The Pros and Cons of Implementing AI in Procurement

AI might be seen as the panacea, or cure-all, for keeping up in a complicated global market. But, as with everything, there are negatives to its implementation.

Many businesses of all sizes have embraced a range of technologies as part of their digital transformation efforts in order to compete successfully in an increasingly complicated global market. Artificial Intelligence is a true performance lever that is currently being employed in a variety of businesses and professions, but it still has a lot of room for growth. It has an impact on and handles a variety of operations throughout the procurement cycle. 

However, as is common with major corporate changes, implementing change efficiently may be challenging and time-consuming. As a result, procurement executives must be aware of both the attractive prospects and the problems that AI-powered management in Procurement entails. We’ll go over some of both in the sections below.

The Benefits of Implementing AI

AI in Procurement has endless possibilities in modern companies, yet it might be tricky or difficult to notice straight away. Technology can immediately make a major beneficial effect if procurement personnel are aware of the following unique opportunities.

Inventory Management

AI is growing better at inventory management every day, thanks to its capacity to collect, filter, and analyse massive information. The technology can detect customer behaviours and compare the supply side to limit supplies to a bare minimum while avoiding procurement disruption.

Today, AI-powered management systems can develop digital product designs and send them to 3D printing and metal injection processes, resulting in goods that are automatically created and ready for distribution. When it comes to the finer features of these production technologies, some manufacturers believe that injection moulding and 3D printing companies can handle complicated designs and purchase orders of any size, giving them a lot of procurement flexibility.

Automation and Safety

The most significant advantage of employing AI to handle procurement is automation. For example, in AI-powered management of a warehouse, robots are primarily used to store, find, and choose items. Pre-programmed devices can do it on a regular basis, accelerating packaging operations and raising production to new heights. Although fewer employees are involved, the firm continues to run efficiently.

AI is a technological system that manages a large amount of sensitive commercial data. If you don’t invest in high-quality security measures with cutting-edge safety features, this might become a major problem. One security event might affect the procurement’s performance, so make sure it’s secure 365 days a year.

Cost Reduction

Another benefit of incorporating AI into procurement is cost savings. Companies are scrambling to find cost-cutting strategies in the aftermath of coronavirus outbreaks. Instead of reconsidering employee remunerations, decision-makers should examine automation-driven cost-cutting strategies as technology takes control.

Because the majority of the labour is now automated, you’ll need to hire fewer individuals. Aside from that, robots may operate nonstop, and the frequency of errors and workplace mishaps is continuously decreasing. AI can help organisations safeguard income and cut expenses by assisting them in better understanding their consumers and then turning that insight into tailored, proactive interaction. As a result, AI improves the procurement’s long-term profitability. 

Supplier Relationship

Multiple facets of the supplier relationship, especially risk and event management, may be handled by AI-powered management. By monitoring the provider contracts timetable and the vendors’ level of quality, for example, the system can inform users if deadlines are not met or a pledge is not kept.

Your procurement company should embrace Artificial Intelligence to improve customer service. Why is that? Chatbot technologies are the answer. Chatbots can help businesses save money on customer service by shortening response times and addressing 80% of common inquiries. Artificial operators are accessible 24 hours a day, and they are becoming more intelligent with each discussion, so they are likely to completely replace human operators in the near future.

Artificial Intelligence also aids buyers in managing procurement performance by providing visibility into costs and savings, speeding decision-making, and automatically creating reports and customised dashboards based on the target audience.

The Drawbacks of Implementing AI

While AI might be advantageous in and of itself, a lack of a comprehensive deployment plan can make it significantly less successful (or even problematic). It’s tempting to believe that Artificial Intelligence can take care of itself, but the fact is that it requires careful handling, direction, and management. As a result, any organisation wishing to apply Artificial Intelligence in the procurement process must develop a thorough strategy that includes goals and objectives, implementation and personnel training, and continuous system administration. 

AI is continually growing, with several research and development projects taking place throughout the world. However, when algorithms start creating additional algorithms, which have to be auto-executed, a “black box” scenario emerges. The nuts and bolts of these AI-generated algorithms may be difficult for researchers and AI technologists to unravel fast. 


AI comes with its own set of obstacles and hazards, but that doesn’t rule it out as a viable option. Instead, AI should be carefully examined as part of a complete risk, contingency, and mitigating matrix in procurement. Taking measures to engage proactively with an A.I. system and anticipating such problems may assist procurement professionals to reap various rewards. Finally, it’s a process that more and more modern organisations will go through, and if done well, it may drastically enhance operations.