Cracking the AI Code: How

to Transform Procurement
Challenges into Business
Value

Wednesday October 2, 2024

1
Webinar Information

All participants are muted during the webinar

Questions? Please raise your questions in the chat box and we will try our
best to answer them at the end.

2
Speakers

John Steedman Dimitri Koulouriotis Prakash Manden Robert Dennis

VP Product Management, Product Manager, Innovation VP Data & Analytics Director, Content Marketing
JAGGAER One

3
POLL
What do you expect from this webinar?

• Discover emerging AI trends in procurement.

• Explore real-world AI use cases.
• Address AI-related data privacy concerns.
• Identify the best AI solutions for my needs.

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Agenda

1. JAGGAER – An Introduction

2. AI Trends in Procurement

3. AI and Gen AI in Procurement – Examples

4. Procurement Predictions – Future

5. AI Technology Trends

5
JAGGAER is Source-to-Pay and Supplier Collaboration
What We Do
JAGGAER provides an intelligent Source-to-Pay and Supplier Collaboration Platform that
empowers organizations to manage and automate complex processes while enabling a highly
resilient, responsible, and integrated supplier base.

Where We Are Going

Embedding intelligence for a hyper-automated, conversational, and collaborative procurement
platform that enhances human decision-making and accelerates business outcomes.

Operating Statistics Global Operations

1,200+ 1,400+
Employees Customers

13M+ $2.8T+
Suppliers on Annual Managed
Platform Spend Countries Worldwide: 55

© Copyright 2024 JAGGAER – All Rights Reserved 66

JAGGAER One
An intelligent platform that connects finance, procurement and supply chain, optimizing
costs, improving decision-making, and mitigating the unexpected

Networked: Community of enterprise buyers,

N suppliers, and partners united on a common,
cloud-based platform

Intelligent: Embedding intelligence for a hyper-

I automated, conversational, and collaborative
platform that enhances human decision-making

Comprehensive: Award-winning breadth and

C depth with highly relevant upstream and
downstream industry solutions

Extensible: Process orchestration with true

E configurability, integrated extensions, plug and play
interoperability, and business system connections

7
JAGGAER One
An intelligent source-to-pay and supplier collaboration platform for both indirect and
direct materials procurement

8
Embedded Intelligence
JAGGAER AI improves decision-making and accelerates business outcomes by
embedding hyper-automated, conversational and collaborative intelligence

Data Science Team

Data Governance
Machine Learning
Natural Language Processing
Generative AI

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Embedded Intelligence
JAGGAER AI improves decision-making and accelerates business outcomes by
embedding hyper-automated, conversational and collaborative intelligence

$2.8T Private 30+ Relevant 13M

Input Sources of
Data Science Team
Proprietary Data
Data Governance Accelerated
Machine Learning Outcomes
Natural Language Processing
Generative AI

Better decisions, Increased velocity & Workforce development, Policy conformance

fewer surprises agility productivity & sustainability & regulatory compliance

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11

AI Trends in Procurement
Examples

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Three Main Takeaways

AI is Reshaping Procurement: The adoption of AI

technologies is transforming procurement, enabling
teams to overcome challenges and drive greater
efficiency and value.

Generative AI's Maturation: As generative AI

moves beyond the peak of inflated expectations,
it’s essential to focus on practical applications that
deliver measurable results in procurement.

Focus on Strategic Innovation: As organizations

increasingly prioritize AI, it’s crucial for
procurement professionals to embrace innovative
strategies and embrace this technology.

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Procurement 2024

Inflation and Economic Growth or Global Supply Chain Trade Tariffs and Geopolitical Currency
Interest Rates Recession Disruptions Regulations Tensions Fluctuations

Raises costs of Affects company Leads to product Affects costs and Disrupts supply chains, Alters the costs of
borrowing, potentially revenue and unavailability, increased may necessitate introduces sanctions. internationally
making procurement procurement budgets. costs, and delivery adjustments in sourcing sourced goods.
more expensive. delays. with vendor shifts.

Labour Market ESG ESG Natural Consumer Cyber Security

Dynamics Social Environmental Disasters Behaviour Shifts Attacks
May increase Requires ethical Climate change Disrupts local Shifts in Risks business
production costs. compliance and reporting targets are pushing for supply chains, affects demand patterns. operations and data.
within the supply chain. green sourcing, affects product availability.
company reputation.

