The Globality Blog

I often get asked where I see things heading, so I wanted to share a few insights based on our experience so far at Globality, building the market-leading AI-driven sourcing platform.

If you are in procurement and wondering what the combination of Procurement + AI will mean for you in the months and years ahead, these five insights will help you navigate the transformation and drive better business outcomes. 

Introduce AI as a partner and an extension of your team. When introducing AI to your procurement organization, show empathy; let your employees know they will get the credit for becoming 10x more capable using AI, while decision-makers and economic buyers who brought AI into the organization benefit from its financial gains.

2. AI Will Evolve Faster Than You Can Imagine; Embrace It
AI is becoming smarter and more accurate at a rapid pace, approaching human-level intelligence in many tasks and already exceeding it in some. Next-generation large language models are reaching PhD-level intelligence, and the intelligence displayed by each generation of models is accelerating. Fueled by the leaps in computing power, especially GPUs, that drive AI performance, AI is advancing beyond the pace predicted by Moore's Law. Rather than fearing these advances, teams who embrace it to enhance their work will gain vital competitive advantage.

3. Agentic Architectures Are Here
AI agents are evolving from simple chatbots to proactive, predictive, and collaborative partners. Agents like Glo don't just converse with users—they act on their behalf. This transition from conversation to action will redefine procurement, making it faster and more efficient, with AI autonomously handling repetitive, manual tasks, enabling procurement teams to focus on higher-value, more strategic work such as building supplier relationships and scenario-planning.

4. Multimodal AI Capabilities Expand Options
As AI models become multimodal, they are able to understand, process, and interact with diverse data types, including text, images, audio, and video. Don’t think only text—think rich media, images, presentations, and far better formats to consume information or present it. Procurement will be able to use AI agents such as Glo to create more accurate scoping briefs from diverse sources such as video calls, meetings, presentations and simple discussions with business stakeholders or colleagues.

Seize the Moment and Embrace AI in Procurement
AI is here, it’s smarter than we can imagine, and it’s going to become exponentially smarter as it shifts from providing insights to taking actions autonomously. As the models themselves become commoditized, success will require an AI-native product that brings specialized knowledge to assist and enhance your team’s work Don’t just add AI to an old application; push the boundaries of what AI can do for your organization. If you are an economic buyer or leader, you will see enormous financial returns by boldly making the leap to showcase how AI can increase efficiencies and productivity across your procurement team. If you are a user, let AI boost your capabilities, accelerate your career, and make you a standout 10x performer. Procurement has a unique opportunity—it is the perfect use case for AI given the different types of work and collaboration across the business involved.

Go win it!

Globality empowers many of the world’s leading companies to optimize their strategic sourcing across all categories. We have done so with a laser-focused emphasis on building a complete sourcing platform with unprecedented levels of usability and intelligence. At the forefront of that experience is Glo, an AI procurement assistant who quickly becomes a trusted team member for procurement professionals and a knowledgeable, respected ally for the finance organization.

We work with customers trying to solve hard problems yet deliver intuitive and easy to use solutions. Sometimes it’s hard to prioritize the feedback and priorities. Not this time. In working with our customers and listening to their feedback, it was clear that the Summer 2024 release would focus on two key areas.

First, companies want to manage more spend in our product so they can experience the benefits we offer across more of their portfolio. They want a single system for all sourcing, whether it be complex strategic projects or simple, yet transactional, tail spend. They want less tactical unmanaged buying and more competitive sourcing to increase transparency and reduce costs.

Second, customers communicated a need to ensure company compliance policies, rules and processes are observed regardless of whether sourcing was driven by the procurement team or business stakeholders. Companies wanted to ensure that for each project the journey was personalized and optimized. For complex projects, they wanted comprehensive scope capture and requirements. For simple projects, they wanted quick and efficient scoping and quoting. Furthermore, they told us that the personalization of these project journeys is not only different for each company, but also varies by category even within a single company.

To start, we introduced a brand-new Line Items feature. Line Items allows users to specify itemized details as part of their project to more accurately capture their intent. Line items can be either physical goods or services, and users can specify quantity and unit of measure. In addition, we significantly enhanced our pricing functionality to be infinitely more robust and flexible. Users can now opt to get itemized pricing, total price or even request a rate card. They can opt for providers to input pricing directly into a pricing table in the application, which can easily be viewed and compared across proposals, or for complex pricing in an external Excel-based pricing template. As always, users can leverage Globality’s library of best-in-class Smart Pricing Templates in order to make informed decisions and ultimately reach savings goals. So, whether it’s a complex RFP, a simple RFQ or requesting a services rate card, Globality easily captures all the suppliers’ prices. And, because we know it’s important to ensure providers can submit proposals quickly, we also enhanced and simplified the supplier experience when submitting their proposals.

