The AI [R]Evolution in Procurement: Why Upskilling Your Team is The Key
Dear All,
As I wrote a few days ago on my LinkedIn, I'm starting up again and would like to share and discuss a lot more concrete things with you in the near future.
Today it will be less technical but with a strong focus on us and our teams. We are talking a lot about AI @Procurement as a technology, what huge potential it has, what enormous efficiency growth can be expected... BUT! AI itself will not do anything at all. We need to equip our teams with the right skills to get the most out of the new technology. So the question here is what skills and knowledge are needed to exploit the irrefutable potential of AI to the full.
If you and your team aren't adapting, you're not just falling behind—you're risking irrelevance.
Gone are the days when procurement was solely about negotiating contracts and managing suppliers. AI is able to automate a lot of routine tasks, freeing up procurement professionals for higher-level strategic work. But here's the catch: this new landscape requires a different skill set.
A 2023 Deloitte survey revealed that 64% of procurement leaders believe their teams lack the skills needed to thrive in the digital age. These aren't just technical skills—it's about understanding how to leverage AI, analyze data, and make strategic decisions based on insights.
The skills our procurement teams need are not just about being tech-focused; they're about applying that knowledge to solve real procurement challenges. Here are some of my thoughts:
Ability to generate, read and interpret data
Procurement professionals need to understand how to work with (AI-generated) reports and dashboards, interpreting the insights they provide. They should be able to ask the right questions of AI tools to uncover hidden patterns and trends.
Example: A procurement analyst uses AI-powered spend analytics to identify a category of goods where prices are rising faster than inflation. They then leverage this insight to negotiate better contracts with suppliers, saving the company millions.
Digital Strategy:
It's about understanding how different technologies (AI, blockchain…) can be applied to procurement and staying abreast of new developments.
Example: A procurement manager pilots an AI-powered chatbot to handle routine purchase requests, freeing up their team for more strategic work. The team then will always support the adoption of the chatbot across the organization.
Forget savings as the measure of success
AI allows procurement to contribute to broader business goals, such as sustainability or innovation. This requires a strategic mindset that aligns procurement decisions with overall company objectives.
Example: A procurement professional uses AI to identify suppliers with strong innovative and environmental credentials, helping the company to stay ahead of the competition.
Change Management
It's about helping teams adapt to new ways of working, addressing resistance to change, and fostering a culture of innovation.
Example: A procurement director leads a change management initiative to ensure smooth adoption of a new AI-powered system (e.g. doc automation, negotiations, PR and PO processing), providing training and support to help employees embrace the change.
Soft Skills: The Human Element in the AI Age
Communication, negotiation, collaboration, and problem-solving still remain crucial in the AI era. These skills are essential for building relationships with suppliers, managing complex projects, and driving innovation.
Example: A procurement manager uses their negotiation skills to secure favorable terms with a key supplier, leveraging insights from AI-powered data analysis to strengthen their position. Yes, there are already good negotiation bots. But it is up to us to set the limits beyond which we want to remain human to human.
Investing in your team's development isn't just nice-to-have; it's a survival strategy. Here are some - maybe even pretty generic - points what we should focus on:
Assess the Gap: Identify the specific skills your team needs to develop. It differs from company to company.
Create a Roadmap: Develop a structured plan for training and development, including both formal courses and on-the-job learning opportunities.
Continuous Learning: Encourage a culture of lifelong learning, where staying up-to-date with AI advancements is the norm. It is not a one-time exercise!
Partner with Experts and Peers: Consider bringing in external consultants or trainers to provide specialized expertise.
My conclusion:
The future of procurement happens now and here, and it's powered by AI. We as Procurement must not be left behind. Convincing top management to follow this path will help us secure the role of procurement for the future and underpin its strategic value.
Remember, the AI revolution isn't about replacing humans; it's about empowering them to reach their full potential.
How do you see this challenge?
Where do you see the biggest hurdles?
I completely agree with your point.
I believe that in the future, many user tasks will be managed on a single dashboard, and users will continuously prompt, enabling the entire workflow to run on such an AI product. This will be an even more interesting form of development, especially after the implementation of agents.