Tradeshift: AI in B2B Commerce

Tradeshift is a B2B commerce and payments platform that connects buyers and sellers. Valued at $1.1 billion as of March 2019, the company is a fintech unicorn [1]. Tradeshift has more than 1.5 million businesses on its platform, and has been growing quickly, with its last twelve month’s revenues doubling [2]. Its products and services include:

• Tradeshift Pay is an end-to-end supply chain payment solutions. It enables suppliers to provide e-invoices and digitizes the accounts payable approval process. Tradeshift Pay also enables financing solutions such as dynamic discounting and factoring.
• Tradeshift Buy allows companies to set up their own marketplace for employees to purchase products from contracted suppliers.
• Tradeshift Go provides employees a virtual card that controls and monitors their spending [3].

Tradeshift is using AI technology since 2017 across all its products.

Tradeshift Ada

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Ada is a virtual assistant that enables users to collaborate, buy, and pay. While virtual assistants have been popularized by consumer technologies, they have only existed within B2B marketplaces recently. Ada uses machine learning and natural language processing to learn about users’ preferences and a company’s policies and procedures.

At the moment, Ada’s core capabilities include:

• Communicating with other users on behalf of one user. For example, Ada can reach out to members across the organization to obtain all the necessary approvals for a purchase or payment
• Providing information related to the procurement process, budget status, etc. For example, it can tell you how much a department has spent quarter over quarter or find information on a prior purchase [4].

Virtual assistants like Ada create value by increasing the speed and reducing errors within the procure to pay process. Moreover, by providing the information and following the procedures of a particular company, Ada creates value through personalization.

Opportunities

AI in B2B commerce is at an early stage of development. AI could be used in compliance, as way to identify payment fraud or to check for procurement rules and exceptions. It can reduce errors by recognizing inaccurate pricing or ensuring that invoices match a buyer’s rules. AI could also assist in supply chain management by identifying alternative suppliers or predicting unreliability in supply chains. As a result, Ada’s possible future use cases in the procure to pay process are numerous [5].

Challenges and Solutions

Ada’s success is subject to challenges. AI technologies need to be trained on large amounts of data, and as a result, the first challenge to Ada’s development is data availability. Most organizations only manage a limited amount of purchases through procurement technologies, limiting the amount of data generated [6]. Possible solutions include encouraging customers to use procure to pay software for all types of purchases through better product offerings or economic incentives.

Secondly, in order to fully leverage AI functionalities, end customers must understand AI’s uses and limitations. Doing so requires an understanding of technology and data science. Tradeshift may have to train customers on AI technology. This challenge may also be resolved if customers recognize the need for and hire a technology specialist that has experience working with AI technologies within procurement and A/P automation.

Tradeshift Ada shows that AI’s broad opportunity set will lead to changes within software providers, as they expand capabilities, and also amongst customers, as they learn how to use AI’s expanded capabilities.

[1] “Tradeshift Announces $250M Unicorn Round | Pitchbook”. 2019. Pitchbook.Com. https://pitchbook.com/news/articles/tradeshift-raising-200m-at-unicorn-valuation.

[2] WIRE, BUSINESS. 2019. “Tradeshift Announces Q3 2019 Results”. Businesswire.Com. https://www.businesswire.com/news/home/20191112005233/en/Tradeshift-Announces-Q3-2019-Results.

[3] “B2B Network For Supply Chain Purchasing, B2B Payments & Apps | Tradeshift”. 2019. Tradeshift.Com. https://tradeshift.com/.

[4] “Say Hello To Tradeshift Ada, An AI Layer On Our Commerce Platform”. 2019. Hub.Tradeshift.Com. https://hub.tradeshift.com/tradeshift-blog/say-hello-to-tradeshift-ada-an-ai-layer-on-our-commerce-platform.

[5] “AI Begins To Play A Role In Procurement And B2B Payments”. 2019. Business Trends And Insights. https://www.americanexpress.com/en-gb/business/trends-and-insights/articles/b2b-payments-and-procurement-using-AI/.

[6] Gartner. 2019. “Start Preparing Now For The Impact Of AI On Procurement.”