Next, we launched Project Workflow to help our customers enforce their own rules and processes for each sourcing event. This new capability complements the existing proposal section library, matching rules and approvals capabilities that allow users to specify and enforce their company policies. Globality administrators can configure which modules in the Project Brief (scope, line items, proposal requirements, pricing requirements) are mandatory, optional, or not applicable. This configuration can be based on any number of parameters such as category, budget, project type and more. As a result, each project now has the optimal level of detail while requiring minimal effort by users.

Lastly, Globality has extended its market-leading AI capabilities delivered through Glo, our powerful procurement AI assistant. With Next-Gen Scoping, Glo understands all the content and context a user provides about a project, including any uploaded files. For each project Glo builds a customized set of scoping questions leveraging both Globality’s proprietary database of project and service offering-specific content, as well as the broader content from Generative AI’s LLM (Large Language Model). The quantity of questions generated is based on the project type, ensuring that for simple projects like RFQs, users have a shorter scoping experience than for more involved projects, like RFPs. Glo automatically answers questions based on the content that the user provides to deliver detailed, comprehensive and relevant responses. For the subset of questions that Glo does not have sufficient detail to answer, Glo will present those questions to users as well as context or tips on what to take into account, enabling users to quickly and knowledgably complete the scoping process. Users can also end scoping at any time or request that Glo asks additional scoping questions.

With these new, enhanced capabilities, our global enterprise customers now only require a single sourcing platform for all their multi-billion company spend. Both sourcing teams and business users can efficiently manage tail spend, personalize project journeys and leverage advanced AI capabilities to save time and improve all outcomes. We thank all our customers for their feedback and passion to innovate with us, driving savings and new efficiencies across their procurement function using Globality.

The office of the CFO has traditionally had six functions, or areas of business, that together form the work and tasks of the finance team. Each area has built up an accompanying technology stack with increasing levels of automation being injected into processes as finance leaders strive for new efficiencies and cost reductions while increasing governance and control to improve risk management.

Across each function, new software from innovative vendors has become popular with CFOs as they’ve seized on the imperative to automate repetitive, low-value tasks and free up their teams to focus on more strategic work that creates opportunities for enterprise investment and growth.

• Procure to Pay systems such as SAP, Coupa and GEP have established themselves as an integral part of the CFO office, automating the purchasing lifecycle – from requisitions and POs to receiving goods and payment. 
• Order to Cash has seen the advent of autonomous receivables through technology pioneered by the likes of Sage, Oracle and Esker.
• Treasury has automated both cash forecasting and cash management with software such as Kyriba.
• Record to Report has successfully implemented autonomous accounting with tools like High Radius and BlackLine.
• FP&A uses planning tools like Anaplan to transform a company’s financial decision-making with connected planning and insights.
• Tax software such as Vertex automates and digitizes processes from exemption certificate management to B2B validation to invoicing.

But what many CFOs don’t realize is that there is now, in fact, a seventh area of business within their office and that this function offers the biggest and quickest opportunity to deliver improved productivity and increased efficiencies through the use of AI-driven automation – the chance to pick the lowest-hanging fruit and demonstrate immediate ROI on investment in new technology.

Spend management refers to every dollar a company pays out for goods and services but is often overlooked and hidden away in a dark corner of procurement. Effective spend management helps to ensure that every expenditure is necessary, strategic, and provides value to the company. It also involves analyzing spending patterns, identifying inefficiencies, and making adjustments to improve financial performance.

If a CFO brings more of their company’s spend under management, instead of allowing the business to bypass procurement with ‘rogue’ or ‘maverick’ spend then not only will they see 10-20% cost savings due to increased supplier competition, but cycle times will reduce by up to 90% as slow manual processes are automated.

Using automated spend management technology such as Globality, global enterprise companies can reduce the RFX process from 3-6 months to 27-35 days on average. This dramatic increase in speed and efficiency comes at all stages of the purchasing journey.

With AI-driven autonomous sourcing, the business user can still lead the process and include their preferred suppliers. However, within rules and guardrails set in place by procurement that will enhance competition and improve compliance and risk management by ensuring all purchases adhere to company policies.

