The future of Generative AI capabilites in S2P strategies

Generative AI - dubbed ‘the next disruptor for S2P’ by Deloitte - will transform future of sourcing and procurement operations

Making waves in sourcing and procurement, Generative AI is helping organisations to boost efficiencies, unlock value, generate new digital capabilities, and revolutionise the source-to-pay (S2P) processes. 

What is Generative AI?

A type of artificial intelligence (AI) technology, Generative AI (Gen AI) can produce various types of content including text, images, audio, video and synthetic data. The recent hype has been driven by the simplicities of its capabilities coupled with its quality output at speed. 

Emerging innovations such as ChatGPT have made the technology much more accessible and adaptable in different applications including procurement. Deloitte highlights Walmart’s recent pilot of an AI-based tool known as ‘Pactum’ for autonomous negotiations with suppliers. 

“While Walmart finds it helpful for landing a good bargain, three out of four suppliers prefer negotiating with AI over a human. This strongly indicates that the ecosystem is ready to embrace this disruption,” explained a Deloitte spokesperson. 

Sourcing and procurement

Sourcing and procurement landscape

While sourcing and procurement have been known to be at the forefront of technological disruption, the function continues to grapple with the challenges of efficiency optimisation, risk management, and cost management. 

According to Deloitte’s 2023 Global Chief Procurement Officer (CPO) Survey, procurement leaders have been driving their focus towards improving operational efficiency by utilising hybrid operation models, automation, and centralised processes to gain more control, increase visibility, enforce policy, and reduce process errors.

CPOs are also adopting an agile strategy when it comes to talent development to avoid a one-size-fits-all approach and develop personalised skill development programs.

Deloitte’s survey also indicated that 70% of CPOs are seeing a rise in disruption over the last 12 months, as such risk evaluation tools are needed to monitor external risk factors and perform advanced analytics for predictive and preventative measures. 

However, at the top of the list, CPOs are reporting high inflation pressures as the number one risk putting additional pressures on procurement organisations. 

Generative AI’s value in sourcing and procurement

“To address the above challenges, CPOs have continually invested in enhancing digital capabilities. Digital transformation remains the no. 3 priority over the next 12 months, with 80% of CPOs reporting it as their organization’s top priority,” explained a Deloitte spokesperson. 

Applications of Generative AI in sourcing and procurement

In particular, Gen AI holds great potential for the S2P function, particularly in proactive risk management, process automation, and decision-making. “In an increasingly uncertain world, instant access to accurate information is vital for mitigating and managing risk and empowering organisations,” said a Deloitte spokesperson. 

As such Gen AI can help to automate the ‘create’ processes in S2P such as documentation and transactions. It can also help when it comes to compliance, strategy development, textual data analysis, and predictive modelling. 

Real-world use case of Gen AI in S2P

******
For more insights into the world of supply chain read the latest edition of Supply Chain Digital and be sure to follow us on LinkedIn & Twitter. Other magazines that may be of interest: Procurement MagazineManufacturing Digital
******
BizClik is a global provider of B2B digital media platforms that cover executive communities for CEOs, CFOs, CMOs, and leaders in sustainability, procurement, supply chain, technology & AI, cyber and FinTech. It also covers industries such as manufacturing, energy and EV. BizClik is based in London, Dubai & New York. It offers content creation, advertising and sponsorship solutions, webinars & events.

Share

Featured Articles

Mars Snacking's Amanda Davies on Sustainability at P&SC LIVE

Amanda Davies, Chief R&D, Procurement and Sustainability Officer at Mars Snacking, discusses sustainable futures

DP World: Delivering the ICC Men’s T20 Cricket World Cup

Logistics giant DP World is among the companies playing a key role in the delivery of the ICC Men’s T20 Cricket World Cup hosted by the USA and West Indies

FuturMaster: Unlocking Untapped Potential in Supply Networks

FuturMaster, a pioneer in supply chain planning solutions, has launched the Network Insight Graph in a bid to unlock untapped potential in supply networks

Why you Should Automate your Supply Chain Analytics

Digital Supply Chain

P&SC LIVE New York welcomes Amanda Davies, Mars Snacking

Sustainability

P&SC LIVE New York welcomes Kirsten Loegering, ServiceNow

Operations