Procurement professionals will need to learn new, advanced skills to stay relevant when low-level tasks become increasingly automated.
Early adopters who seize the opportunities of artificial intelligence (AI) are likely to generate real value for their company, but will they also risk half of their procurement team becoming obsolete?
Worse still, will their own role become redundant?
It’s a very reasonable fear given that many prominent futurists have predicted that tens of millions of skilled professional jobs will be eliminated as the AI revolution gathers pace. And even if the high-level roles remain, who will be tomorrow’s procurement leaders if junior roles are replaced by data-hungry algorithms?
Time to learn new skills
“The AI future means that low-value administrative roles will be an unnecessary expense and procurement professionals will have greater productivity,” says Claus Jepsen, chief architect at Unit4, an organisation that claims to have created the world’s first business digital assistant, called Wanda.
“Like other professions, procurement professionals need to realise this now and begin to forge their creative and people skills. Technology-wise, virtual digital assistants mean the days of learning how to navigate procurement screens and systems are gone.”
“Procurement professionals can simply interact with digital assistants using natural language: ‘What are my best options to buy one hundred laptops? What was the company’s spend on mobile phone contracts last year?’ It is as easy as that, and what a difference it makes to procurement productivity.”
But it may not actually be as simple as that, argues David Hamilton of Liverpool University’s computer science department. Dr Hamilton specialises in AI and machine learning and is working on a two-year knowledge transfer partnership with Inprova, a Warrington-based procurement services provider.
Reinforce, not replace
“The focus of AI is to reinforce the work of procurement functions and not to replace staff,” he says.
Dr Hamilton draws an analogy with healthcare, where AI can crunch thousands of data points to help doctors make quicker decisions: “These AI applications won’t replace doctors, but they provide accurate, relevant output from different sources to help them make informed decisions,” he says.
This suggests those able to ‘speak data’ in procurement – much like in other sectors – will flourish. Traditional leadership skills, including emotional intelligence, remain crucial, though. Leadership skills will also be in demand, especially as the procurement function undergoes upheaval.
Kasia Borowska, managing director of Brainpool, a worldwide network of AI and machine learning experts, says the skills mix needed to facilitate procurement is likely to change.
Extracting insights from data
“A lot of companies think that they need AI to bring procurement processes on to the next level, but really what they need is a good data engineer and a data analyst to extract insights from the data that’s available,” she says.
Even when AI is introduced, the systems need nurturing, Ms Borowska adds.
“Managing complex machine learning systems requires a lot of resources. In order to avoid becoming redundant, procurement professionals should make sure they keep up to date with the technology that’s being introduced into their company.”
To those procurement professionals worried about their future, Ms Borowska offers comfort in the form of a history lesson.
AI will empower procurement
“Similar concerns were being raised when the internet first came along, replacing letters with emails, fax with messenger, paper ads with digital marketing. But for those who adapted, the introduction of the internet created even more jobs, which were difficult to imagine back then,” she says.
Either way, it’s not time to panic just yet. Deloitte’s Global Chief Procurement Officer 2018 survey found that only two per cent of CPOs say they have ‘fully deployed AI or cognitive technology for use in procurement’. However, 66% of CPOs agree that ‘a key leadership trait of procurement leaders is leading digital and analytical transformation’.
Change is coming, and quickly, but an open-minded, progressive and agile attitude will reap rewards.
Lance Younger, a partner at Deloitte who is responsible for the UK sourcing and procurement practice, says: “Far from creating a hollowing-out or removal of levels, AI will empower procurement and create new roles for procurement to deliver value to the business.”