Reducing the sourcing cycle from 3-6 months to 27-35 days

Engagement Initiation (Was 1 week, Now 1 day)

• Business User (BU) raises requestion for RFx
• Schedule kick off call with BU (to discuss process)

Supplier Information & Requirement Gathering (Was 2-6 weeks, Now 2-3 days)

• Buyer sends NDA to new suppliers
• Buyer/BU partner get RFX documents together
• Buyer/BU agree timeline

RFx quotation phase (Was 2-4 weeks, Now 8-10 days)

• Buyer issues RFx email to selected suppliers which will include timeline & related documents

Quote Evaluation (Was 2-4 weeks, Now 2-3 days)

• Buyer receives quotes back
• BU/Buyer evaluate quote

Presentation (Was 2-4 weeks, Now 5-8 days)

• Shortlist selected supplier to present to BU
• Buyer starts negotiation conversations before and after presentation
• Buyer/BU select supplier

Contracting Stage (Was 1-6 months, Now 3-5 days)

• Contracting process begins

RFx Close Out (Was 1-2 weeks, Now 1-2 days)

• Buyer informs unselected suppliers

In many cases, G2000 companies are enjoying even greater efficiencies than those listed above. Iconic UK-based telecoms provider BT reduced its cycle time to market from seven to ten days down to just one day and reported this substantial efficiency gain in its 2024 Annual Report.

These figures were based on more than 1000 projects sourced on Globality’s AI-driven platform across nearly £8bn of spend so represent substantial new value to the business.

“We are now using generative AI so that our teams just have to type one sentence and the generative AI will help them along to do everything all the way to engaging with suppliers. It has super simplified the whole process,” says Cyril Pourrat, BT’s Chief Procurement Officer.

In addition to those speed to market improvements, BT has enjoyed double-digit savings across that spend as users collaborated with colleagues and suppliers and significantly reduce costs through increased competition, data-driven insights, and intelligent analysis.

Similarly, one of the world’s most recognizable sporting goods brands has adopted autonomous sourcing and its business users now self-serve for all events up to $3m with no involvement from procurement whatsoever. That has freed up 30 people from its Business Process Outsourcing office to work on other, higher-value projects – huge value to the company.

In an era where every dollar counts, especially in the face of economic uncertainties, managing spend more effectively can unlock significant value for a company, directly impacting its bottom line and bridging the gap between finance, procurement, and overall corporate strategy.

Adding spend management as the seventh function of the CFO office is not just a necessity; it’s an opportunity for CFOs to drive greater value for their organizations. The scope of their responsibilities has expanded beyond traditional financial management and CFOs are now strategic partners in business decision-making, playing a crucial role in driving growth and innovation.

Click here to book a demo of our award-winning AI-driven spend management platform.

I often get asked where I see things heading, so I wanted to share a few insights based on our experience so far at Globality, building the market-leading AI-driven sourcing platform.

If you are in procurement and wondering what the combination of Procurement + AI will mean for you in the months and years ahead, these five insights will help you navigate the transformation and drive better business outcomes. 

Introduce AI as a partner and an extension of your team. When introducing AI to your procurement organization, show empathy; let your employees know they will get the credit for becoming 10x more capable using AI, while decision-makers and economic buyers who brought AI into the organization benefit from its financial gains.

2. AI Will Evolve Faster Than You Can Imagine; Embrace It
AI is becoming smarter and more accurate at a rapid pace, approaching human-level intelligence in many tasks and already exceeding it in some. Next-generation large language models are reaching PhD-level intelligence, and the intelligence displayed by each generation of models is accelerating. Fueled by the leaps in computing power, especially GPUs, that drive AI performance, AI is advancing beyond the pace predicted by Moore's Law. Rather than fearing these advances, teams who embrace it to enhance their work will gain vital competitive advantage.

3. Agentic Architectures Are Here
AI agents are evolving from simple chatbots to proactive, predictive, and collaborative partners. Agents like Glo don't just converse with users—they act on their behalf. This transition from conversation to action will redefine procurement, making it faster and more efficient, with AI autonomously handling repetitive, manual tasks, enabling procurement teams to focus on higher-value, more strategic work such as building supplier relationships and scenario-planning.

4. Multimodal AI Capabilities Expand Options
As AI models become multimodal, they are able to understand, process, and interact with diverse data types, including text, images, audio, and video. Don’t think only text—think rich media, images, presentations, and far better formats to consume information or present it. Procurement will be able to use AI agents such as Glo to create more accurate scoping briefs from diverse sources such as video calls, meetings, presentations and simple discussions with business stakeholders or colleagues.

