AI in Procurement - Why should you 'bank' all the benefits?
Almost daily we read press releases from organisations announcing how they intend using AI to change the way they do business for the benefit of themselves and their customers. We wait to see to what degree they succeed (or not), but it is becoming obvious that we are in the early days of a fundamental shift in the capability and use of AI technology in B2B sales. Our sector of expertise (sales enablement) is not immune to this, many of the sales professionals we talk to highlight how they are looking to gain competitive advantage by being at the forefront of this innovation.
Whilst it is interesting to see developments within the sales community, how much time have we spent considering how procurement teams will use the same technology and what impact that will have on the procurement process?
So what are the ‘challenges’ that procurement teams face and will look to solve through the adoption of AI tools? It could be argued that at the very highest level there are 2 key issues that AI can address;
· The buying process has historically been labour intensive, complex and time consuming. This is particularly the case where total order values are high, contracts are complex and for multiple goods/services from a range of suppliers. Procurement departments are deploying AI in greater numbers to drive time and cost efficiencies across this landscape.
· Write better content for all parties reducing the potential for expensive and time consuming change control or dispute resolution mediation resulting from work programmes that are not delivering the expected services or benefits.
These issues are common across business in general but perhaps more so in Public Sector procurement given the transparency and accountability required when spending public money.
How will AI help procurement teams?
At a high level AI, if used effectively, will help procurement teams rapidly analyse large sets of data, compare and rank RFP/ITT responses, create supplier risk profiles and optimise decision making. In the same way that bid teams might use AI to search content libraries, procurement teams could create supplier shortlists based on a range of publicly available data, create optimal bid scenarios, and generate RFP’s based on previous successful procurements and industry best practice.
In addition AI will quickly create draft contracts enabling the procurement team to make better decisions and get on the front foot in negotiations with suppliers. As a result AI could substantially accelerate procurement timescales saving time and cost.
So what are the implications for the bidding community? Significant and far reaching we would suggest, however there are a couple that spring immediately to mind and might serve as a good starting point to consider:
· The procurement process will accelerate and response timeframes reduce. Once buyers know you are using AI they will reset their expectations, any bidders unprepared for this will find the reduced response period very difficult. At best the quality of their submission might not be compelling, worse still, they might not have enough time to respond thereby having to qualify out of the opportunity resulting in a reduction in their sales pipeline.
· A comprehensive, high quality content library that AI tools can draw on and learn from could be the difference between winning and losing. Creating, and maintaining a world class response library is no easy task – how prepared are you?
If you would like to explore how PSP’s experience can help you navigate this technological revolution get in touch:
