Looking Ahead to the Impact of AI on Procurement

Artificial intelligence (AI) is making impacts on nearly every business function, including procurement. Lauren Elliott, Head of Technology Implementation at Exiger, talks with ProcureTech about developments to expect in the coming year.

What will the impact of generative AI (GenAI) be on procurement?

Lauren Elliott: “Being an AI company at our core, we embrace the GenAI revolution. The democratization and socialization of artificial intelligence in every industry helps us to accelerate the adoption of our AI solutions in both procurement and risk management. We believe that GenAI will help procurement professionals to make sense of the overwhelming volume of data they are asked to assess on suppliers, accelerate new skills development, make more informed decisions, and increase the speed of sourcing and contracting.

“It will take time, and there are risks in accuracy and quality if you don’t implement GenAI in a way that is augmenting educated users. There is no magic wand or silver bullet, but we lock arms with our clients and take the GenAI journey together. We think it will be one of the “superpowers” of the procurement professional of the future, helping them to synthesize price, performance, and risk into simple and intuitive answers in a sourcing process.”

What will be the next big digital innovation in procurement?

LE: “It’s the frictionless procurement environment. Imagine a sourcing process where you can narrow your selection to the vendors that meet your price, performance, and risk appetite before you even start a bid. We want to see our clients get back to the process of choosing the best suppliers and not bogged down in endless administrative or compliance checks. And, where those checks are necessary to find or contract with a supplier, to have a smooth, automated workflow to do so.

“It’s the ability to assess markets and suppliers in those markets without collecting data through time-consuming and manual means. Open-source data vendor assessment tools, exchanges, and certification marketplaces are becoming really valuable ways to have transparency into a market or supplier ecosystem without the traditional costly and often inaccurate market research process.”

What key talent changes are required in 2024 to enable digitalization?

LE: “We need to train people on risk-weighted decision-making. In this current regulatory, economic, and geopolitical environment, you can’t eliminate risk. And systems and automation are taking care of the obvious decision steps. Now people need to know how to know what matters in a procurement process; sometimes short-term cost gain is a long-term loss.

“I think that this comes down to the skill of strong business case development and listening to the operational stakeholder on their needs, not just the ask. I also think understanding and data and AI are crucial. The digital transformation isn’t possible without a digital-ready workforce.”

Exiger was recently named to the 2023 ProcureTech100, recognized as a risk management pioneer.

For more on supply chain and procurement trends to watch this year, check out our white paper, Supply Chain Resilience: 6 Factors to Watch in 2024.

More Resources:

• What Are Procurement Risks & How to Mitigate Them
• Govern the Full Range of ESG Risk in Supply Chains Today
• AI Is Transforming Supply Chain Risk Management Today