The document discusses the integration of artificial intelligence and machine learning in procurement to enhance processes through cognitive computing. It outlines various use cases across industries and presents a vision for improving decision-making, efficiency, and cost savings in procurement activities. Additionally, it highlights SAP Ariba's collaboration with IBM to develop cognitive applications for contract compliance and sourcing intelligence.

1. PUBLIC
Shivani Govil
Ani Chauhan
June 2017
Revolutionizing Procurement with
Artificial Intelligence and Machine
Learning

2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Overview
Procurement-Specific Use Cases
Deep Dive
Summary
Agenda

3. 3PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Global business in a changing world…
Digital Transformation
Two-thirds of Global 2000 CEOs have
digital transformation at the center of their
corporate strategy
Sources: IDC Study and MIT Sloan Executive Education
Disruptive Technologies
Constantly changing technology innovations
challenge business competitiveness

4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Vision: Cognitive Procurement
Make procurement processes more intelligent by
creating better connections between people,
processes, systems, data and context.
The result? Higher engagement, better decision
making and improved business outcomes –
resulting in greater savings and lower costs.

5. 5PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Cognitive computing involves self-learning systems that mimic the functioning of the human brain
through computer models and help improve human decision making.
What is cognitive computing?
Speech
recognition
Neural
networks
Artificial
intelligence
Machine learning/
deep learning
Natural language
processing
Image
recognition
Other….

6. 6PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Why is this becoming mainstream?
Better algorithms and technology
Investments
Reduction in cost and rise in Big Data
Changing user behaviors and expectationsParadigm shifts
Source: Chatbot magazine
By 2019,
40% of all digital
transformation initiatives
– and
100% of all IoT efforts –
will be supported by
cognitive/AI capabilities
(IDC)

7. 8PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Industries Use cases Companies
Consumer industries
 Product recommendations
 Customer service
Amazon, Macy’s
Travel
 Travel advisor
 Dynamic pricing
WayBlazer, Expedia, Hipmunk (now Concur)
Manufacturing
 Autonomous cars
 Predictive maintenance
Uber, Kaeser Kompressoren
Banking and financial services
 Personal financial advisor
 Fraud detection
ANZ Global Wealth, American Express
Healthcare
 Diagnosis in medical imaging
 Treatment recommendations
IBM Watson, Medecision
High tech and telco
 Malware detection
 Marketing personalization
Google, Facebook
Applications emerging across various industries

8. 9PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Procurement-specific use cases (illustrative set)
Invoice creation
and reconciliation
Identify and
procure right parts
and products
Productivity apps
(approvals, status,
notifications, …)
Contract
authoring
Category
management/
demand analysis
Customer
support 2.0
Sourcing and
RFP creation
Risk and
compliance
Demand signal/
inventory
optimization

9. 10PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Capital asset request example
Rig manager
Chad Noll
NLP/
NLG
X
SAP Ariba Supplier Risk AI
Weather.com AI CFO
Archie Rooney
NLP/
NLG ERP Data
SAP Ariba Catalog AI

10. 11PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
SAP Ariba and IBM join forces
…and showcase the future starting with
two centers for cognitive procurement
We are planning on building game-changing
cognitive applications in the source-to-settle space
Contract intelligence
Sourcing intelligence
© 2017 IBM and SAP SE or an SAP affiliate company. All rights reserved.

11. 12PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Contract
Compliance
Contract
Creation
Contract
Negotiation/Award
Contract Intelligence
Proposed
Contract
Authoring
Scans contract
& converts to
contract
sections &
clauses
Predetermines
clauses based
on commodity,
region/legal
regulatory needs
Automatically
recommends
critical clauses
based on
contracting
history
Analyzes
frequently
modified
clauses,
suggests library
additions
Suggests
missing
sections,
clauses,
subclauses
Recommends
the optimal team
members to
engage
Minimizes risk
exposure by
ongoing checks
of document
compliance
Automates the
link from
contract terms
and items to
Compliance,
simplifying
tracking
Assess terms
and pricing
against
benchmarks
Initial Release
Future Release
News-based
commodity
dashboard
Digital Assistant for Easy, Conversational Interface
Monitor News,
Twitter, Weather
for commodity-
relevant trends
& regulation
changes
Shows % match
to previous
contracts
(completeness
check)
Shows % match
to previous
contracts
(correctness
check)
Cognitive Value Add
Contract Life Cycle

12. 13PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Environmental Monitoring Sourcing
Execution
Sourcing Intelligence
Proposed
Sourcing Event
Initiation
Initial Release
Future Release
Digital Assistant for Easy, Conversational Interface
Cognitive Value Add
Sourcing Event Life Cycle
Monitor News,
Twitter, Weather
for commodity-
relevant trends
Uncover pricing
pressures and
demand trends
for selected
products
Recommend
sourcing event
initiation based
on trends
Recommend
RFX event type
based on
commodity type,
region and
history.
Assess results
against
benchmark
prices
Recommend
number of
suppliers to
engage based
on commodity,
history and for
optimal results
Recommend
duration of
sourcing event
for optimal
results
Populate
sourcing event
data using
unstructured
data
Guide selection
of sourcing
template based
on unstructured
data
News-based
commodity
dashboard

13. 14PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Demo (Contracts)

14. 15PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Digital Assistant With Slack

15. 20PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Making the system intelligent
+ +
Data Intelligence UX
Action
Smarter model
Part of the business process
Prescriptive and proactive
Finance – ERP
Rules – SAP Ariba solution
Weather – External
Catalog – SAP Ariba solution
Supplier – SAP Ariba solution
Invoices – SAP Ariba solution / ERP
Logistics – Transportation management
Comments – Unstructured data
News – Unstructured data
NLP
Artificial intelligence
Machine learning
Auto-complete
Smart recommendations
Conversational bot

16. 21PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Deeper engagement and adoption
 Increase end-user productivity (ease of use, less training required)
 Bring the application to users in their environment of choice
Better decision making
 Have access to richer and broader set of data
 Uncover and discover hidden insights
Improve business outcomes
 Automate repetitive tasks
 Improve approvals and accuracy
 Improve efficiency by delivering personalized and context-specific information
#MAKEPROCUREMENTAWESOME
Value proposition for procurement

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