PROCUREMENT 01732 759725 27 magazine time savings, particularly with large document volumes and datasets, as crucial metadata and clauses can be reviewed and extracted in seconds. The incorporation of generative AI capabilities also facilitates contract summarisation, formulation of alternative clauses and risk analysis, thereby optimising and expediting both contract creation and approval workflows. e Dynamic risk management through Artificial Intelligence In the face of delivery shortages, production halts and revenue setbacks caused by supply chain disruptions, effective risk management is essential. A comprehensive supplier management tool powered by AI and ML can be a big help in this endeavour. For instance, by seamlessly integrating with risk management software solutions, it can automate the evaluation of supplier-related data such as performance metrics, quality standards and legal compliance, using AI algorithms. Leveraging end-to-end risk management software giving access to extensive datasets encompassing different categories and global regions ensures companies receive real-time alerts on supply chain disruptions at all levels, enabling rapid responses to crises such as rocket attacks in the Red Sea or the conflict in the Ukraine. r AI-powered sustainable procurement Beyond traditional metrics like supplier performance, quality, pricing and delivery timelines, adherence to Environmental, Social and Governance (ESG) standards is increasingly vital for businesses. How can companies effectively evaluate their supply chain and seamlessly integrate these criteria into new procurement bids? By interfacing with an AI-powered engine, users can unlock access to comprehensive supplier data, encompassing ESG performance metrics sourced and refined from diverse information channels through artificial intelligence and machine learning algorithms. This empowers them to select suppliers that align with their sustainability benchmarks. Moreover, by integrating an AI-driven Carbon Management solution, companies attain full visibility into the carbon footprint of their supply chains, offering a detailed breakdown of total CO2 emissions attributable to each supplier based on all transactions conducted. As intelligent technologies advance at break-neck pace, AI tools offer enormous potential for advancing process automation and increasing agility. Companies that update their procurement processes and leverage the benefits of targeted AI integration can look forward to significant efficiency advances, time and cost savings and improved competitiveness. The success with which they deploy and align AI technology with key business objectives and overall strategy will be what separates companies that are able to improve the efficiency of their workflows through hyper-automation and conversational and collaborative tools and those that continue to lag behind due to a lack of clear vision in implementing AI. The former will achieve new levels of quality in their procurement decision-making and clarity of analysis that can truly accelerate business outcomes. www.jaggaer.com GenAI adoption in procurement on the rise, but challenges remain Almost one quarter (24%) of UK businesses have deployed Generative AI tools in procurement and supplier management in the last 12 months, with a further 55% in the process of/considering deploying Gen AI. Only 19% have no plans to make use of GenAI in procurement. The study of 300 UK supply chain and procurement decision-makers by Ivalua, a provider of Cloud Spend Management solutions, reveals that organisations that have adopted Gen AI tools are using them for task automation (69%), internet research (67%), document analysis (59%) and content creation (48%). Overall GenAI users have seen a 44% reduction in manual processes across the procurement and supply chain function. Almost two thirds (61%) agree that harnessing Gen AI will be key to effective spend management, 54% believe it will improve efficiency and 36% say it will free up time to focus on strategic objectives. One third (35%) of procurement leaders are concerned their role will be replaced by Gen AI. Despite rising take-up of GenAI, Invalua warns that digital transformation in procurement has stalled in recent years, with the average number of procurement processes digitised almost unchanged since 2019 (48% vs 45%). This, it suggests, presents significant challenges when it comes to the deployment of GenAI, including: n Poor data quality: 22% of procurement leaders cite poor data quality as a challenge to adopting Gen AI in the procurement and supply chain function. n Lower technical skills among teams: 28% of procurement leaders say user resistance is a top challenge to adopting Gen AI. n Lack of guardrails and processes: 33% of procurement leaders are concerned teams are using Gen AI tools without their knowledge, with 68% agreeing that they need to put more guardrails in place to ensure the accuracy of Gen AI outputs. www.ivalua.com
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