Cost Optimisation Series:
How do AI and Technology interlock in a cost program?

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Transcript

Chris: We’re focusing a lot on cost optimization and the journey that people are going on, but we’re increasingly seeing growth in technology and AI. How does AI and technology interlock on a cost optimization program?

Palak: Gen AI, it’s everywhere, right? There’s just so many use cases where it’s being deployed across the procurement process.

We’ve got the negotiation bots, we’ve got tools like the supplier insights, tools that help with risk predictions, and there are so many others that are emerging as we speak right now.

But the one place where I see AI, or we see AI has made the most impact and continues to do so, is around tackling that messy data, which in turn is helping with data analytics and diagnosis.

Talking about tackling that messy data, in procurement, we know it’s always been one of those real key pain points.

That actually reminds me of this conversation I had with a Procurement leader a while back who said, “We’ve never suffered due to lack of data in procurement. Our problem has always been making sense of it all.”

That is spot on because in all my years in procurement, working across industries, sectors, and geographies, I’ve yet to come across a company that uses that single a unified data system. Because of this fragmented siloed information, it hinders that strategic decision making and true collaboration.

What AI is doing right now, it’s cutting through that noise. It’s essentially within a fraction of time, it’s collating, cleansing, categorizing and organizing all that data in a single source of truth.

Now everyone’s working off that same version of reality.

Chris: Having confidence in the analysis, in the numbers, which has as professionals, as practitioners, quite often in the past, we’ve not necessarily have.

That builds credibility, builds a credential, both with our internal stakeholders and the supply market. Without the technology enabling that journey, we’re really back in the Dark Ages. There’s a lot to be excited about in the space.

Palak: It’s opening, it’s freeing up space for people to actually focus on things, on decisions, on those high impact work that truly matters.

Chris: That’s a great point. Procurement is a people function. We can talk a lot about technology and process and the movement in AI, but at the end of the day we have to remember, procurement is an enabling function. It’s led by people for people in the business. Those hearts and minds are critical to what we enable and deliver.