Founders’ Circle - London - October 2023

Recap

We welcomed more than 40 corporates, B2B investors and digital solutions into one space, to share thoughts and ideas on the impact of digital throughout Procurement, and how GenAI is shaping the future of their businesses.

With a room full of Procurement experts and curious minds, Dr Elouise Epstein opened discussions with a key theme from her new book, How to hack your supply chain. She touched on how digital procurement continues to evolve, with GenAI rapidly transforming for many users, from entry level through to C-suite, personally and professionally.

“The greatest risk to our supply chain comes through third parties… We waste billions of dollars on systems that don’t solve tomorrow’s problems… We need to get better at exchanging info with third parties.” Dr Elouise Epstein, Partner at Kearney

Lance Younger brought to life current digital trends with examples from the ProcureTech100 and the analysis that is currently being conducted to identify the 2023 ProcureTech100.

Shakil Nathoo, Kearney, welcomed Lucas Smaira from DeepMind to the session. With years of experience working with Technology and AI, he delved into the current and future status of GenAI, as well as touching on AGI – artificial generative intelligence.  

What is happening in the GenAI space?

  • The market is huge (and growing)
  • Talent is still scarce
  • Compute is expensive
  • How do you find more useful data? How do you retain data privacy?
  • Open-source world
  • The first takes all? Theory of point of singularity and OpenAI bet

He also shared a GenAI market map, showing the GenAI tools across industries and categories, from image generation, to legal, audio and coding.

“The future of GenAI: It’s a web-like tech revolution.” Lucas Smaira, DeepMind

Martin Ward, Senior Digital Procurement Enablement Manager at Roche raised the topic of stochastic parrots, referring to how machine learning can create convincing language, but without necessarily understanding the meaning of the language it is processing. So, what does that mean for those using it in their business processes?

Chandar Lal, Principal at Mosaic Ventures, shared insights into the dynamics of the market, together with some of the challenges and opportunities which exist for digital procurement solutions over the next couple of years.

What did the attendees have to say about GenAI’s impact on Procurement?  

Michael Rooney, Principal at ProcureTech, led the interactive session, where he welcomed all to share their views on GenAI (anonymously).  

“I believe that significant value will be derived from models which provide deep Procurement skills and capabilities. These specialised models will start to develop quickly, as organisations adopt and modify open models (white box) then apply their specific business logic and data.” Michael Rooney, Principal at ProcureTech  

What are the biggest use cases for GenAI in Procurement?  

  • Analytical tasks  
  • Automating supplier customer exchanges - moving many Procurement and Sourcing activities from ‘events’ to ‘continuous’  
  • Category management  
  • Category strategies  
  • Contract drafting and review  
  • Contract generation and review  
  • Contract lifecycle management  
  • Data labelling
  • Document generation and market intelligence  
  • Drafting policies
  • Inputs to strategy and analysis, such as cost structure  
  • Knowledge management  
  • Market intelligence  
  • Negotiations  
  • Operations teams  
  • Price comparison, cross company analysis and vendor management
  • Product comparisons  
  • Putting together negotiation packages
  • RFP writing  
  • Scraping and pulling supplier data, without intervention from the client or supplier  
  • Summarising RfPs and contracts  
  • Supplier identification  
  • Supplier recommendation and benchmarking  
  • Supplier search  
  • Understanding messy qualitative data from suppliers (which has been traditionally handled through human interactions)
  • Writing and evaluating RFPs  

Based on the responses, it appears that GenAI has the power to transform approaches to handling contracts, suggesting this could both free up time and minimise mistakes caused by human error.  

What are the critical success factors for embedding GenAI in Procurement?

  • Having suitable, high quality data  
  • Removing any existing bias  
  • Clear ROI cases  
  • Determining the expectation when generating vs executing  
  • Common sense and good judgement  
  • Understanding when to use and when not  
  • Ensuring credibility
  • Using to support procurement professionals, rather than taking over  
  • Access to private instances with APIs enabled  
  • Critical thinking and analysis  
  • Human in the loop – to overcome the issues of false positives and inaccuracies
  • Data security, particularly when using customer data
  • Rules of engagement – when and how to use  
  • Realisation around accuracy and risk  
  • An informed procurement community, and educating users how to get the best outputs from GenAI  
  • Ease of use  
  • Starting with augmenting the individual  
  • Breaking down barriers between internal clients and procurement

A few more snippets from discussions on GenAI at the Founders’ Circle:

“Tools exist with active markers (i.e. seeking diversity, minority-owned, female-owned suppliers), but they need to do better.” Shakil Nathoo, Partner at Kearney
“People need upskilling… We shouldn’t be relying on email and Excel to do our jobs.” Dr Elouise Epstein, Partner at Kearney
“When GenAI is inaccurate, it is very inaccurate and the cost then outweighs the benefits. Enterprises need very high levels of accuracy.” Alan Holland, Founder & CEO at Keelvar
“Digital tools: Why are we using them? What benefit will GenAI bring for us and our customers? We need to assess the degree of impact.” Malin Schmidt, Founder & CEO at Kodiak Hub

Interested in the Procuretech Founders’ Circle? Follow ProcureTech and connect with us on LinkedIn.

There will be more collaborations and Procuretech Founders’ Circles across the US, UK and Europe.

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