Oracle: What are AI Agents and why Should Procurement Care?

AI agents are redefining the procurement landscape, combining advanced automation with decision-making capabilities that mimic human expertise.

It is becoming increasingly clear that by embracing these systems, organisations can streamline processes, enhance decision-making and optimise resource use.

This being said, it is also difficult to see through the buzz words and figure out exactly what AI agents are and how they can benefit your team. 

Here, Procurement Magazine takes a look at the Oracle Fusion Applications relevant to procurement leaders and asks why you should care - so you don't have to. 

What are AI Agents and how do they work?

AI agents are software entities designed to carry out tasks, make decisions and adapt to their environments based on their training and ongoing experiences.

They are assigned objectives aligned with organisational needs and operate autonomously within their defined roles. For example, a customer service AI agent might respond to a query about an order by connecting with various systems, such as shipping carriers and weather databases, to deliver an accurate update.

Agents leverage technologies like natural language processing, machine learning and retrieval-augmented generation (RAG) to retrieve relevant information from external databases or systems.

Unlike traditional systems triggered by pre-coded rules, AI agents use large language models (LLMs) to process complex workflows, adapt to novel situations and provide nuanced responses.

Oracle Executive Vice President Steve Miranda highlighted this shift at Oracle's CloudWorld conference, saying: “It’s a tremendous change in terms of input and output from our applications across the board.”

Why procurement teams should care

For procurement, AI agents offer transformative potential. Their ability to perform multi-step tasks, collaborate across departments and adapt to changing variables makes them ideal for managing intricate workflows. Consider a purchase order agent as an example:

1. Filter generation: The agent interprets a user's request to identify relevant filters for selecting purchase orders, using LLMs to generate a structured output such as JSON.
2. Query execution: It applies filters to create a query, defines parameters like result limits and fetches details via APIs.
3. Customised responses: Finally, the agent compiles results into a user-friendly response, dynamically adapting its outputs based on context.

This type of automation enables procurement teams to focus on strategy rather than manual, repetitive tasks. Oracle’s AI agents, integrated into its Fusion Cloud suite, already assist finance, HR, supply chain and customer service teams by creating forecasts, managing supplier quotes and optimising workflows.

Case Study: Purchase Order Agent

In Oracle's latest 'A-team Chronicles' explainer Dipak Chhablani, Principal Solutions Architect, explains how a PO Agent might work. 

"The agent begins by executing the generate_purchase_order_filters tool, which takes the user's query as input and utilises a prompt with the LLM to identify the relevant filters for selecting purchase orders," he says. 

"In this proof of concept, the LLM is tasked with extracting five predefined filters from the user input and returning the results as a JSON schema or Python dictionary containing name-value pairs.

"Next, the agent invokes apply_purchase_order_filters to convert the generated filters into a query (q) parameter, sets the result limit to 3 and defines the desired purchase order fields. It then calls the Purchase Order REST API to fetch the purchase order details. Finally, the agent leverages the LLM to respond to the user query based on the output from the tools."

"While this example simplifies the process by focusing solely on filter generation, the LLM can also dynamically generate values for the result limit and purchase order fields," he adds. 

With procurement budgets increasingly stretched, the need for smarter tools is urgent.

A Boston Consulting Group survey of IT buyers found that businesses plan to boost AI spending by 30% in 2024, even as overall IT budgets rise by just 3.3%. Advanced AI agents could deliver the cost-efficiency and data-driven insights needed to meet these demands.

Future trends: Multi-Agent workflows

Oracle's introduction of more than 50 AI agents marks a significant step toward multi-agent workflows. These systems can collaborate to complete complex processes, such as supplier onboarding or contract management.

For instance, an AI agent might compile data from past supplier interactions, integrate pricing comparisons and prepare a detailed proposal for procurement teams.

Oracle differentiates its offerings by tapping into the extensive data stored in its Fusion applications. This integration allows procurement professionals to access insights across financial management, HR, marketing and supply chain systems — all hosted on Oracle Cloud Infrastructure (OCI). By using OCI GenAI Agents, businesses can even customise their own agents to suit unique organisational needs.

Looking ahead, AI agents are expected to evolve further, assisting with talent reviews, automating supplier negotiations and even predicting supply chain disruptions.

This adaptability promises to give organisations a competitive edge by reducing errors, enhancing productivity and extracting greater value from enterprise data. 

Businesses expect their spending on AI to increase by 30% in 2024, compared with a 3.3% average increase in overall IT budgets, according to a BCG survey. More than 30% of the respondents BCG called “high-maturity” AI implementers expect no more than a 10% return on their investments over the next three years—with even more pessimistic prognoses at companies that have adopted less of the technology.

As Oracle continues to innovate, procurement professionals should watch closely. AI agents are not just a trend — they are a strategic investment for organisations aiming to thrive in a fast-paced, data-driven world.

Explore the latest edition of Procurement Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.

Discover all our upcoming events and secure your tickets today.

Procurement Magazine is a BizClik brand.