AI & Blockchain: The Procurement Power Couple (?)
As I was immersed in AI topics regarding AI agents again today, I heard something about blockchain on TV with one ear. It wasn't the news that was important here, but blockchain itself.
Since the end of 2022, I have the feeling that only AI is on everyone's lips. But what about blockchain? And I'm not talking about cryptocurrencies, which is just one field of application for this technology.
I'm thinking much more about the use of both technologies in business and especially in procurement. The next question that quickly pops up is, can both technologies together improve procurement processes?
With a few very simple comparisons and thoughts, I wanted to stimulate a discussion that would show us all the possibilities hidden in this powerful combination. Perhaps you know providers or applications that combine these two technologies and already have experience with them. Would be very grateful for some info :)
Let's briefly go over the obvious strengths of both technologies in terms of procurement and then look at how they can work together. While they have distinct strengths, their combined potential to transform procurement processes could be impressive.
Top 5 AI Use Cases in Procurement
Spend Analytics: AI sifts through massive datasets, uncovering patterns, anomalies, and savings opportunities that humans might miss. This leads to better negotiation strategies and optimized spending.
Contract Lifecycle Management: AI automates drafting, review, and approval workflows, reducing errors and speeding up contract cycles. It also extracts key terms for easier analysis and compliance monitoring.
Supplier Risk Assessment: AI analyzes vast amounts of internal and external data (news, social media, financial records) to continuously assess supplier risk, alerting teams to potential disruptions before they happen.
Demand Forecasting: AI algorithms analyze historical data, market trends, and even external factors like weather patterns to predict demand fluctuations accurately. This optimizes inventory levels and prevents stockouts.
Chatbots & Virtual Assistants: AI-powered conversational interfaces streamline communication, answer queries, and guide users through procurement processes, improving efficiency and user satisfaction.
Top 5 Blockchain Use Cases in Procurement
Immutable Record Keeping: Blockchain's decentralized ledger creates tamper-proof records of transactions, ensuring the integrity of contracts, invoices, and other vital documents.
Supply Chain Traceability: Blockchain enables the tracking of goods and services throughout the supply chain, providing greater transparency, authenticity verification, and risk mitigation.
Smart Contracts: These self-executing contracts automatically trigger actions when predefined conditions are met, reducing the need for manual intervention and minimizing disputes.
Secure Supplier Onboarding: Blockchain can verify supplier credentials and performance history, streamlining onboarding and ensuring only trusted partners join the network.
Provenance Tracking: Blockchain allows consumers and businesses to verify the origin and authenticity of products, ensuring ethical sourcing and combating counterfeiting.
AI + Blockchain: The Procurement Power Play
Contracting: AI analyzes contracts for risks and opportunities, while blockchain ensures their immutability and enforces agreed-upon terms through smart contracts.
Negotiations (e.g., auctions): AI analyzes bidder behavior and market data to optimize negotiation strategies, while blockchain records bids transparently and prevents manipulation.
Vendor Master Data & Onboarding: AI validates vendor information and assesses risk profiles, while blockchain stores verified data securely and immutably, simplifying onboarding processes.
Can you think of any other use cases?
How do you see this connection for the procurement sector?
I don't have any answers today, just questions :)