ChatGPT & AI in
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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

ChatGPT Challenges — 5 Tips for Streamlining AI Use in Procurement

Key takeaways

  • Using ChatGPT comes with the risk of misunderstanding a prompt, which is why it’s crucial to make your requests specific.
  • Prompt engineering refers to creating your prompts in a way that is meant for AI models to understand.
  • Some of the main challenges in using ChatGPT for procurement involve misinterpreting commands, adaptability, customization, and more.

ChatGPT challenges in procurement are inevitable, with the AI bot regularly undergoing updates to improve its functions for a more positive and effective user experience. When applied correctly and responsibly, ChatGPT has the potential to transform procurement processes.

In the future, we can expect to view ChatGPT’s natural language processing capabilities as a procurement game-changer, streamlining communications and decision-making. 

This article explores the key challenges associated with ChatGPT in procurement, including tips for addressing roadblocks in AI-powered procurement.

Overview of ChatGPT Challenges in Procurement

ChatGPT is a conversational AI model, introduced by OpenAI in 2022, designed to answer questions, requests, and complex data instantly. Its natural language processing (NLP) capabilities enable ChatGPT to generate human-like responses, making it a perfect pseudo-assistant in streamlining various processes.

However, like other AI bots, ChatGPT also has its limitations within procurement. This can include misinterpreting requests concerning market research, providing vague answers about product availability, generating irrelevant responses regarding crucial procurement and sourcing processes, and other roadblocks that come with using any AI-powered model.

Aside from this, procurement leaders may question the efficiency of ChatGPT from an ethical standpoint. Apprehensions arise about ChatGPT usage, stemming from personal experiences that show its limitations in providing inclusive and unbiased responses, especially in the scope of supplier diversity and sustainable sourcing. Furthermore, many still need to embrace the benefits of using AI in procurement.

 5 Key ChatGPT Challenges in Procurement 

We’ve covered that ChatGPT offers several benefits,  but what are the limitations associated with its capabilities in procurement? Here are five key ChatGPT challenges in procurement.

chatgpt-challenges

1. Inconsistent Interpretation of Requirements

One of the main challenges associated with ChatGPT involves the risk of misinterpretation of complex requirements. In procurement, this can inhibit process efficiency and become potentially damaging to an organization.

ChatGPT’s limitations in dissecting nuance and context in procurement-related requests can lead to misinterpretations and damaging errors in areas like data analysis, contract drafting, supplier selection, and other crucial steps.

2. Adaptation to Procurement Policies

ChatGPT does not have access to real-time data and live updates on procurement policies. This can be a challenge when adapting the bot to your organization’s procurement policy.

ChatGPT must adapt to changes in procurement policies, but this can be especially difficult when updating AI integrations with dynamic procurement policies and varying regulations in sourcing, supply chains, supplier selection, and others.

3. Integration with Real-Time Market Data

Impactful decision-making with ChatGPT requires the chatbot to be integrated with real-time data. Considering the limitations associated with ChatGPT and incorporating real-time updates can be a challenge.

Nevertheless, it is crucial to correctly integrate and maintain data accuracy to ensure your procurement practices keep pace with evolving business landscapes and global markets.

4. Customization for Complex Procurement Strategies

Organizations have different approaches and unique procurement strategies that vary depending on industry, services provided, consumer demographics, and more. 

When customizing ChatGPT for procurement needs, teams may struggle to align these nuances efficiently. Additionally, ChatGPT cannot retain context perfectly over time, which presents a challenge in using the model for various procurement operations in diverse industries.

5. Ensuring Compliance with Global Standards

Different countries and regions are going to have different procurement standards, regulations, and requirements. ChatGPT cannot pull real-time data on diverse global standards, which can pose a challenge for procurement teams operating on a global scale.

Procurement operations in other countries may not be as stringent, and other regions in high-risk areas may impose different regulations or standards in procurement, which organizations must always be prepared to adhere to.

5 Tips for Enhancing Accuracy and Experience

Like all aspects of procurement, it’s important to have a firm understanding of the risks to address them effectively. How do we address ChatGPT challenges in procurement? Below, we’ve listed five tips to overcome the challenges mentioned earlier that are associated with ChatGPT in procurement.

1. Utilize Specific and Detailed Inputs

Procurement is a highly intricate process, with multiple stages and different people involved. Understanding this aspect is key to using ChatGPT efficiently and enhancing the model’s accuracy. 

When drafting your procurement requests, questions, or concerns, make sure to provide specific details. This clarity in ChatGPT inputs improves its understanding of procurement instructions, allowing you to get the answers you need to proceed with your procurement process.

