This AI Ecosystem Report, featuring supply chain and procurement expert Joanna Martinez, an Acceleration Economy practitioner analyst, contends that embracing AI not only addresses current challenges but also positions procurement as a leader in leveraging emerging technologies for organizational benefit.
Highlights
00:19 — Those in procurement know that our CFOs look to us year after year to reduce costs or at least offset inflation. We also know cost reduction rates are not sustainable over the long run. Because once we’ve lowered the bar, it gets reset to a lower number, and there’s less opportunity once you’ve extracted savings.
01:05 —The bottom line is that it’s harder to meet CFO expectations once that low-hanging fruit is gone. Another challenge is the metric called spend coverage. Additionally, there’s almost a third of spend taking place without procurement input. Cost reductions and spend coverage are challenges, but they may have the same solution: generative AI.
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02:03 — Just like when we take the direct cost of a widget from X to Y, using a GenAI tool to build RFPs and conduct supplier discovery is a logical first step to building a digital procurement process. It’s also a huge leap forward for the procurement and legal teams to be able to use evolving AI-based capabilities to help negotiate and optimize contracts.
03:10 — I recently saw a prediction that by 2027, 40% of sourcing events will be executed by non-procurement staff. That means there is a brilliant opportunity out there for procurement to become the creators, owners, and managers of an AI-based sourcing process.
04:18— My personal mantra is that it’s far better to be the disruptor than the disruptee. Everyone is looking at uses for AI in the business, but likely no one but you is going to find opportunity for AI in procurement. That’s your new frontier.
The AI Ecosystem Q1 2024 Report compiles the innovations, funding, and products highlighted in AI Ecosystem Reports from the first quarter of 2024. Download now for perspectives on the companies, investments, innovations, and solutions shaping the future of AI.