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• 3.5x growth in 2 years
• 1 of the top 3 topics discussed
by C-Level is AI

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15
16
17

AI in Procurement
Examples

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AI: Solving Procurement Complexity

• Pressure to do more with less

• High volume of manual time-consuming

activities

• Solution adoption challenges

• Easy access to experiential knowledge

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JAGGAER Advise

Invoice to PO Matching
JAGGAER One

JAGGAER Advise

Commodity Code Selection

AI Supplier Suggestions

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AI-based PO Invoice Matching Recommendations

MATCH FOUND!

Companies receive thousands of invoices without PO numbers and AI/ML engine leverages invoice and PO data to determine
struggle to manually match the invoice to the appropriate order. the most probable PO line match.

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Intelligent Document Validation

Leverage AI to automatically provide suppliers

documents checks & validation.

Checking the validity of 1 document / 1 supplier takes

~ 10 minutes. Imagine when you have thousands of
suppliers and multiple documents to check.

Compliant

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Requisition line-level AI/ML recommendations

Approvers need to repetitively scrutinize financial details AI-based line-level approval confidence
for individual lines, often for common purchases that they recommendations based on past approval history with
approve regularly quick reference indicators.

22
How about GenAI?

23
Comparing classic AI with Generative AI in applications
and technologies

‘Classic’ AI Generative AI
Classical machine learning solves regression and classification Generative AI is used to create new content in different formats
problems and can make predictions for specific effect relationships. in an automated way.

1 3.4 0.2 Smaller datasets where features are Huge (unstructured) amounts of data
2.9 8.6 7 selected by humans or easily found like images or text, in which the models
9 0.4 5.2 by the models. finds relationships and features.
• Machine learning are trained with • Complex models (neural networks) that go
supervised or unsupervised beyond the statistical procedures of the
learning. standard models
• Find correlations within data and • Find patterns and relationships within
can make prediction data and reassemble them to create
• Easy to implement; Can also be original outputs
performed on simple laptops • Require a lot of resources for
A[%] B[%] Result of a regression analysis or training → very cost- and time-intensive
classification task or clustering in
quantitative or categorical form (e.g., Generate new content in image, video,
probabilities, dependencies, segments) text, and sound formats from learned
patterns and contexts.

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Transforming Procurement
Three Pivotal Roles of Generative AI

Uncover Valuable Document Creation & Improved

Insights Summarization Collaboration

Effective procurement relies on Procurement teams handle Procurement is based on many

valuable insights, whether from various document types, from interactions among the
internal supplier data or external RFIs to contracts. Generative AI procurement teams, internal
benchmarks and market trends. excels in document creation, stakeholders, and suppliers.
Generative AI efficiently extracts already capable of generating
relevant insights to inform credible RFPs, RFQs or SOWs.
strategic decision-making.

25
Contract Summarization

Manual contract summarization, authoring, and revision are Generative AI expedites contract summarization, accelerating
time-consuming activities. contract approval processes.

Customer data remains confidential and is not stored in public domains. 26

Alternative Text Recommendation & Potential Risk
Assessment

Manual contract authoring and revision are time- Generative AI to propose alternative clauses or unveil
consuming activities that can lead to inefficiencies. potential risks, accelerating contract authoring.

Customer data remains confidential and is not stored in public domains. 27

 Next up
AI-powered Smart Quote
Manual creation of simple sourcing events
slows procurement, limiting supplier options
and delaying cost savings.

Intelligent Quick Quote reduces manual effort and

enables customers to focus on strategic decision-
making rather than administrative tasks

Efficient
Reduces manual efforts, accelerates the sourcing process,
and drives procurement efficiency

Value
Enhances decision making, leverages data insights,
optimizes costs, and improves supplier relationships

28
28
Hello. Here is a summary of the contract with some Key Takeaways…

Summary:
This contract establishes a framework for Oracle America, Inc. to provide hardware,
software, cloud services, and related products and services to the State of Texas
through the Department of Information Resources (DIR).

