AI in sustainable procurement

So... AI in procurement. Have you seen any posts of that lately? Definitely peak hype cycle these days. My view: think about it as a hammer 🔨 I shared my views on the topic at ProcureTech Founder's Circle.

It boils down to two things.

1️⃣ AI is a hammer. It’s really good at hammering nails, but you’ll get disappointed if you think it can replace your carpenter.

Okay, weird analogy, but because of the obvious potential for “general intelligence”, I’ve talked with many corporates and scale-ups that have been disappointed or skeptical about the potential to replace procurement in general. I think we should be careful of thinking of the technology as a solution in itself, and instead remember that it’s a tool that’s great at solving some tasks.

2️⃣ What excites me the most about this tool in the procurement context is its ability to interface with the very manual reality of procurement. Most procurement operations and supplier interactions today are not very digital - best practice is almost Excel.

I think generative AI in particular will accelerate the transition to digital because it allows us to at scale understand the messy reality of today’s procurement interactions.

As an example, at Responsibly, we’re using AI for a variety of applications centered around finding and analyzing unstructured supplier ESG data. Like a procurement professional would do manually today, we can, as an example, analyze a sustainability report with messy unstructured data like statements, visuals, varies KPIs etc. We can interpret supplier responses that would normally need human review. We can automatically verify audit documents or certificates. And so on.

I’d love to hear what you think is the biggest potential of AI in procurement?