‘Appy Procurement: Applying the AI-Powered Customization of B2C Apps to B2B Procurement Technology

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“There’s an app for that!” Well, of course there is. These days, there are apps for nearly everything in the B2C sphere. And B2B, including procurement technology, is gradually catching up. Solution providers are using artificial intelligence and other cutting-edge technologies to make procurement “smarter” and more relevant to users.

Last week, Pierre Mitchell, chief research officer at Spend Matters, and Paul Blake, senior manager of technology product marketing at GEP, held a webinar on this trend, appropriately titled “There’s an App for That: Procurement Gets Smarter.”

Mitchell kicked off the webinar with a rundown of major trends in the consumer world. You have companies like YouTube or Facebook, where the consumer doubles as the product. You have services like TurboTax, Amazon and OpenTable that aim to offer consumers a frictionless experience through a user-friendly interface. And you have a gradual evolution toward everything being sold as a service. If you need transportation, you can arrange a ride through Uber or Lyft. If you need an attorney, if you need a consultant, if you need someone to do your laundry, well, there are apps for those, too.

“That same kind of thing is coming to the B2B side,” Mitchell said. “What’s really making those systems more and more powerful and relevant is artificial intelligence. Tesla has all these cameras that are learning how to help you improve how you drive. The same thing is going to be happening with Uber. The machines out there are learning, and they’re learning from you.”

Most of us know by now that we’re being tracked whenever we’re online. If you go on a website, it will often encourage you to log in (to Facebook or LinkedIn, for example), if you aren’t logged in already. This is so that the website knows who you are. “It’s absolutely frightening to know how much they know about you, how much they’re tracking you,” Mitchell said.

But fortunately, that concept of AI-powered customization, when applied to B2B, can be highly useful. A “smart” procurement system would know what your business role is and tailor the system to you, depending on what it thinks you would like to do. And as you interact with the system, it continues to refine its predictions of what you are looking for. The system would essentially be guiding you down buying pathways.

“The idea of pathing people based on your idea of who they are and their role and what you want them to do is not necessarily a bad thing as long as it supports the outcome they want to get to,” Mitchell explained.

In fact, personalization based on factors like user role, history and geo-location was on the list of consumerized shopping capabilities that people wanted to bring over to e-procurement, according to a survey that Spend Matters did earlier this year.

B2B is complex, however. And there are a number of important corporate requirements needed for B2B electronic marketplaces. The two that procurement practitioners deemed most crucial were reporting and analytics capabilities and integration to strategic procurement applications like e-sourcing and supplier management.

As the webinar was conducted on Oct. 31, after all, Blake used a Halloween analogy, comparing the process of procurement professionals finding what they need to trick-or-treating.

“What I mean by that is in order to get the ideal result, the exact item or service you need — the good candy, if you like — you need to go from house to house, perhaps to every one in the neighborhood until you find the good stuff,” Blake said. “Some kids are smart and send their younger siblings to report back where the full-sized Snickers are. That’s what we’re looking for from our B2B software. It’s the idea of ‘don’t make me go hunting through catalogs, just point me to what I need.’”

Blake went on to explain that for procurement professionals, the source-to-pay process has been like a road, on which they make periodic stops to complete certain tasks, such as planning savings, sourcing or supplier relationship management.

GEP recently conducted a study of their user expectations, and they found that 60% of users considered themselves new to procurement. Facebook and Google are the most used applications for this new, younger generation of users. “[This means that] a huge percentage of the user base has no experience with complex business software,” Blake said. “They see the world through the lens of their smartphone apps.”

Consumer opinion certainly matters for something like Facebook, which is used largely for leisure. But does it matter for B2B applications? Blake argued that user opinion is directly linked to the success of a procurement program. User expectations will affect their opinion of whether a software is suitable, which is then correlated with adoption of the software.

“If your users are finding workarounds because they don’t like the software, the solution you’ve found is no solution at all,” Blake said. “The right user solution directly drives return-on-investment ... It keeps users engaged and enthusiastic.”

Ultimately, the benefit of AI and customization in B2B is the ability to give feedback a valuable purpose. “One of the common threads in this discussion… is this idea of feedback and learning,” Mitchell said. “As procurement professionals are trying to improve their leadership skills, probably one of the biggest skills [they need] is empathy. And empathy is getting feedback from others on where they are. All this machine learning and AI stuff is feedback.”

The full webinar recording is now available on demand. Check it out for yourself here!

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