Some key takeaways:

• The contract, DIR-TSO-4158, is between the State of Texas, through DIR, and
Oracle America, Inc. for Oracle branded products and services.
• It stipulates compliance with Texas procurement laws and outlines the order of
precedence for document conflicts.
• The contract duration is two years with the possibility of two additional two-year
terms and up to 90 days extension by mutual agreement.
• Products and services under the contract include Oracle Branded Hardware,
Software, Cloud, and related products and services, with provisions for product
and service updates.
• Termination clauses allow for contract termination due to non-appropriation,
convenience, for cause, and in case of force majeure.

Ask me anything about this contract…

Can Oracle use resellers?

Yes, Oracle can utilize designated third parties, referred to as "Resellers," to provide
sales support resources to customers under this contract.

Tell me what I should know about the use of resellers?

29
Hello. Here is a summary of the contract with some Key Takeaways…

Summary:
This contract establishes a framework for Oracle America, Inc. to provide hardware,
software, cloud services, and related products and services to the State of Texas
through the Department of Information Resources (DIR).

Some key takeaways:

• The contract, DIR-TSO-4158, is between the State of Texas, through DIR, and
Oracle America, Inc. for Oracle branded products and services.
• It stipulates compliance with Texas procurement laws and outlines the order of
precedence for document conflicts.
• The contract duration is two years with the possibility of two additional two-year
terms and up to 90 days extension by mutual agreement.
• Products and services under the contract include Oracle Branded Hardware,
Software, Cloud, and related products and services, with provisions for product
and service updates.
• Termination clauses allow for contract termination due to non-appropriation,
convenience, for cause, and in case of force majeure.

Ask me anything about this contract…

Certainly, here are the key points about Oracle's use of Resellers under the contract:
Can Oracle use resellers?
• Designation: Oracle can designate third parties as Resellers to offer products and
services.
•Yes, Oracle
HUB can utilize Oracle's
Compliance: designated third parties,
designation referred to
of Resellers as "Resellers,"
must tostate's
align with the provide
sales support resources
Historically to customers
Underutilized Businessesunder
(HUB)thispolicy.
contract.
• DIR Approval: The Department of Information Resources (DIR) reserves the right
to approve or reject proposed Resellers.
• Performance andI Compliance:
Tell me what Oraclethe
should know about remains
use of responsible
resellers? for ensuring that
Resellers adhere to the contract terms and maintain the expected performance
standards.
• Pricing Consistency: Resellers are required to offer the state pricing that is
consistent with the terms of Oracle's contract, including the consideration of any
DIR administrative fees.

These points ensure that the involvement of Resellers does not compromise the
contract's integrity, pricing, or service quality.
30
• The contract, DIR-TSO-4158, is between the State of Texas, through DIR, and
Oracle America, Inc. for Oracle branded products and services.
• It stipulates compliance with Texas procurement laws and outlines the order of
precedence for document conflicts.
• The contract duration is two years with the possibility of two additional two-year
terms and up to 90 days extension by mutual agreement.
• Products and services under the contract include Oracle Branded Hardware,
Software, Cloud, and related products and services, with provisions for product and
service updates.
• Termination clauses allow for contract termination due to non-appropriation,
convenience, for cause, and in case of force majeure.

Ask me anything about this contract…

Can Oracle use resellers?

Yes, Oracle can utilize designated third parties, referred to as "Resellers," to provide
sales support resources to customers under this contract.

Tell me what I should know about the use of resellers?

Certainly, here are the key points about Oracle's use of Resellers under the contract:

• Designation: Oracle can designate third parties as Resellers to offer products and
services.
• HUB Compliance: Oracle's designation of Resellers must align with the state's
Historically Underutilized Businesses (HUB) policy.
• DIR Approval: The Department of Information Resources (DIR) reserves the right to
approveWillor reject
the proposed
contract Resellers.
auto-renew?
• Performance and Compliance: Oracle remains responsible for ensuring that Resellers
adhere to the contract terms and maintain the expected performance standards.
•Yes,Pricing Consistency:
the contract Resellers
will renew are required
automatically to the
under offer the state
same termspricing that is consistent
and conditions unless
with the terms of Oracle's contract, including the consideration of any
either party provides notice to the other party 60 days in advance of the renewal DIR date
administrative
stating fees.wishes to discuss modification of terms or not renew. This
that the party
provision allows for the contract to continue seamlessly unless either the Department of
These pointsResources
Information ensure that the or
(DIR) involvement of Resellers
Oracle America, does to
Inc. wishes notmake
compromise
changes the
or
contract's
terminate integrity, pricing,
the agreement or service
prior quality.
to the commencement of a new term.
31
Ask me anything about this contract…

Can Oracle use resellers?