Seize the Moment and Embrace AI in Procurement
AI is here, it’s smarter than we can imagine, and it’s going to become exponentially smarter as it shifts from providing insights to taking actions autonomously. As the models themselves become commoditized, success will require an AI-native product that brings specialized knowledge to assist and enhance your team’s work Don’t just add AI to an old application; push the boundaries of what AI can do for your organization. If you are an economic buyer or leader, you will see enormous financial returns by boldly making the leap to showcase how AI can increase efficiencies and productivity across your procurement team. If you are a user, let AI boost your capabilities, accelerate your career, and make you a standout 10x performer. Procurement has a unique opportunity—it is the perfect use case for AI given the different types of work and collaboration across the business involved.

Go win it!

Every business unit is looking for ways to adopt AI-driven technology to increase productivity and efficiencies while reducing costs and procurement is no exception.

The Gartner Quick Answer: How to Prepare for AI in Procurement highlights the four key steps that CPOs and other sourcing leaders should take to embrace and adopt AI, enabling procurement to move from back-office function to a strategic growth driver and become a leader across the enterprise.

1. Secure Leadership Support and Resources
   One of the first steps in preparing for AI in procurement is to secure strong leadership support and the required resources. This involves:

• Educating Executives: Informing key stakeholders about the potential use cases and benefits of AI in procurement builds buy-in. Highlighting how AI drives cost savings, reduces supplier risks, and improves working capital creates a compelling narrative.
• Aligning with Organizational Goals: Ensure that AI initiatives are aligned with the organization’s broader AI strategy and roadmap. Prioritize tasks that demonstrate clear ROI.
• Securing Budget: Build a core team that includes cross-functional and technical members led by an AI champion.
  
  

2. Map Processes and Identify Opportunities

To maximize the benefits of AI, companies need to comprehensively map their procurement processes and identify areas where AI can have the most impact:

• Process Mapping: Conduct a thorough mapping of outdated, manual procurement processes to identify repetitive pain points, bottlenecks, and data-intensive tasks that consume significant time and resources.
• Benchmarking KPIs: Establish benchmarks for key performance indicators (KPIs) such as cost reductions, cycle times, and compliance failure rates before AI implementation.
• Prioritizing Use Cases: Create a prioritized list of high-potential AI use cases for procurement, such as SOW creation, spend analytics, supplier discovery, contract lifecycle management, and risk analysis.

3. Enhance Data Infrastructure and Quality

Quality data is the backbone of successful AI implementation. Companies need to enhance their data infrastructure and ensure the integrity and accessibility of their data:

• Data Inventory: Take stock of existing supplier master data, contract databases, and pricing data, evaluating their completeness and accuracy. This includes data from ERP systems, CRMs, supplier databases, and other repositories.
• Data Governance: Develop or adopt a schema for data cleansing, enrichment, labeling, and categorizing. Establish a robust data governance framework with specific access controls, security protocols, and compliance measures.
• Data Quality Assurance: Implement processes to ensure the reliability of data used for training AI models. This includes regular audits and updates to maintain high data quality.

4. Select Suitable Solutions

Choosing the right AI technology solutions is crucial for effective AI adoption in procurement:

• Vendor Evaluation: Assess AI vendors and technologies that cater specifically to procurement needs, considering security protocols, integration capabilities, total cost of ownership, and vendor reputation.
• Solution Analysis: Analyze shortlisted AI solutions for their functionalities, compatibility with existing systems, and user reviews.

Click here to download the full Gartner Quick Answer: How to Prepare for AI in Procurement

And contact us for a demo of Globality’s autonomous sourcing platform – winner of Best Technology Provider at the World Procurement Awards – to see how it uses cutting-edge AI, built from the ground up, to deliver 70% efficiencies and 10-20% cost savings instantly.

Gartner, Quick Answer: How to Prepare for AI in Procurement 17 April 2024, By Naveen Mahendra
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

The integration of Artificial Intelligence into the workplace is a topic of widespread discussion, particularly in the realm of autonomous operations. I have been building AI products since 2007 starting with VideoSurf, a company I founded to develop computer vision and audio recognition. My AI focus continued at Microsoft, when they acquired VideoSurf, and it continued through to my biggest, most ambitious company, Globality.

I believe that AI is akin to an avocado— not ready, not ready, not ready, then overnight it's so ripe that if you don't consume it now, it will be too late. Kidding aside, AI took years to develop into an “overnight” success. Those who do not act now risk falling behind competitors and missing out on critical efficiencies and innovations. Individuals who are hesitant to adopt AI will face negative consequences in their careers. On the other hand, those who advocate for and embrace AI will be promoted to become the next leaders in their domains.

