Tech Startup Pactum Enables Walmart AI Chatbot Capabilities
Negotiation is a crucial part of the procurement process.
It allows businesses to get a better deal from a vendor regarding pricing, contract terms and conditions and delivery or shipping costs.
The company, based in Mountain View, California, has seen a significant investment, led by Atomico venture capital firm, of US$11mn to fund expansion.
Pactum’s AI Chatbots
CEO and Co-Founder of PactumAI, Martin Rand, studied negotiating strategies under the influence of author and former FBI negotiator, Chris Voss.
Voss is a world-renowned expert on bargaining tactics and released his book on the subject, ‘Never Split The Difference’, back in 2016.
Rand, today, provides negotiation software solutions in the form of AI chatbots that his studies of Voss’ techniques have significantly influenced.
The software, which powers the chatbots, is used to manage negotiations with a network of vendors that large corporations can otherwise struggle to optimise.
The initial startup process sees the client working with Pactum’s human negotiation experts to set the parameters for the chatbot.
At this stage, the experts will discuss:
- Price terms
- Payment dates
- Delivery requirements
- Quality guarantees
- Trade-offs the client is willing to make
- Red lines that the chatbot cannot cross
- Any other terms and conditions
The initial client specification then establishes a set of rules for the chatbot to work with, maximising the value for each side of every negotiation.
The chatbot will even incorporate some of the psychological tactics advocated by Voss, like confirming a vendor's requirements by mirroring its response.
Negotiating for Large Corporations
Pactum currently operates with 28 employees, set to double by the end of 2021, and has seen its revenues increase tenfold in the past year.
Speaking to , Rand explained Pactum has allowed large customers “to gain 2.8% to 6.8% in profitability from each supplier deal Pactum negotiates, with one company seeing additional $1.5 million come in monthly on these contracts.”
Logistics company Maersk is trialling the software with the aim of instigating auctions as a contracting method for transport projects.
Maersk head of digital procurement, Jacob Gormen Larsen, explained to Fortune that “by asking questions through the chatbot that force a customer to choose between alternatives, the system can build up a much better picture of both sides’ “value function,” the graph of [trade-offs] they care about.”
How IBM Watson Orchestrate uses AI to automate procurement
Announced at THINK 2021, IBM unveiled Watson Orchestrate to help businesses that are rapidly embracing automation as part of their digital transformation.
IBM says automation software can be used to augment human capabilities and free-up staff to focus on more strategic work that requires critical thinking and human interaction.
This very thought was echoed by Ninian Wilson, Vodafone Group Procurement Director, when interviewed by Procurement and Supply Chain Digital magazines recently, as he shared his views on an exciting future for procurement.
Wilson explained how Vodafone is shifting “to what we call ‘autonomous sourcing’, which is going to be the next sort of quantum leap in procurement – procurement that runs itself with almost no human intervention”.
Watson Orchestrate will provide workers with access to their own interactive AI to help them perform tasks faster – from procuring approvals to contract lifecycle management.
Market research commissioned by IBM recently found that almost one-third of IT professionals surveyed globally say their business is now using artificial intelligence (AI), with 43% saying their company has accelerated their rollout of AI as a result of the COVID-19 pandemic.
The Global AI Adoption Index 2021 revealed that while AI adoption was flat in 2020, the need for AI has been accelerated and is already changing how businesses automate key workflows.
5 Ways IBM Watson Orchestrate Works Smarter
1. Self-serve and easy to use automation
Business professionals can use natural language to interact with Watson Orchestrate, without the need for IT skills.
2. Learns and improves as it goes
Watson Orchestrate understands and maintains context based on organisational knowledge and prior interactions. It can pull data from Salesforce, SAP or Workday.
3. Improves productivity and business performance
Research from Forrester shows IBM’s automation technologies can help businesses reduce manual processes by 80%.
4. Part of a single portfolio for business and IT AI-powered automation
While most technology companies tend to focus on either business or IT automation, IBM offers a single portfolio comprising both sets of capabilities, all built on Red Hat OpenShift and available to run anywhere.
5. Supported by an automation ecosystem
According to a new “Global AI Adoption Index 2021” survey , 80% of companies are already using, or plan to use in the next 12 months, automation software and tools.
More than 30 companies have said they intend to join IBM’s ecosystem of partners using IBM Cloud Paks for Automation, including Confluent, GitLab, HCL Technologies, Infosys, Intel, Tata Consultancy Services, Whitespace, and Wipro.
Watson Orchestrate is currently in preview in the IBM Cloud Paks for Automation.