Crystal Ball 2025: Emphasize companywide technology investments
A note from Scott Achelpohl, managing editor of Smart Industry:
Welcome to the Crystal Ball Report for 2025, which is appearing in this web space the rest of December and into January as a series of contributed pieces from esteemed experts in manufacturing technology.
We've invited these thought leaders to look into their "crystal balls" and tell us what's ahead (with an emphasis on data, AI, and cybersecurity). So please enjoy the series and, from all of us at SI, have a happy and safe holiday season and a prosperous and profitable new year.
However, it’s important to note that digitally transforming an organization isn’t an overnight process. It requires consistent planning and investment. As AI matures over the next year(s), leaders must stay updated to the new use cases that can be applied to their daily operations for better results.
Broadening AI use cases across functions
Effective proactive planning requires applying AI to various business use cases. While many companies recognize the value of AI, many don’t even know where to start or which applications align best with their goals. Integrating AI capabilities within spend management empowers efficiency, end-to-end visibility, and data-driven decision-making, and it’s likely we’ll start to see more businesses invest in spend management in the coming years.
See also: Six ways to incorporate AI into your manufacturing operations
In 2025, leaders will start to uncover just how AI will help transform businesses, industries, and professions like finance and procurement. As AI use cases mature, we’ll see business processes become faster and more accurate.
Applying AI to automate manual, transactional, and repetitive tasks in spend management—such as purchasing based on their organization’s specific policies, automating invoice processing, and fraud detection—will make these processes more efficient and actionable than when human-operated.
Across finance and procurement functions specifically, AI can drastically improve productivity on tasks such as sourcing, contracts, and invoicing. This will save employees more time to focus on strategic initiatives or operations, such as proactive planning for business continuity and navigating potential risks. AI will also enhance running predictive models based on past trends to better predict the future and assist in higher-level planning activities.
See also: Report reveals ‘grind’ of digital transformation, slow road to success
Integrated scenario planning can help navigate tasks like invoice processing, fraud detection, and compliance based on their specific organization’s policies to improve performance. While AI needs more time and data to mature and transform business processes fully, the industry will focus on AI features that drive meaningful impact and measurable improvements throughout 2025.
The ultimate goal is to establish one unified platform that handles everything from Point A to Point Z, including sourcing, vetting, and buying from suppliers, from invoicing and compliance to governance and control. AI will enable better visibility and data-driven insights, equipping leaders to make more meaningful decisions to drive continuous business value.
Prioritizing cost savings for increased resiliency
Across spend management functions, finding ways to drive cost savings will take center stage in 2025. As businesses battle with the ongoing effects of inflation, resource scarcity, budget planning, supplier negotiations, and inventory management, prioritizing cost savings will remain critical across businesses not only to safeguard profitability, but to enable enterprises to allocate resources more effectively amid a challenging economic climate.
Podcast: AI, automation and computer-aided manufacturing
Establishing KPIs and benchmarks across these processes will help turn the numbers into meaningful dollars. At the same time, it can help leaders identify areas of unmanaged spend while empowering employees with the right mix of tools and tactics to meet cost-saving goals.
For example, AI can analyze spend patterns and run predictive models that will identify cases of indirect spend as more opportunities for cost savings, such as for demand management or specific product categories in industries like retail and consumer goods.
Processes like forecasting demand, managing supplier relationships, and analyzing spend are especially critical in these sectors to improve cost and operational efficiencies, improve working capital, and remain agile amid potential disruptions. Eventually, AI will be able to handle category management to streamline sourcing and drive higher cost savings.
Webinar rewind: 'Next Year’s AI' and more 2025 industrial technology insights
More businesses are looking to amplify their new and existing AI technologies to streamline operations even further in 2025. AI use cases will significantly improve spend management to achieve better resiliency, tighter supplier collaboration, and balanced tradeoffs while addressing potential disruptions and hurdles.
Improving spend management for years to come
As we enter the new year, it’s essential to remember what leaders can achieve when looking inward and paying attention to their businesses. AI will continue to emerge as a transformative tool for business, finance, and procurement leaders, enabling them to navigate ongoing disruption and mitigate risk effectively.
See also: Managing the industrial edge: challenges, approaches and solutions
The possibilities of AI are immense—it has the power to help manage direct and indirect spend with prescriptive insights, unlock hidden savings, and improve margins to drive profitable growth.
At the same time, it will help leaders better manage risk and streamline operations to drive efficiency and continuous value. In 2025 and beyond, AI will be integral for companies seeking to gain a competitive edge in an evolving macro-economic landscape.