As companies navigate the vast opportunities presented by exponential technological advancements, deciding which AI projects to prioritize becomes a significant challenge. Not every initiative will prove effective, and some, while functional, may not significantly impact the bottom line. These factors should guide the selection of AI projects:

1. Evaluating the applicability of AI to the department or area of your company that you lead.
2. ROI: Assessing the impact, i.e., determining whether it moves the needle.
3. Considering the need for disruption and the opportunities for improvement compared to the status quo.

These are the three parameters that any executive should evaluate now to determine where to start. Let’s delve into the details to understand the applicability of AI to a specific function. 

Understanding the applicability of AI

AI holds immense potential to significantly enhance and streamline operations across departments, including marketing, engineering, customer service, and more. The key to unlocking this potential lies in identifying the defining characteristics of top talent within these functions and envisioning how AI can embody similar attributes to better support their work. Given the unique circumstances of each company, the objective may be to enhance their effectiveness, do more with less, or over time, reduce headcount.

While navigating this sensitive topic, it's prudent to develop a forward-thinking perspective on what job descriptions for talent might entail in an AI-driven era. For example, in procurement, key elements could include high emotional intelligence, a strong business background, understanding business context as much as the business does, excellent communication and collaboration skills to navigate complex value chains, and other strategic skills that machines cannot replicate.  

However, in procurement today typical professionals are process-oriented, with  negotiation skills and a comprehensive understanding of policy enforcement. They excel in financial analysis, document drafting, requirement gathering, stakeholder interaction, and prioritizing various tasks. Their ability to manage time effectively, report clearly, escalate proactively, and forecast accurately makes them invaluable.

Let's explore the characteristics of AI and how they can be leveraged to support the human talents outlined above:

1. Interview and collect requirements: AI agents can automate the initial stages of procurement by interviewing stakeholders and gathering requirements with precision and intelligence. This ensures a clear understanding of needs from the outset. Recent advancements in LLM technology enable a truly humanized, machine-led interview process that is dynamic and personalized. Modern LLMs have achieved a much higher level of natural language processing capability. They can understand context better and generate coherent, contextually appropriate responses. LLMs combine linguistic prowess, contextual awareness, and adaptability to revolutionize requirements gathering. Their human-like interactions foster collaboration, reduce ambiguity, and set the stage for successful procurement processes.
   
   
2. Exceptional writing and articulation: AI's ability to generate detailed project scopes, proposals, and reports ensures that all procurement activities are well-documented and articulated, facilitating clear communication across departments and in between buyer and seller. This aligns perfectly with the extensive narrative requirements of buying and sourcing, showcasing LLM's potential to streamline complex language-based tasks. LLMs generate content swiftly and efficiently. They do not suffer from fatigue or variations in writing quality. They comprehend industry specific jargon, allowing them to communicate to experts and laypersons alike. Even language is not a barrier, allowing easy communication across cultures and borders. 
   
   
3. Triage and logic understanding: AI can classify and direct sourcing events to the appropriate processes through logical analysis, ensuring efficiency and compliance with organizational protocols. The combination of LLM's understanding of user intent, alongside the configuration of companies' rules and policies, plus the machine learning aspect of selecting the most logical path, enables AI to guide users towards the optimal journey. With recent models having increasingly long context windows, LLMs can logically analyze complex sourcing events and route them appropriately. Like a procurement professional, LLMs can dynamically adjust their triage decisions based on urgency, resource availability, stakeholder priorities, historical data, and user preferences. Retrieval Augmented Generation (RAG) allows LLMs to access procurement-specific information to help with these decisions.
   
   
4. Process journey implementation and guardrail enforcement: Through automation and AI-driven workflows, procurement processes are streamlined, and compliance with policies is enforced, reducing human error and enhancing efficiency. LLMs can be trained on organizational policies, legal guidelines, and compliance requirements. When integrated into procurement workflows, they ensure that every step adheres to established rules. By automating routine tasks, LLMs significantly reduce the risk of human error. They consistently apply policies, cross-check data, and flag any deviations, leading to more accurate and compliant processes. They can adapt to changing policies or process modifications, learning from new examples, and adjusting their behavior accordingly. 
   
   
5. Marketplace dynamics and negotiation: AI technologies can introduce competition in terms of cost and quality, analyze proposal trends, and conduct negotiations to secure the best prices, contributing to significant cost savings for the organization. Recent research has shown that LLMs can consistently reach successful deals in negotiation scenarios. 
   
