Given the inevitability of emerging technologies transforming businesses, how can you prepare your company for AI’s impact on procurement? Sami Peltonen, Vice President of Purchase-to-Pay Product Management for Basware North America, takes a look at how procurement departments can mitigate employees’ fears.
Artificial intelligence (AI) has begun to infiltrate all areas of businesses – and procurement is no exception. In fact, studies show that 88% of business leaders believe automation will significantly affect the procurement space within five years.
The biggest projected affect that advancements in AI technology will have on procurement is an increase in the number of activities that can be automated within this space. It is expected that 60% of source-to-pay processes can be fully or largely automated using emerging technologies, including AI.
The promise of AI technology and automation in the procurement space is exciting – it offers opportunities for increased efficiencies, greater visibility, fraud prevention, cost savings and more. However, it also induces a level of fear and uncertainty around how it will change the role of procurement professionals.
Given the inevitability of emerging technologies transforming businesses, how can you prepare your company for AI’s impact on procurement?
1. Distinguish ‘tasks’ from ‘roles’
When AI and automation enter conversations about how work can be transformed, they bring with them a sense of fear and unease. It is only natural that people begin to ask themselves: will there still be a need for manual and human skill? Will my role be replaced by a machine? Will I soon be out of a job?
Easing these concerns will require focusing on exactly what will change. AI, as the building block for automation, fundamentally affects how tasks are performed. That is why companies should emphasise automation’s potential to affect tasks within procurement, rather than looking at how roles themselves will change.
It is hard to say which roles – if any – will be eliminated over time owing to automation. However, it is safe to say that every role will likely still exist in some capacity, but that certain tasks within each role will be automated, thus redefining existing roles and opening the door for employees to focus on higher priority responsibilities.
Rather than allowing employees to become fearful, help them prepare for change by empowering them to understand which tasks and activities in their roles are likely to be touched by automation. For example, the majority of tasks within the vendor selection and negotiation process can and will be automated, meaning that that role will shift to incorporate other tasks that could not have been part of the role before, given the volume of manual vendor selection tasks.
Moreover, identify the skills that will be required for employees to excel in their shifting roles – such as data analytics and collaboration skills – and invest in training employees on those skills. This will ensure that employees can work effectively with AI and automation technology, and ultimately feel prepared for the inevitable shift.
2. Stress the importance of human critical thinking
Another way to prepare your company and its procurement professionals for AI and automation is to turn the definition of AI upside down, taking negative assumptions about how this technology affects professional roles and asserting a more positive interpretation and understanding of this change. Instead, business leaders should discuss how AI will be used to augment their own intelligence.
While employees may wonder whether they will be replaced by AI and automation, it is important to stress to them that people will continue to play a critical role in whether these technologies can even be successful. For instance, while AI can make recommendations around business decisions and procurement processes, it is not AI that is responsible for executing these recommendations – people are.
To help employees overcome fears around AI and learn to better work with this technology, companies must place an emphasis on the importance of critical and systemic thinking. By teaching people how to recognise biases and heuristics in their own decision-making, employees will be well-positioned to critically review AI’s suggestions, and connect information from the real world to make optimal judgements.
AI will not replace managers – but managers that use AI will replace those who don’t.
3. Go beyond the business case
The business case for automating procurement with AI is already there – that’s why 51% of today’s accounts-payable organisations are already prioritising the link between procurement processes and associated automated systems. What’s important now is getting your employees to buy-in and fully embrace AI to ensure successful implementation of and execution with this technology.
While initial reactions may be full of fear and scepticism, business leaders must remember to communicate with employees empathetically, helping them understand anticipated changes, investing in preparing them for these changes, and re-positioning the effects of this technology more positively so that it becomes something employees can get excited about.
By getting procurement professionals ready for the effects of AI, business leaders can empower them to do their jobs better and grow with the company as it undergoes this inevitable transformation, all the while setting their business up to reap the benefits of AI and automation.