Yes, Oracle can utilize designated third parties, referred to as "Resellers," to provide
sales support resources to customers under this contract.

Tell me what I should know about the use of resellers?

Certainly, here are the key points about Oracle's use of Resellers under the contract:

• Designation: Oracle can designate third parties as Resellers to offer products and
services.
• HUB Compliance: Oracle's designation of Resellers must align with the state's
Historically Underutilized Businesses (HUB) policy.
• DIR Approval: The Department of Information Resources (DIR) reserves the right
What is
to approve orthe renewal
reject date?Resellers.
proposed
• Performance and Compliance: Oracle remains responsible for ensuring that
Resellers adhere to the contract terms and maintain the expected performance
Based on the information provided and the last signature date of July 30, 2018, the
standards.
• Pricing Consistency:
initial two-year term of thisResellers
contract would end on to
are required July 30,the
offer 2020. Given
state thethat
pricing contract
is
allows for automatic renewal under the same terms and conditions unless
consistent with the terms of Oracle's contract, including the consideration of anyeither party
provides notice of non-renewal
DIR administrative fees. or a wish to discuss modification of terms 60 days in
advance of the renewal date, the first possible renewal date would be July 30, 2020.
These points ensure that the involvement of Resellers does not compromise the
If the contract
contract's was renewed
integrity, forservice
pricing, or an additional
quality.two-year term without modification or
termination, the next renewal date after that would be July 30, 2022. The contract
mentions the potential for two such optional two-year renewal terms, followed by the
possibility ofthe
Will extending
contractthe term for up to ninety (90) additional calendar days by
auto-renew?
mutual agreement.

Therefore, withoutwill
Yes, the contract specific
renewdates indicatingunder
automatically the exercise
the sameof terms
non-renewal options or
and conditions
amendments to theprovides
unless either party contract notice
duration:
to the other party 60 days in advance of the
•renewal
The initial
date renewal datethe
stating that would
partybe July 30,
wishes 2020 modification of terms or not
to discuss
•renew.
The This
subsequent
provision renewal
allowsdate, assuming
for the contract the first renewal
to continue option was
seamlessly exercised,
unless either the
would be of
Department July 30, 2022 Resources (DIR) or Oracle America, Inc. wishes to make
Information
changes or terminate the agreement prior to the commencement of a new term.
32
Traditional AI, Generative AI, Composite AI
The Future

Both generative AI and Generative AI could work In the context of composite

traditional AI have in tandem with traditional AI, integrating both
significant roles to play in AI to provide even more generative AI and traditional
shaping our future, each powerful solutions. For AI techniques can lead to
unlocking unique instance, a traditional AI even more powerful and
possibilities. could analyze user behavior versatile solutions.
data, and a generative AI
could use this analysis to
create personalized content.

33
POLL
What AI-driven feature will transform procurement the most?

• Hyper-automation for repetitive activities and faster augmented insights.

• Platforms becoming more conversational and collaborative.
• Autonomous supplier negotiation
• AI bots that schedule meetings in the metaverse for ultimate productivity

Or, maybe too late for this poll! Super intelligent robots are taking over!

34
Procurement Predictions
Future

35
Procurement Platform – A Future Glimpse

Hyper Automated Intelligent Conversational Collaborative

Future AI advancements AI is driving faster, more Conversational Enhanced platform

will further accelerate informed decisions, with interfaces for more engagement automates
automation, optimizing its insights continually intuitive interactions, and improves
resource utilization and advancing and expected encouraging interactions with
boosting productivity. to accelerate further in adaptability and easy suppliers.
the future. to use, eliminating the
need for manual
database searches.