   
6. Collaboration across business units: AI facilitates seamless collaboration and orchestration among procurement, finance, legal, and other business units, ensuring that all stakeholders are aligned and informed. An AI agent interacts and converses with all parties to ensure speed and precision. LLMs do not have the biases and incentives that individuals have, ensuring they work for the best outcome for all involved.
   
   
7. Proposal analysis and decision-making: AI excels in analyzing proposals by swiftly processing vast amounts of data, identifying patterns, and extracting insights that might be overlooked by human analysts. Moreover, AI can efficiently run models and scenarios regarding proposals, providing rapid simulations and predictive analytics to assess various outcomes. Essentially, AI functions as a virtual analyst, capable of handling complex tasks with speed and precision, thus augmenting decision-making processes and optimizing resource allocation.

The ideal place to start? 

Beginning the AI journey with procurement is a strategic choice that promises not only immediate benefits in terms of cost savings and operational efficiency but also sets the stage for a holistic transformation across the organization. It's a testament to the potential of AI to act as a catalyst for innovation, pushing the boundaries of what's possible and paving the way for a future where intelligent automation enhances every aspect of business operations. 

Globality can help you use AI to deliver immediate new productivity and efficiencies across your company spend while cutting costs by 20% from day one. Click here to request a demo.

When you think of procurement, the first association is not necessarily ‘cool’. But here’s a radical thought: AI is making procurement one of the coolest functions in the enterprise! I previously led an AI development team at Microsoft’s Xbox, so I know what cool tech is, and I passionately believe that procurement + AI is not only cool, it is, in fact, glamorous and the cutting-edge of every global corporation.

First, we need to agree with the premise that ‘cool’ is a function of creativity, innovation, impact, personal brand and, as my Globality co-founder Joel Hyatt argued in a recent Forbes article, purpose. AI is enhancing all of these attributes across procurement and helping transform the function into a place where the brightest and best want to make their mark.

There’s a very serious point here in the context of the current skills shortage. A recent Gartner study found that only one in six procurement teams believe they have “adequate talent” to meet their future needs. Companies seeking to recruit the best talent and use procurement strategically must have an edge – and that edge is AI. 

So, let’s break down those cool factors: 

Creativity – Fairly or unfairly, procurement’s image is tainted by its association with box-ticking. When many people think of procurement, they think of compliance, regulations, and bureaucracy. This necessary emphasis on processes and controls can give the impression that procurement lacks creativity or flexibility. The good news is that democratizing data access and handling routine processes is exactly what AI does most efficiently, freeing up procurement people to be more imaginative and creative. 

That creativity will look different in every company. It might focus on driving sustainable and ethical practices that positively impact the brand, society, and the environment. Or it could involve collaborating more closely with various departments, suppliers, and other stakeholders. Or running campaigns to raise awareness internally and externally to promote the ways that procurement is having a positive impact through measures like cost savings, risk management, innovation, and sustainability. Or simply staying on top of market trends and being more strategic. 

Innovation – Using AI-driven technology is innovative by definition. However, procurement stands out as one of the best corporate use cases for Gen AI in particular. Gen AI in procurement can analyze and synthesize huge volumes of complex, unstructured text-based documents to help specialists in all types of sourcing scenarios – from scoping RFPs to making buying decisions. 

The key here is learning to “partner” with AI. Complex, high-stakes spend categories are the most difficult to procure – and until now, to automate. Today, instead of investing hours or days writing a long, detailed brief that covers every possible scenario, anyone can “converse” with Gen AI. They can convey what we call “complex intent” at different stages in the procurement journey using natural language. This not only saves considerable time but achieves much better outcomes because the AI is drawing on a massive body of accumulated knowledge and intelligence from huge number of buyer and seller transactions. 

The bottom line here is that AI-powered innovation is doing much more than simply automating simple procurement tasks. It’s transforming a complex process that has never been humanly possible to do efficiently, optimally, and personally, with a realistically sized team of procurement specialists. 

Impact – What’s cooler in today’s lean, cost-conscious business climate than being able to make a positive impact on productivity? As Scott Belsky, Adobe’s Chief Product Officer and board member of Globality, says in his Substack Implications: “As smaller companies modernize using a new AI-native stack of technology, they no longer need to grow their team to scale their ambition.” 

Procurement’s reputation has suffered in the past due to productivity issues. Activities like data entry, invoice processing, and purchase order processing were very manual and error prone. Systems were fragmented and siloed, leading to inefficiencies. Supplier management was inconsistent and unstructured. AI-based procurement addresses all these issues. 

