been the perception that it’s hard for consumers to set up and maintain. In the white paper “The Future of Smart Home Design,” ease of use is identified as a key driver of successful implementation. The paper states that an intelligent smart home can learn the occupants’ patterns and preferences through both observation and inference and as instructed by user rules and other inputs. Those, combined with the system’s observed data, enable smart homes to independently make decisions without additional human input if permitted to do so. A person should only have to oversee or potentially override the system’s decisions as exceptions. 

Edge Intelligence

One key enablement technology that eases the challenges for both connectivity and bandwidth is Edge Intelligence. In the same paper, it is suggested that artificial intelligence and machine learning capabilities can be brought into edge devices to accelerate and improve the complex functions, analytics, and protocols in a fully operational smart home. Making the challenge curve even steeper is the rapidly increasing number of devices being added to home networks as homes get more connected. Mainly, the increased latency between data collection and decision-making drives the demand for intelligence at the edge.

AI should be working in both the edge devices and in the hubs and gateways to enable smart home implementations best. These devices need greater local computing and storage resources than ever before to support advanced automation and analytics. An important aspect of component selection for smart devices is how many supporting vendors the silicon manufacturer has brought together. The more comprehensive the options, the more efficient a system can be.

Security

IoT security has long been an issue for smart home adoption, and now, privacy is also becoming a key concern for consumers. For the smart home – and the IoT as a whole – to scale, security issues must be addressed at both the OEM and the network levels. In addition, the market will need to educate consumers on how they are being protected from breaches in both areas. 

Security threats evolve, so smart devices must evolve as well. IoT device makers should prioritize the inclusion of hardware and software security features that prevent counterfeit devices from using public device IDs to pretend to be an authentic device, have unique device ECC-based public/private keypairs on-chip and through a certificate, and have preventative measures so bad actors cannot hijack code to gain remote control of devices.

Smarter Homes

These are just a few of the challenges that face the growing smart home market, but the opportunities embedded in overcoming these challenges are vast. Smarter homes mean more energy savings, a more secure home, less time spent on chores that are now automated, and an overall higher quality of life.

For a deep dive into the specific strategies and skills that can help you develop smarter, safer, and more efficient smart home products, make sure you register for the upcoming virtual conference Works With by Silicon Labs. Works With is ideal for software developers, hardware engineers, product managers, and IoT business leaders, offering technical, hands-on workshops and market development strategy sessions.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
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Source: https://www.iotforall.com/innovations-that-drive-smart-home-adoption

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Listen: How AI-enabled automation benefits the KYC process

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Banks are increasing their use of artificial intelligence-enabled automation, focusing on how to identify and verify customers for onboarding, and AI-powered solutions appear critical to gaining Generation Z customers, says Charley Ma, general manager of fintech at identity decisioning platform provider Alloy, in today’s episode of “The Buzz.” “Gen Z” refers to young people born […]

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Source: https://bankautomationnews.com/allposts/comp-reg/listen-how-ai-enabled-automation-benefits-the-kyc-process/

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