When running a successful business or organization, the bottom line is everything. That’s why classifying spend and keeping track of where the money goes after it leaves your organization’s wallet is paramount – but it’s not always easy. Even though it’s important, classifying spend in a complex procurement system is, at best, difficult to understand. However, with the help of machine learning it’s possible to gain an uninhibited view of your company’s finances. By collecting and analyzing expenses through machine learning, you can gain valuable insight into how to spend your capital more efficiently and make better business decisions for the future.
Here are some of the ways machine learning helps organizations manage spend.
- Machine learning can help streamline the procurement process.
- Machine learning can make accurate predictions that save time and money.
- Machine learning can reduce and/or eliminate wasteful spending practices.
So how exactly does machine learning help with all of this? Well, it all comes down to using the power of big data to uncover insights that would otherwise be impossible to obtain. Organizations can create massive amounts of data every day as they do business. By tapping into that data and utilizing it to your advantage, you can begin to uncover trends, patterns, and other information that can benefit your organization as it performs its daily business.
1. Streamlining the Procurement Process:
Think about the last time you tried to access and analyze data from across your enterprise—what was the process like? Most likely, it was time-consuming, complicated, and frustrating, including collecting data from various disparate sources and/or systems. Now imagine if you could collect all that data in one spot instead of having to sift through multiple systems and platforms to find what you need. Navigating organization-wide spend can be difficult and time-consuming, but it doesn’t have to be that way! Machine learning automates the data collection process and cohesively classifies and analyzes it—so that businesses can spend less time crunching numbers and more time focusing on their core competencies.
2. Accurate Predictions Save Time and Money:
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. Machine learning can benefit your spend management in many ways, but three of the most important are:
- Decision-making: Machine learning is the essence of data-based decisions. Machines can gather and analyze 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 machine learning are critical for organizations looking to make information-based decisions.
- Forecasting: Just as you need data to make decisions, you need data to make predictions and formulate strategies. Data forecasting happens when you find patterns within your information and make an educated, accurate assessment of the future. From reading intricate sets of spend data to identifying hidden trends between them, machine learning helps businesses create better future scenarios and more accurate forecasting of where money is being spent.
- Managing Risk: When combined, intelligent decision-making and accurate predictions allow your organization to manage risk. From anticipating shortages to detecting fraud, risk management is one of the most beneficial and coveted benefits of machine learning, helping you uncover potential financial hazards and prepare for them. In the end, you can select suppliers, negotiate prices, and make purchases with more confidence.
3. Reduce Excess Spending and Eliminate Wasteful Practices:
Because machine learning identifies patterns within your spend data, it is easy for it to pick up on wasteful spending behaviors, such as making unreasonable and unnecessary purchases or over purchasing. By recognizing what makes the most sense for your organization, machine learning will pinpoint these areas for improvement. The more data that is processed through machine learning modules, the greater the level of intelligence that is used to find these patterns. 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, giving you valuable insight into where the greatest savings can be found. And you can say with greater and greater certainty, “we don’t need this!”
Download Now:- Spend Management Handbook
Machine Learning is a Solution, Not Just a Buzzword. Find Spend Management Software That Works for You
Simfoni is focused on driving outcomes for procurement teams. Our solution helps you not only understand your spend data but empowers you to use it to your greatest benefit. Our composable, scalable approach to spend management technology is infused with machine learning capabilities that continue to adapt to your organization while it works for you, allowing you to focus on what matters most—delivering results.
Learn more about how our machine learning-enabled solution can give you actionable insight into your spend. Contact us today!