Of course, the other huge impact of AI-based procurement is its ability to source more intelligently and save companies huge amounts of money. Matt Prichard, Fidelity Investments’ CPO, reported seeing a 20% price improvement by using AI-based autonomous sourcing, for example. 

Personal Brand – The inherent stress of working in procurement with its complexity, tight deadlines, and cost targets makes work difficult enough. But the negative stereotypes about procurement as an obstacle to ‘get around,’ which causes friction and complications, can feel demoralizing. 

Procurement people I’ve met genuinely want to make a positive difference in their companies. But if specialists lack the tools and technology to do their jobs productively, at the pace of business, they are set up to fail, which grinds down morale. 

By liberating people from the drudgery in procurement, making every step of the journey faster, and delivering better outcomes, AI improves every aspect of the function and the lives of those who deliver it. 

To conclude, it is worth reiterating that procurement drives the trade of trillions of dollars around the world. With the power of AI-driven sourcing technology, procurement teams will be participating in the creation of the largest economic engine of our lives, something which glues the world together. I think we can all agree that’s pretty cool!

As the buzz around AI, and gen AI in particular, refuses to die down all CFOs are on the hook from their CEOs and boards to find use cases for this game-changing technology that deliver instant upticks in productivity and efficiencies while reducing OpEx and positively impacting the bottom line. A select group of innovators have identified that procurement is the lowest-hanging fruit out there, enabling enterprises to drive more value from their company spend by implementing enterprise-wise procurement mandates.

They are adopting AI-driven sourcing and spend management technology to ensure that all third-party spend is tendered fairly, competitively, and transparently — with the right guardrails and policies in place to maintain compliance and risk management. As a result, these CFOs are instantly able to get more visibility, control and assurance of buying the right goods and services at fair market prices across all of their expenditures.

Global 2000 companies spend billions of dollars each year but legacy procurement processes and technology mean that many employees simply bypass the designated systems and engage in ‘maverick’ or ‘rogue’ spend as they need to be able to execute their jobs in the marketing, R&D, technology, human resources, real-estate and other functions in the company with a reasonable degree of speed and simplicity.

But forward-thinking finance leaders have identified autonomous sourcing as the answer to this conundrum – the user-friendly, consumer-like experience means using this technology for all company spend above a certain threshold is one mandate that their workforce is happy to embrace.

Let’s look at what CFOs need to consider in order to encourage participation in the process and make sure procurement mandates drive their companies toward the goal of delivering savings, reduced operating expenses and improved business results.

Why more companies are choosing mandates
Traditionally, mandates haven’t always been welcomed by employees, particularly those within the “frozen middle” of organizations where there’s a large disconnect between the declared company strategy and operational imperatives and ultimately the execution by mid-level managers. However, employees will often take the path of least resistance and not follow recommended business processes and practices as they know there are no consequences for doing so, as long as they don’t exceed their budget. While this ensures budgets are not surpassed, it also ensures companies WILL get less for more within that budget. 

With mandates, CFOs can quickly and effectively encourage the behaviors needed to deliver on business goals, principally more efficient cost control and adding strategic value. That’s why we’re seeing more enterprises adopt this strategy.

CFOs are also realizing that being nimble and being buttoned up are not mutually exclusive. In fact, mandates can increase efficiency and agility, especially within procurement where improved spend management directly impacts the bottom line.

Making it easy for employees to comply
For mandates to succeed, they need to be easy for every employee to comply with. It’s straightforward enough to create mandates that are clear and reasonable, such as: “Anyone spending more than a specific dollar amount on a service must participate in the procurement process.” What’s more critical is ensuring the underlying processes for the protocol you’re mandating are easy to use.

If employees are using outdated procurement systems that are difficult or cumbersome, then they’re going to struggle to comply. If you empower people with self-serve, intuitive AI-powered technology, it will make them want to use the mandated platform on an ongoing basis.

Take travel booking, for example, which used to be an agent-based travel management function. Once employees were empowered with the technology to compare rates, flight times, routes and seats, they could pick the best option that worked for them and for the company. This same model applies for CFOs looking to implement procurement mandates for all of their external spending. By giving employees user-friendly, digital solutions with a modest set of guardrails, you’ll empower them to be their own buyer and simplify compliance.

Autonomous sourcing technology enables CFOs to set mandates without having to fear the reverberation of noise – complaints that it’s too hard to comply or business stakeholders continuing to work in their old, archaic way of email and spreadsheets before going into the system right at the end of the process simply for compliance purposes. While democratizing how an organization buys everything it needs – putting the purchasing decisions in the hands of the experts who own the budgets and allowing them to work however they want – this new model ensures issues such as risk management and ESG targets are adhered to while also improving the bottom line.