36
Transforming Procurement
Three Areas to Consider
Prioritize Transparency
Build Infrastructure and Using Gen AI and Be
Outline a Clear Strategy Improve Data Quality Aware of Pitfalls

• Gen AI is an enabler and a • Assess your existing capabilities, • Identify which data within your
fundamental component of including identifying an AI/ML team organization is sensitive. Evaluate
innovation. It is a means to an end, lead and department, determine the the presence of well-defined policies.
acting as a pathway to achieve your necessary data requirements, and the Also, involve all relevant stakeholders
goals faster and accelerate progress. selection of the appropriate AI system. to oversee the AI development
And lastly, establish an ongoing process;
• It’s key to ensure a clear alignment
process to monitor and refine the
with your business objectives and • Be mindful of AI pitfalls (such as
outcomes.
confirm that AI and Generative AI hallucinations).
genuinely enhance those objectives.

95%
of data-driven decisions are expected to be at least partially automated by next year.
And yet, only 10% of CEOs say that their business uses artificial intelligence strategically.

37
AI Technology Trends

38
AI Technology Trends
Evolution over time, complexity

Statistical and
Deep Learning Generative AI Emerging Paradigms
Traditional ML

• Linear & Logistic regression • Feedforward Neural Networks • Generative Adversarial • Q-Learning (reinforcement
• Decision Trees and Random • Convolutional Neural Networks (GANs) for image learning)
Forests Networks (CNNs) image generation • Deep Q Networks (DQN)
• Support Vector Machines processing • Variational Autoencoders • Policy Gradient Methods
• Recurrent Neural Networks (VAEs)
• K-Nearest Neighbors (KNN) • Proximal Policy Optimization
(RNNs) • Large Language Models (e.g. (PPO)
• Naïve Bayes GPT series) for text
• Long Short –Term Memory • Self-supervised learning
(LSTM) for sequential data generation
• Diffusion models for image • Federated Learning for
• Transformers privacy preserving
and audio generation
• Natural Language Processing • AGI (Artificial General
• GenAI Agents
Intelligence)

39
Model Training

Data Training

40
Model Utilization
AI Use Cases

-to-Contract
Source
rning Natu
Lea ral
ine Pro Lan
ce gu
ch ss
i
Ma

ag
ng
e
Data Science

Governance
We send customer data to
Team

Data
internal models deployed in our
own environment
Internal Models
od
AI
M

el e
Tra tiv
inin era
g Gen

Procure-to-Pay

• This is an example of a privately-run model;

• Use Cases: Smart PO Matching, Smart Commodity Code, Supplier Recommendations, ContractsAI

41
Model Utilization
Gen AI Use Cases

-to-Contract
Source
rning Natu
Lea ral
ine Pro Lan
ce gu
ch ss
i
Ma

ag
ng
e
We send customer data to LLMs
Data Science

Governance
Team

ensuring that data path is

Data
protected and LLMs do not use
any data for training purposes.

od
AI
M

el e
Tra tiv
inin era
g Gen

Procure-to-Pay
Claude

• This is an example of a public-run model;

• Use Cases: Contract Summarization, Alternative Clause Recommendations, Risk Analysis;
• AWS does not retain any data we send, nor do they use the data for any training purposes.

42
GenAI Agents

• Autonomous software entities

• Capable of reasoning, collaboration, actions, and learning to
achieve goals
• Manage complex tasks with minimal human action
• End-to-end intelligent automation
• Future of software architecture

• Agents for Sourcing

• Agents for Contracts Management
• Agents for Procurement, Payments
• All functions of Procurement

43
AI Governance
Key Considerations at Jaggaer

Privacy Security Compliance Ownership

• Private, customer specific • Secure model training • Privacy policies are in place • No changes to existing
AI models, per feature, no pipeline and deployment. for data processing, and contracts on ownership
data sharing. Customer- No external access to AI JAGGAER ensures • Customers’ data used only
specific recommendations models compliance with applicable to deliver customer-specific
• Partnership with industry- • Model versioning, recreate- privacy laws enhancements
leading third-party providers ability • Compliance with industry • No external or third-party
(AWS) for public models • Continuous monitoring and standards such as GDPR access to customer data
with well accepted auditing • Regional private model
governance policies. No training and deployment
customer data usage for • Secure, encrypted data
model training. No customer transfer in-transit and at- • Regional public model
data storage rest access

Oversight by a dedicated internal AI task force and an AI Governance/Security sub-committee to

ensure continuous adherence to best practices and guidelines

44 44
Thank you!

© Copyri ght 2022 JAGGAER – Al l Rights Reserved

45
Q&A

46