Question: What’s driving your thinking when it comes to the rollout of artificial intelligence in procurement?
Is it the efficiencies that might be gained from harnessing the technology? How about the insights that might be available? Or is it more fundamental, such as the potential new business models that might become possible? Or – whisper it quietly – the risks you face from not thinking about it at all?
Whatever’s going through your mind, as we kick off our Americas Procurement Congress 2024 in Miami this week, the topics of digitalisation and the ongoing march of AI are front and centre.
We have sessions distributed across the two-day agenda that go deep and broad on the subject, from CPO Challenger sessions focused on strategy development to case studies of implementation and various conversations that explore the issue.
And it was a conversation I had with Tim Herrod, until recently the CPO of lithium and speciality chemicals company Albermarle and now founding CEO of InTension Advisory, that offered most pause for thought.
Tim and I were catching up because he’ll be sharing his thoughts and expertise during our dedicated AI Forum that gets the Congress underway. His session will focus on how CPOs can move from concept to execution with AI and lay the foundations for long-term success.
But something he said particularly resonated – the need for CPOs to look at any AI strategy or rollout from the perspective of how procurement can bring a unique value-add to the enterprise. This is an entirely different way of thinking, shifting from procurement use cases to enterprise value creation powered by the combination of procurement and AI. Supply market data insights, real-time forecasting, prescriptive analytics, reactive supply chain redesign, traceability, and so on.
Such a mindset shift is important as it lifts CPOs from the constraints of the day-to-day to focus on more disruptive opportunities; in other words, how technology can be used to unlock opportunities that only procurement can gain access to.
In a world where many CEOs will be tempted to view the launch of multiple AI projects as a way to increase the company’s share price, it’s for other leaders to remain both rooted in reality while, at the same time, unrestrained by the traditional limits of their function.
And that will take imagination, experimentation and collaboration with peers.
Procurement with purpose
My colleague Niko Nurmi will be joining Tim Herrod at the AI Forum and will be supporting the facilitation of various roundtables focused on specific parts of the procurement process and how AI can unlock value.
Niko will also share preliminary data from our ongoing glide path research into the AI landscape, which shows the relatively slow uptake among Procurement Leaders members on the rollout of initiatives. Why? Data challenges, for one; second, not knowing where to start; and, third, challenges with internal capabilities or processes.
These are all good reasons, but none – not even all of them together – are good enough reasons to slow down investment in AI.
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