Procurement mandates deliver instant cost savings
Successful implementation of a buying mandate means substantially more company spend will be managed by technology with new efficiencies and competition across a transparent, inclusive sourcing process that drives your costs 10-20% lower from day one. This fundamentally leads to either more for less, improvement to the company’s bottom-line (and therefore employee bonuses and shareholder returns) or conscious reinvestment in critical growth initiatives.

CFOs who invest in AI-driven sourcing and spend management solutions will find that mandating their use by the business is far easier than has often been the case in the past and that their organizations will both enjoy value from day one and be better positioned to manage the bottom line in the long term.

Click here to request a demo of the market leading automated spend management platform for instant improvements to your bottom line.

It has long been a quandary for financial leaders but, thanks to new transformative technology the answer is simple – embrace AI and automate your spend management model. 

As businesses continue to embrace the transformative power of artificial intelligence (AI), a clear business case has developed for CFOs that delivers an immediate return on investment (ROI), reducing operational expenses (OpEx) and cutting up to 20% on their corporate spend.

As highlighted by McKinsey, Generative AI, which involves using machine learning algorithms to create new content such as text, images, or videos, has the potential to automate processes, improve customer experiences and streamline operations to help drive new efficiencies and create new value across business.

And according to PwC, companies that implement AI technology have the potential to increase their profitability by 38% by 2035.

Identifying the right use cases is key to success

To reap the benefits of generative AI, CFOs must identify and prioritise the most impactful use cases that align with their business objectives, focusing on the tasks and teams which can make the most impact from day one and drive instant improvements to the bottom line.

By successfully identifying the right areas of their operations to leverage generative AI across their workplace tools, companies can increase their productivity, reduce their OpEx and gain the competitive advantage that is more important than ever in today’s volatile economic environment.

The CFOs big opportunity: AI-driven spend management

There is an area, often overlooked by CFOs, where the power of AI and Gen AI can deliver immediate bottom-line savings – every dollar their company spends, especially on indirect goods and services.

The amount of indirect spend is typically around 20% to 40% of revenue, and is usually classified as Selling, General and Administrative expenses (SG&A). For a typical Global 2000 corporation, this can amount to costs that run into billions of dollars.

However, numerous organisations make the incorrect assumption that they have their indirect spend well-managed, when in reality the situation may be quite different.

Globality’s research for CFOs found 82% of procurement leaders say their indirect spend is not well managed during the sourcing process, leaving substantial cost savings on the table.

Leading global companies like Adidas, BT, Tesco, Fidelity and IQVIA are already using advanced AI sourcing tools such as Globality to avoid overbuying and saving 10-20% on their billions of dollars of indirect spend.

A perfect match: generative AI and sourcing

When Generative AI meets autonomous sourcing, the use cases are compelling and it can transforms an organization's spend management by automating processes, providing intelligent insights, and improving decision-making, enabling business stakeholders to buy what they need more quickly with more competition among suppliers and the ability to negotiate better on price.

If CFOs work closely with their technology teams to identify the most impactful use cases and develop a clear roadmap for implementation, they can realise substantial cost savings from day one, ensuring that all third-party spend is tendered fairly, competitively, and transparently.

Autonomous sourcing also supports the tendering process, comparing proposals and driving negotiations, while at the same time implementing appropriate guardrails and policies to maintain full organisational compliance and risk management.

As a result, CFOs now have visibility and control of indirect procurement. They can be much more confident that they are buying the right goods and services at fair market prices.

And if line-of-business managers are freed from unwieldy procurement processes and empowered instead with user-friendly, self-serve sourcing technology, they are highly likely to embrace this new way of working with enthusiasm.

Our survey found that  85% of procurement leaders believe business users would comply with procurement processes if their companies offered intuitive self-service technology.

Equipping your teams to do more with less

Adopting an intelligent and intuitive spend management platform will also free up sourcing teams from transactional work. By automating these low-value manual processes, they can instead focus on high-value strategic tasks, such as supplier collaboration, scenario planning and improving the function’s operational excellence. This shift will greatly contribute to driving much-needed growth across the business.

Contact us for a demo of Globality’s AI-driven spend management platform – winner of Best Technology Provider at the World Procurement Awards – to see how it uses cutting-edge AI, built from the ground up, to deliver 70% efficiencies and 10-20% cost savings instantly.