Serial technology entrepreneur and leader in AI innovation Lior Delgo identifies the perfect use case for integrating the game-changing technology into the workplace.
While the meteoric rise of AI seems like an overnight phenomenon, it actually took decades of painstaking research and development to reach this pivotal moment. For those who remained skeptical due to premature hype cycles, the reality is that AI has now definitely arrived, and those who do not act now risk falling behind competitors and missing out on critical efficiencies and innovations
As companies navigate the vast opportunities presented by AI’s technological advancements, deciding which projects to prioritize becomes a significant challenge. Not every initiative will prove effective, and some, while functional, may not significantly impact the bottom line.
Three factors should guide executives in the selection of AI projects:
- The applicability of AI to the department or area of your company that you lead
- The impact, i.e., determining whether it moves the needle
- The need for disruption and the opportunities for improvement compared to the current organizational status quo
Envisioning How AI Can Embody Similar Attributes to Better Support Your Team
AI holds immense potential to significantly enhance and streamline operations across departments, including marketing, engineering, customer service, and more. Let’s dive deeper into the details to understand how AI can be optimally applied across these organizational functions.
The key to unlocking AI’s potential lies in identifying the defining characteristics of top talent within these functions and envisioning how it can embody similar attributes to better support their work.
Depending on a company’s unique circumstances, the objective may be to enhance effectiveness, do more with less, or adjust headcount. While navigating this sensitive topic, executives should consider what job descriptions might be required in an AI-driven era.
For example, in procurement alone, key elements could include high emotional intelligence, a strong business background, understanding business context as much as the business does, excellent communication and collaboration skills to navigate complex value chains, and other strategic skills that machines cannot replicate.
However, in procurement today, practitioners are process-oriented, with negotiation skills and a comprehensive understanding of policy enforcement. They excel in financial analysis, document drafting, requirement gathering, stakeholder interaction, and prioritizing various tasks. Their ability to manage time effectively, report clearly, escalate proactively, and forecast accurately makes them invaluable.
Having outlined the key human talents to be augmented, let us now examine the characteristics of AI and how they can be combined to elevate and empower those essential capabilities.
Interview and Collect Requirements
AI agents can automate the initial stages of procurement by interviewing stakeholders and gathering requirements with precision and intelligence. This ensures a clear understanding of needs from the outset. Recent advancements in large language model (LLM) technology enable a truly humanized, machine-led interview process that is dynamic and personalized.
Modern LLMs can understand context better and generate coherent, contextually appropriate responses. LLMs combine linguistic prowess, contextual awareness, and adaptability to revolutionize requirements gathering. In addition, their human-like interactions foster collaboration, reduce ambiguity, and set the stage for successful procurement processes.
Exceptional Writing and Articulation
AI’s ability to generate detailed project scopes, proposals, and reports ensures that all procurement activities are well-documented and articulated. In turn this facilitates clear communication across departments and between buyer and seller. This aligns perfectly with the extensive narrative requirements of buying and sourcing, showcasing LLM’s potential to streamline complex language-based tasks.
LLMs generate content swiftly and efficiently. They do not suffer from fatigue or variations in writing quality. They comprehend industry or sector jargon, allowing them to communicate with experts and laypersons alike. Even language is not a barrier, allowing easy communication across cultures and borders.
Triage and Logic Understanding
AI can classify and direct sourcing events to the appropriate processes through logical analysis, ensuring efficiency and compliance with organizational protocols. The combination of LLM’s understanding of user intent, alongside the configuration of companies’ rules and policies, plus the machine learning aspect of selecting the most logical path, enables AI to guide users towards the optimal journey.
With recent models having increasingly long context windows, LLMs can also now logically analyze complex sourcing events and route them appropriately. Like a procurement professional, LLMs can dynamically adjust their triage decisions based on urgency, resource availability, stakeholder priorities, historical data, and user preferences. Retrieval Augmented Generation (RAG) has come along to aid LLMs’ access to procurement-specific information to help with grounding these decisions in nuanced policies and requirements.
Process Journey Implementation and Guardrail Enforcement
Automation and AI-driven workflows streamline procurement processes. They also help to enforce compliance, reduce human error and enhance efficiency. LLMs can be trained on organizational policies, legal guidelines, and compliance requirements.
When integrated into procurement workflows, they ensure that every step adheres to established rules. By automating routine tasks, LLMs significantly reduce the risk of human error. They also consistently apply policies, cross-check data, and flag any deviations. This will lead to more accurate and compliant processes at levels of coherence humans just can’t manage. In addition, they can adapt to changing policies or process modifications, learn from new examples, and adjust their behavior accordingly.
Marketplace Dynamics and Negotiation
AI technologies can introduce competition in terms of cost and quality and analyze proposal trends. They can also conduct negotiations on your behalf 24×7 to secure the best prices, contributing to significant cost savings for the organization. Recent research has shown that LLMs can consistently reach successful deals in negotiation scenarios.
Collaboration Across Business Units
AI promotes seamless collaboration and orchestration among procurement, finance, legal, and other business units. In doing so, it can ensure that all stakeholders are aligned and informed. An AI agent interacts and converses with all parties to ensure speed and precision. As LLMs do not have the incentives that individuals have, they will work for the best outcome for all involved.
Proposal Analysis and Decision-making
AI excels in analyzing proposals by swiftly processing vast amounts of data, identifying patterns, and extracting insights that human analysts might overlook. Even better, AI can efficiently run models and scenarios regarding proposals, providing rapid simulations and predictive analytics to assess various outcomes. Think of modern AI as a virtual but tireless and constantly improving analyst. One that is capable of handling complex tasks with speed and precision, augmenting your decision-making processes while simultaneously allowing you to optimize resource allocation.
Use AI to Pluck the Low-Hanging Procurement Fruit
A truly strategic choice is to begin your enterprise’s AI journey with procurement. This strategic choice holds the dual advantage of delivering immediate dividends through cost savings and enhanced operational efficiency. In achieving this, it will also lay the crucial groundwork for holistic, AI-driven transformation across the enterprise.
It’s a low-hanging fruit that will showcase to the rest of the C-suite the potential of AI to act as a catalyst for innovation. It will push the boundaries of what’s possible and pave the way for a future where intelligent automation enhances every aspect of your business operations.
The author is the Co-Founder & President of spend management automation leader Globality.
He was previously Co-Founder and CEO of FareChase (acquired by Yahoo) and VideoSurf (acquired by Microsoft).
Globality is a leader in autonomous procurement, revolutionizing the sourcing and buying process for large and midsize enterprises. Globality’s AI-powered bot, GLO, unlocks productivity and purpose, optimizing company spend, by creating precise requirements, identifying qualified suppliers, providing negotiation insights, and facilitating data-driven decisions. GLO is loved for its delightful user experience, deep automation, and embedded intelligence. Globality’s enterprise customers are achieving 10%–20% cost savings, 70% efficiency gains, and 20x ROI.
