AI in Source-to-Pay: practical applications and tips for your organization

Generative AI in S2P Applications

Generative AI is now also breaking into Source-to-Pay applications. We are seeing strong developments in automating invoice processing, such as the automatic coding of invoices based on booking history. Larger S2P applications also integrate chatbots that support users to find the right ordering channel or suppliers and automate tasks. Unfortunately, this is still limited in mid-market solutions.

We expect that generative AI will soon play a major role in improving the “guided buying” experience, predicting purchasing needs and optimizing supplier management by recognizing risks more quickly. AI also simplifies contact analysis by automatically checking clauses and helps detect fraud by recognizing anomalies in transactions. This leads to more efficient, accurate purchasing processes and cost savings.

Microsoft Copilot and ChatGPT: The Benefits

In addition to generative AI in S2P applications, you can also use AI to support your daily work. Two of the best-known AI tools are Microsoft Copilot and ChatGPT. Both offer support, but in a different way and with unique benefits.

Microsoft Copilot

• The biggest advantage of Copilot is its direct integration with tools such as Word, Excel, and Teams. For example, you can edit purchase documents or note meeting minutes from your workflow.
• Copilot helps automate manual tasks, such as supplier management, by automating smart data analysis and automatic document updates.

ChatGPT

• ChatGPT, on the other hand, offers a flexible and broader output. You can use it for in-depth analyses, such as questions about purchasing strategies or optimizing contract management.
• It's an excellent tool for creating more complex documents, such as purchase agreements, and provides customized answers that make your entire S2P process more efficient.
• Also handy: with the web search function, for example, you get a quick insight into available suppliers on the market.

Your starting point with generative AI: the prompt

AI tools like Microsoft Copilot and ChatGPT each offer their own benefits. But to use these tools effectively, it is important to give the AI tool a good prompt.

A prompt is the question that you give to an AI tool as input. The quality of the output depends on what and how you ask. The clearer and more specific your question is, the more targeted AI can generate an answer that meets your needs.

This makes prompt wording a useful skill when working with AI tools, such as ChatGPT and Microsoft Copilot. Have you mastered this technique once? Then you save valuable time that you can spend on other priorities.

With PREPARE, you can set up an effective prompt

Do you want to formulate an effective prompt? With these steps, you provide clear questions that focus on the result you need:

1. PROMPT: Ask the question to the point
   The clearer the question, the better the output. Avoid vague formulations and focus on what you really want to know.
2. ROLE: Give a role and set the context
   Ask AI to take on a specific role. For example, let AI respond from the perspective of a project leader in S2P. You'll notice that the output focuses better on the needs of that specific role.
3. EXPLICIT: Name the goal and target group
   A good answer is tailored to a goal and target group. For example, a text for a steering committee requires a different writing style than communicating to operational buyers. You can indicate this difference in your prompt.
4. PARAMETERS: Set parameters for output
   Do you want a short and powerful answer? Then specify that the output must remain within a certain number of sentences. This makes your output clear and to the point.
5. ASK: Continue asking if the answer isn't perfect
   Are you not satisfied? Ask the AI tool for adjustments, such as using a specific writing style or adding sources. This way, you'll keep asking until the answer meets your requirements.
6. RATE: Let AI judge for itself
   You can also ask the AI tool to review your texts or documents. This can provide useful suggestions for improvements, so you can quickly increase the quality of your work.
7. EMOTIONS: Give AI an emotion
   Even though AI has no emotions, these tools are programmed to adapt to your needs. You can indicate that the AI tool is a perfectionist or that it should take on the role of a passionate employee. This can produce surprisingly good results.

Our S2P expert Esmee shares a tip for getting even more out of your AI tool:

“Confirmation is not only good for a person, but also for an AI tool. AI may not have a feeling, but it does indicate that the answer is in your desired direction! He then takes this with him to the next answer.”

Take a critical look at the generated output

You now know how to create an effective prompt. By using AI in the right way, you can save a lot of time on tasks such as preparing presentations, reports, and documents. This leaves you with more space to focus on what really matters to you. But always be critical to the output that AI tools generate for you.

Sometimes, AI tools can generate fictitious or incorrect information. To mitigate this risk, you would do well to keep thinking critically yourself. Ask ChatGPT or Copilot about the sources used. This way, you can decide for yourself whether the source is valid or not. And also check whether these sources exist: AI can hallucinate here too. You can even specify in the prompt that a statement is only valid if there are at least two sources that say the same thing. An example of such a prompt might be:

“Give 3 tips about change management techniques that you can use in software implementations. Support your text with a clear source reference in the APA style. Make sure you use at least two reliable academic articles for each tip to ensure credibility.”

Use Case of Generative AI in S2P

You can use generative AI for many different applications within Source-to-Pay. For example, consider:

• Preparing templates for contracts;
• Summarizing conversations such as market consultations or meetings;
• Reviewing suppliers' contracts;
• Preparing user sessions or answering user questions.

In the video below, we share step by step how you can use generative AI to prepare award and/or rejection letters.

You can also make good use of generative AI when preparing your spend analysis, even when using multiple source files. Curious how this goes step by step? Make create an account here and watch the video.

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