It’s hard to find an industry or line of business that hasn’t been transformed by artificial intelligence (AI). Whether it’s by automating routine processes, or extracting valuable insights from huge volumes of data, it’s had a major impact on how every part of modern organizations operate. And procurement is certainly no exception.
In the procurement department, AI has helped teams make a leap that’s been decades in the making — the shift from reactive to proactive decision-making.
By processing continuous streams of market and category data in real time, AI has finally made it possible for procurement teams to stay ahead of emerging trends and turn them into opportunities, instead of just reacting to them as they happen.
The impact of that shift can’t be understated. By accelerating the process of gathering and understanding category and market insights, AI isn’t just empowering procurement teams with greater intelligence at a faster speed. It’s completely transforming how the function operates, and freeing experts to dedicate their time to delivering new sources of value to the business.
From supporting strategic business initiatives like the shift to sustainability, to helping leaders understand the risks they’re exposed to, this subtle shift in how intelligence is gathered and delivered has enabled massive, far-reaching changes for procurement experts.
But while AI has dominated the headlines and been heralded for the evolutions it has enabled, it’s important to recognize that even those most sophisticated capabilities are still not a replacement for human intelligence — or “HI.”
AI + HI
Despite millions of us now having hands-on experience with AI-enabled tools, the misconception that it’s a replacement for human involvement in processes is still common.
While things like robotic process automation have undeniably reduced the need for some human roles, in analytics and intelligence delivery, AI can’t — or at least shouldn’t — be used in place of human experts. While AI models are getting very good at identifying patterns and surfacing hidden trends, they often still fall down when it comes to translating those insights into value-driving actions.
For that reason, instead of replacing humans, AI is at its best when it’s used to augment HI — enabling experts to act on insights faster, and use their skills to deliver strategic value in ways that only humans can.
The Right Balance
There may well come a day when AI capabilities are sophisticated enough to contextualize insights for themselves, and reliable enough to convert those insights directly into procurement decisions without any human intervention. But, from the perspective of most organizations, today is not that day.
Platforms, models, and technological capabilities aren’t enough to deliver the fast, proactive, high-value vision of a modern procurement organization that most companies want to achieve. If your plans for procurement empowerment begin and end with technology, there’s a strong chance that you won’t achieve everything you want.
HI must also be a major part of your strategy. Instead of seeking the most sophisticated technology, teams need to ask which tools are best for their people. In cases where the categories managed by procurement teams are highly stable and resilient to change, it may not be right to apply AI at all.
At the end of the day, the perfect balance of AI and HI will depend on the needs of your organization and your procurement teams. But it does need to be that: a balance.
Omer Abdullah is co-founder of The Smart Cube and leads the firm’s business across the Americas.
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