2. Regularly Update the AI Model

ChatGPT does not have access to real-time updates, especially with procurement data about organizations. Therefore, organizations should not rely on ChatGPT for procurement requests without providing data and context.

To ensure that ChatGPT’s outputs are always relevant and accurate, organizations should regularly update the model with any changes in procurement policies and processes. This is to avoid misinterpretations, errors, and incorrect answers when dealing with procurement requests.

3. Integrate ChatGPT with Procurement Intelligence Systems

ChatGPT has numerous capabilities when it comes to assisting businesses in making smart decisions. To access opportunities for improvement and long-term success, businesses must equip the bot for these goals.

This can mean integrating ChatGPT with either procurement intelligence systems or market analysis systems, which can significantly enhance its capabilities in assisting procurement decisions.

4. Customize and Train ChatGPT

Customization is key when using AI in procurement and this technology to optimize tasks in supplier selection, negotiations, sourcing, and others. With the right customizations, procurement teams can leverage ChatGPT’s automation capabilities to optimize entire processes.

To achieve this, procurement teams can train and equip ChatGPT to seamlessly align with different procurement strategies, including your processes and workflows for the best procurement results.

5. Implement a Review Process

Like any AI application, it’s crucial to exercise human judgment. ChatGPT can be significantly impactful and resourceful in optimizing procurement processes, but teams should regularly review its applications.

To do this, organizations can develop a comprehensive process for reviewing and double-checking ChatGPT’s behavior and outputs. This ensures accuracy and limits the risk of potential errors in procurement with the help of AI.

An Example Of Navigating ChatGPT Challenges

ChatGPT has many uses in procurement, and there are several ways in which professionals are using the bot to navigate common challenges in ChatGPT-powered procurement. 

As we understand it, these challenges can include the risk of AI replicating human bias, providing incomplete or incorrect answers, responding with inaccurate or outdated information, and others. To overcome this, professionals are experimenting with ways to navigate the challenges associated with ChatGPT in procurement.

In a podcast episode created and hosted by Una, a leading group purchasing organization, they discussed the topic of ChatGPT in procurement and how it can maximize business operations if applied correctly. Senior Sourcing Manager at Ro, Joshua Palacios, emphasized the impact of generative AI for this very purpose. He highlighted that prompt engineering is crucial for using ChatGPT effectively.

Prompt engineering entails grasping how to communicate with ChatGPT in a way that enables the model to understand and effectively respond. Ultimately, the more instructions and details you give ChatGPT, the better the output. 

Palacios brought attention to ChatGPT’s capabilities in preparing procurement professionals for future negotiations by practicing using AI-generated scenarios. From the podcast episode, we learn that ChatGPT’s purpose is not to predict exactly what will happen in those scenarios, but to give us an idea of how to carry out a negotiation.

According to Una, it is vital to give precise inputs to get the best results. Key in achieving this can be in giving the bot context, telling the AI its role, explaining the task, talking about the consumer base, defining your tone, and giving parameters to ensure ChatGPT gives not just quick answers but also accurate, comprehensive, and concise.

AI and ChatGPT challenges are inevitable. In procurement, these challenges can become the root cause of technical issues, security breaches, inaccuracies, and more. The conversations surrounding ChatGPT in procurement highlight the importance of prompt engineering, which allows you to leverage the benefits of AI in your procurement process without compromising on ethics and efficiency.

By using context-rich inputs, procurement professionals can achieve the best results using accurate and comprehensive outputs with the help of ChatGPT. Moreover, learning how to use ChatGPT efficiently also entails using it responsibly, by striking a balance between AI assistance and human creativity.

Conclusion

To sum up, while ChatGPT shows significant potential in transforming the way we source, select suppliers, review contracts, and more, it is crucial to understand the challenges that come with it. Acknowledging these challenges will help you effectively manage your applications of ChatGPT in procurement. 

By closely monitoring and regularly reviewing ChatGPT’s use in procurement, organizations can access new opportunities for optimizing their performance and upholding responsibility in procurement.

Frequentlyasked questions

Can ChatGPT handle complex procurement requests?

ChatGPT can handle complex and nuanced requests. However, it is crucial to make inputs specific and detailed to ensure accurate responses.

How can organizations ensure ChatGPT complies with diverse global procurement standards?

To ensure compliance, teams must regularly update and review their applications of ChatGPT in procurement, which includes customizing the model and implementing a review process.

What benefits does ChatGPT bring to procurement processes?

ChatGPT has the potential to enhance procurement decisions, minimize manual errors, and streamline communications with suppliers.

About the author

My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

Marijn Overvest Procurement Tactics