Anyone professionally concerned with strategic sourcing, spend analytics and cost reduction in the procurement process may need to avail of emerging “deep learning” technology. This rapidly developing branch of artificial intelligence (AI) enables synthetic neural networks to carry out advanced pattern recognition functions, similar to the human brain.
In deep learning, sophisticated algorithms are fed with huge quantities of data in order to “train” them for pattern recognition. The “trained” algorithms are then applied to fresh data for analysis.
The new field has been borne of recent AI advances in image and language recognition that have equalled and, in some cases, exceeded human levels of comprehension. According to a recent study from McKinsey Global Institute (Notes from the AI Frontier: Insight from Hundreds of Use Cases), while deep learning is still in a developmental stage, its potential is vast.
Companies who take advantage of this advanced technology could see an estimated added value in their total revenues of anything between 1% to 9%. In certain cases, this translates into trillions of dollars of potential added value, and those professionals who are the first to understand it are likely to be the big winners.
Commenting on deep learning technology, McKinsey partner Michael Chui stated: “If you learn sooner and faster, you have the chance to do much better relative to others.” Undoubtedly that will be true for technical experts who can master the new skills to utilise this technology, but the same also applies to managers. Anyone who understands how to apply deep learning to business problems is set to have numerous opportunities opened up for them.
While this technology is proving immensely versatile, Chui believes that its biggest advantages will lie in two key business areas: marketing and sales, and supply chains and manufacturing.
In supply chains, deep learning can deliver sophisticated benefits in yield optimisation and procurement analytics. As Chui added: “The technologies are levers of value creation … digital means you can do more, faster. If you can successfully scale something across an organisation or a customer base, you have that much more impact.”
Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.