How Do 'IA' Acronyms Fit into Procurement and Supply Chain?

Making Sense of the Alphabet Soup

RPA, AI, ML, BPA, CC, NLP ….. these days, Intelligent Automation is an alphabet soup of acronyms and jargon. Too often, we see articles and posts which seem to use various of these interchangeably, and without distinction. Yet, these are very different components of Intelligent Automation, which is an umbrella under which all of these others can fit. (To make things more confusing, the abbreviation for Intelligent Automation, “IA”, is often confused with “AI”, or Artificial Intelligence!)

So if IA is the overarching concept, what are its components and how do they fit together to create a solution for Procurement and Supply Chain?

Here are high level definitions of some of the key acronyms and buzz words that are popping up in Intelligent Automation, and examples of how they fit with IA in a Procurement context:

AI

Artificial Intelligence is basically a tool, or a set of automation tools, that augments human cognitive processes to make decisions, either autonomously or semi-autonomously. It is not full automation software, but it is comprised of elements of automation software. A goal of AI is often to try to potentially solve problems better than a human could, rather than just mimicking humans, as Cognitive Computing (CC) does. An example for Procurement could be the analysis of historical spend data and then mapping this to current spending trends to assist with category management planning.

CC

Cognitive Computing involves mimicking human reasoning and behavior patterns to try and solve complex problems. A Procurement example might be automation and streamlining the contract review and compliance process.

BPA

Business Process Automation is the automation, often end-to-end, of an entire business process, or of complex workflow segments within processes. It typically is strategic as opposed to the more tactical, task-oriented focus of RPA. PurchaseControl™ has a great analogy to explain the difference: “If RPA is the crew on a busy ship, BPA is the captain, charting a course that ensures the ship not only makes it to its destination, but also does so with optimal performance, safety, and cost effectiveness.” A Procurement related example is the end-to-end transformation of source-to-pay (S2P) processing.

RPA

Robotic Process Automation refers to software, or a “robot”, that is programmed to do specific tasks or process steps, just as a human may do them today. The robot follows a strictly defined set of steps for all activities that it processes. Tasks suitable for RPA usually are discrete, functional steps, that are predictable and repeatable, with little to no variability or outliers. An example for Procurement/Supply Chain is the automation of upstream goods receipt for more efficient receipting and matching processes.

ML

Machine Learning is the use of computer programs and software to access and analyze data, and automatically “learn” based on this analysis, without being specifically reprogrammed by humans. As “big data” continues to grow, these vast amounts of data can be analyzed using computer algorithms and adaptive models based on that data analysis. A relevant example for Procurement is the use of analytics to connect buyers with suppliers in real time, or to suggest suppliers for specific order requirements.

NLP

Natural Language Processing is the automated and computerized analysis of speech and text, the programming of computer software to analyze these “natural languages” and then make decisions or take actions based on “understanding” those language inputs. Examples for Procurement may include the use of chatbots or virtual assistants to review contract or proposal documents for specifically defined parameters and produce specific outcomes based on this review.

How do these relate to Intelligent Automation?

All of these acronyms are components and part of an IA transformation program. They are integral ingredients in the recipe to deliver successful Intelligent Automation projects and to drive lasting business transformation. It’s not uncommon to hear these abbreviations bandied about by consultants and suppliers. They’re buzzwords, and they are trendy. And they can often give the impression of “leading edge” solutions. I’m not saying that products and services which are marketed with these labels can’t deliver results or aren’t beneficial solutions; but don’t be confused or bedazzled by the alphabet soup of acronyms and abbreviations.

If you know what they are, knowledge becomes power to understand what’s being sold, and more importantly, to understand how to utilize them in your Intelligent Automation journey.