How is AI Making Procurement 'Cool'?

Writing a blog post on Globality's website, Lior Delgo, Co-Founder & President at Globality, believes that while many would not immediately associate procurement with being 'cool', AI is making it "One of the coolest functions in the enterprise."

Formerly leading an AI development team at Microsoft's Xbox, Lior knows what cool tech is. He passionately believes that procurement plus AI is not only cool, it's in fact "Glamorous and the cutting-edge of every global corporation."

What is cool?

Lior starts the blog post by discussing the premise of cool, which he described as: "A function of creativity, innovation, impact, personal brand and, as my Globality co-founder Joel Hyatt argued in a recent Forbes article, purpose."

"AI is enhancing all of these attributes across procurement and helping transform the function into a place where the brightest and best want to make their mark."

He highlighted its importance amidst the current skills shortage being seen in the industry, pointing to a recent Gartner study that found that only one in six procurement teams believe they have "adequate talent" to meet their future needs. 

As companies look to hire the best talent and use procurement strategically, they must provide an edge – and that edge is AI.

The cool factors of procurement

Lior's blog post goes on to outline what makes procurement and AI cool, with a range of different areas, such as:

Creativity: Lior argues, whether rightly or wrongly, the image of procurement has been tainted by its association with box-ticking. Individuals associate procurement with items such as compliance, regulations and bureaucracy. 

As a function of its role, it gives the impression that procurement lacks the sort of creativity or flexibility seen in other departments. Lior argues that democratising data access and handling routine processes is exactly what AI does most efficiently, freeing up procurement people to be more imaginative and creative.

While this creativity looks different for all organisations, with some pouring into driving more sustainable practices, while others focus on ethical practices which have a positive impact on people and the world. It could include collaborating across organisations with its own department and suppliers – or running campaigns to raise awareness internally and externally to promote the ways procurement is having a positive impact through measures like cost savings.

Innovation: Through the use of AI, innovation is being driven forward by its simple use. However, procurement stands out as one of the best use cases for genAI. Through its use in procurement, companies can analyse and synthesise huge volumes of complex, unstructured text-based documents to help specialists in all types of sourcing scenarios – from scoping RFPs to making buying decisions.

Lior believes that the key point is for procurement to learn how to partner with AI. With items such as complex high-stakes spend categories, which he believes are the most difficult to procure – and until now, to automate.

"Today, instead of investing hours or days writing a long, detailed brief that covers every possible scenario, anyone can 'converse' with Gen AI," Lior adds.

"They can convey what we call 'complex intent' at different stages in the procurement journey using natural language.

"This not only saves considerable time but achieves much better outcomes because the AI is drawing on a massive body of accumulated knowledge and intelligence from a huge number of buyer and seller transactions."

Lior believes that AI-powered innovation does much more than just automating those simple procurement tasks. It is rapidly changing a complex process into something people can do more efficiently, optimally and personally, with a realistically sized team of procurement specialists.

Impact: Lior believes that there are not many cooler things than being able to make a positive impact on productivity in today's lean, cost-conscious business climate.

"As Scott Belsky, Adobe's Chief Product Officer and board member of Globality, says in his Substack Implications: 'As smaller companies modernise using a new AI-native stack of technology, they no longer need to grow their team to scale their ambition'," Lior adds.

With procurement's reputation having suffered in the past due to productivity issues, tasks such as data entry, invoice processing and purchase order processing were very manual and error-prone. With these systems being fragmented and siloed, leading to inefficiencies.

As supplier management was inconsistent and unstructured, AI-based procurement addresses all these issues.

There is also the impact of AI-based procurement in its ability to source more intelligently and save companies huge amounts of money. Lior adds: "Matt Prichard, Fidelity Investments' CPO, reported seeing a 20% price improvement by using AI-based autonomous sourcing, for example."

Personal Brand: With the stress of working in procurement, and its complexity, tight deadlines and cost targets all compiling to make the work difficult enough. With these "negative stereotypes about procurement working as an obstacle to 'get around,' which causes friction and complications, can feel demoralising," adds Lior.

He adds that the people he has met want to make a positive difference in their companies. But if these specialists lack the tools and technology to do their jobs productively, at the pace of business, they are set up to fail, "which grinds down morale".

If procurement can be liberated from the drudgery, making all the steps quicker with better outcomes, AI can improve almost all areas of the function and those who deliver it.

"It is worth reiterating that procurement drives the trade of trillions of dollars around the world," concludes Lior.

"With the power of AI-driven sourcing technology, procurement teams will be participating in the creation of the largest economic engine of our lives, something which glues the world together. I think we can all agree that's pretty cool."

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