November 09, 2021 | Procurement Software
Ask business leaders about their plan to mitigate risk and counter disruption and their answer is likely to be similar -- build resilience, deploy technology and bring on digital transformation.
Today, the general notion is that technology can bail businesses out of the current crisis and shield against potential disruptions.
Hardly surprising then that many business leaders are looking to deploy advanced technologies such as artificial intelligence to streamline critical functions such as procurement and supply chain.
The question now is: Should supply chain and procurement executives, many of whom have witnessed a series of disruptions since the onset of the pandemic, sideline sustainability and social goals and recklessly adopt AI across all their processes?
Or can they pursue and achieve these long-term goals with an AI-powered solution?
A framework for AI in procurement
There is a need for a framework that blends sustainability and social goals with the more immediate priorities to build business resilience and manage disruption.
Mudit Kumar, vice president - consulting at GEP, believes such a framework can be immensely helpful, given that many businesses today are not effectively using AI in procurement.
“Companies are in dire need of research-driven guidance and tools to create a holistic AI strategy, and to evaluate and future-proof their AI investments in procurement,” he says.
Clearly, enterprises must act responsibly and exercise some degree of caution. Even as they implement new technology, they cannot afford not to pay heed to long-term sustainability goals.
The World Economic Forum and GEP come together
GEP will leverage its expertise in procurement and supply chain solutions to lead the World Economic Forum’s AI task force. The objective of this task force is to prepare clear guidelines and tools to help businesses make the best use of technology.
In this collaboration, GEP will utilize the WEF’s experience and leadership in the public sector to describe the ethical use of AI in private sector procurement.
The guidelines, which are expected to be delivered in 2023, will help businesses evaluate AI technology solutions to source materials.
In addition, they will be better placed to select suppliers based on their adherence to sustainable and ethical practices. Tier 1 suppliers will, in turn, repeat this process and shortlist their suppliers based on these guidelines. This will drive sustainability across the entire supply chain.
Among other things, the guidance will also include a toolkit to holistically evaluate the suitability of AI technology. This toolkit will consider several factors including risk, equity and environmental impact along with business requirement.
The collaboration with GEP comes at a time when an increasing number of businesses are deploying AI-based solutions offered by third-party vendors, says Kay Firth-Butterfield, head of AI and machine learning at the World Economic Forum. “The goal of this exciting new collaboration is to support companies in ensuring that they do so not just effectively, but also responsibly,” she says.
Such guidance will reinstate the duty of enterprises to abide by ethical principles. They will also be better placed to optimize costs and gain competitive advantage.