How machine learning gives organizations a new (and better) perspective of spend management
When it comes to running a successful business or organization, the bottom line is everything. That’s why keeping track of where the money goes after it leaves your organization’s wallet is paramount – but not always easy. With the help of artificial intelligence and machine learning, large businesses and companies can gain a better, uninhibited view of their financial profiles. Together, machine learning and spend data create a powerful blend of intelligent decision-making and, even more importantly, strategic foresight.
First, let’s take a look at the spend management challenges facing your company.
It’s a pretty simple concept: In order to make money, businesses have to spend it. Whether you’re procuring raw materials to create a product or buying more copy paper for the office printer, every financial decision your organization makes is aimed at one goal: raising the bottom line. Without the right tools, spend management isn’t an exact science – even if it seems like it should be.
Think about the last time you took a business trip. Between plane tickets, accommodations, Uber fare, meals, and other minute expenses along the way, swapping out receipts for reimbursement was probably a hassle at best. In fact, most people probably wouldn’t bother turning in a $12 receipt for a meal at the airport because it’s simply too tedious. At what point is the cumbersome process of saving receipts and reporting costs worth it, then?
“Navigating organization-wide spending runs the risk of inaccuracy”
The same problem applies to procurement and spend management: Navigating organization-wide spending runs the risk of inaccuracy unless you’ve got the right tools to ensure crystal-clear visibility. That’s where machine learning comes in.
Machine learning helps you use data, not just understand it.
There’s a difference between gathering data, displaying it, and using it. With the right technology, you can obtain massive amounts of data and analyze it. But analytics aren’t solutions, which is why machine learning is such an integral part of procurement spend management. As you continue to gather and understand data, machine learning stores it and adapts to your organization’s goals, so you can effectively manage every facet of your spending profile:
- Purchase History
- Supplier Performance
- Contract Terms
- Promotions / Discounts
- And More
Machine learning isn’t just a buzzword; it’s a solution.
Machine learning can benefit your spend management in many ways, but three of the most important are:
- Managing risks and pitfalls
Decision-making needs data, and nothing is better at gathering data than computers. In fact, artificial intelligence and machine learning are the epitome of data-based decisions. What’s more, machines like these are capable of gathering and analyzing more sets of data than any person could on their own. This is especially true for strategies that require information from a diverse collection of data sets. Because of this, solutions powered by AI are critical for organizations looking to make information-based decisions.
Just as your organization needs data to make decisions, it needs data to create strategies and make predictions, too. Data forecasting happens when you take information, find patterns within it, and make an educated – and most likely accurate – assessment of the future. From reading intricate sets of data to identifying hidden trends between them, machines have an unparalleled ability to read and interpret big data, giving users an unparalleled ability to use data.
When combined, intelligent decision-making and accurate predictions allow your organization to do something else: manage risks. From anticipating shortages to detecting fraud, risk management is one of the most beneficial and coveted benefits of machine learning. In regards to spend management, machine learning can help you uncover potential financial hazards and prepare for them. In the end, you can select suppliers, negotiate prices, and make purchases with more confidence.
Spend classification isn’t easy, but machine learning can change that.
Spend classification can make all the difference in your spend management strategy. On the one hand, accurate classification can lead to clean, concise financial planning. On the other, poorly categorized spending can push numbers the wrong direction and influence your strategy negatively. Even though it’s important, classifying spend in a complex procurement system is, at best, difficult to understand – but not for machine learning.
By combining data from both sides of the transaction (outgoing and incoming), machine learning can crunch the numbers for any transaction, sort them, and categorize expenditures accurately. Over time, you’ll have a sophisticated network of spend categories, subcategories, and the relationships between them at your disposal. Using this information, you gain a better understanding of your products, their performance, and your larger business objectives.
Find spend management and procurement software that works.
Xeeva’s focus is on creating results-driven solutions in the procurement space. Our technology can help you not only understand your organization’s spending profile but let you use it to make accurate predictions and informed decisions. Using our human-powered artificial intelligence, our technology starts out intelligent but continues to learn and adapt to your organization while it works for you. As your organization continues to expand, the software learns and develops with it so you can focus on what matters most: delivering results.
Want AI and machine learning to work for you? Contact us today!