ChatGPT in Global Procurement — 8 Tips For Responsible Use & Efficiency

ChatGPT in global procurement emerges onto the scene as a resourceful and efficient new method of completing procurement processes. With the trend of ChatGPT and other AI models being used as assistants to human creativity, more users want to ensure that AI is being equipped responsibly to make processes more efficient.

This article provides eight crucial tips every procurement team should consider when using ChatGPT in global procurement processes. Delve into the world of AI in procurement and derive insights on responsible applications and how ChatGPT can assist human decision-making.

Before you read the article, I have created a free-to-download, Productive Procurement with ChatGPT Toolkit template. It includes a PDF file that contains prompts that can help you in your global procurement. I even created a video explaining how to use the templates.

Human-AI Collaboration in Procurement

Multiple topics come into question when it comes to AI applications. Is it ethically sound, and how can we guarantee that AI is used responsibly? Will AI applications result in job displacement? What can we do with ChatGPT to make our procurement processes better, faster, and smarter?

Despite the many controversial conversations surrounding artificial intelligence, ChatGPT in procurement has quickly become indispensable in optimizing various processes, including email generation, customer support, contract drafting, and more. 

The right approach to AI is to think of it as a pseudo-assistant to human creativity. ChatGPT can assist people, but it cannot replace human decision-making or replicate specialized work. Therefore, people should work toward a future of responsible AI, using conversational models like ChatGPT to enhance processes without forgoing human creativity.

8 Crucial Tips For ChatGPT-Powered Global Procurement

While ChatGPT and AI models can be incredibly resourceful in global procurement, it’s important to remember their limits as well as their strengths. Below are eight crucial tips for implementing ChatGPT in global procurement.

1. Understand ChatGPT and AI model limitations

ChatGPT can be used for global procurement as it can generate context-relevant text, but it may not understand industry-specific terms or language nuances. In general, ChatGPT can output fairly accurate answers to precise and simplified prompts. Still, it is important to remember that this information might not be up-to-date.

To resolve this, procurement teams should always verify information and sources, especially when using information from multinational markets. This ensures the accuracy and reliability of data in decision-making.

For instance, a procurement team asks ChatGPT to find the pricing for a certain product in the European market. However, ChatGPT is not equipped for real-time reports on the latest prices or demand for products and services in specific areas around the world

ChatGPT may output prices from the previous year or respond by encouraging cross-verification as it doesn’t have updated information. Therefore, procurement teams should always verify whether information on pricing, global market conditions, and other factors is correct.

2. Employ strict data security measures

Stakeholders across global industries have voiced their concerns about data security and privacy, questioning whether data is safe with ChatGPT. This is largely due to ChatGPT’s lack of awareness of nuance, context, and more importantly, privacy.

As a professional, you never want data leaks or security breaches to affect global suppliers, customers, and companies. Thus, procurement teams must implement data security measures to protect confidential procurement data.

Additionally, avoid sharing open-ended conversations that risk non-compliance with international data protection regulations, such as GDPR, PIPEDA, and others. Moreover, maintain and uphold integrity in the handling of sensitive information.

3. Promote bias awareness and mitigation

Because ChatGPT lacks contextual understanding, it may be prone to bias and a lack of sensitivity regarding culture, race, gender, and more. To limit or avoid bias, ChatGPT should be regularly monitored and reviewed.

Routine reviews let teams refine AI models’ behavior to reduce bias and ensure that all global procurement decisions and processes remain fair and equal. Continuous refinement will also enable teams to enhance ChatGPT’s outputs for increased accuracy and efficiency.

4. Oversee and review usage of ChatGPT

ChatGPT is a resourceful model when it comes to global procurement, but it may overlook inaccuracies, misinterpretations, and nuanced information, leading to misleading responses and inconsistencies in the procurement process.

To resolve this, procurement teams should harness the hands-on attention of human oversight to improve global procurement functions. Qualified professionals can review ChatGPT’s outputs to identify and address any misinterpreted data, inaccurate generated text, or culture-specific responses.

ChatGPT and AI models are not meant to replace human decision-making but are put in place to assist it. Thus, human expertise ensures a thorough evaluation of ChatGPT’s behavior and allows experts to enhance the model in areas where it is needed.

5. Follow ethical and sustainable decision-making guidelines

With the rise of artificial intelligence, machine learning, and other advancements in technology, topics such as ethical integrity, cultural sensitivity, and environmental responsibility come into question. 

Investors, consumers, and procurement professionals from around the world raise concerns about integrity in the scope of AI, questioning its ethical boundaries and limitations. Some have even expressed apprehension and doubt about the imprint of AI on human rights and the environment.

To ensure that ChatGPT usage aligns with both organizational values and regulatory standards, procurement teams should establish clear ESG guidelines for using ChatGPT in global procurement. Define ethical limitations, stay informed on their environmental impact, and always adhere to ESG standards and any applicable laws.

6. Ensure regulatory compliance and transparency

There are several policies, guidelines, and laws from around the world in place to ensure the responsible use of AI models like ChatGPT. Data protection laws such as GDPR, CCPA, and more have been enacted for this reason.

For companies that aim to always uphold lawful and responsible AI applications, it is crucial to stay updated on the changes in procurement regulations. Teams must ensure compliance with legal requirements, and follow protocols to promote proactive legal compliance.

Furthermore, businesses should implement their own ChatGPT policy. A policy such as this ensures that all individuals, teams, and stakeholders involved follow a strict set of guidelines that also align with company values as well as international laws, ultimately promoting accountability while avoiding legal implications.

7. Train and collaborate with global suppliers 

Without open communication and collaboration, suppliers could misunderstand how ChatGPT is applied in global procurement processes. This could lead to misinterpretations and inefficient processes, which is why supplier training and collaboration is crucial.

Make sure that all your suppliers are involved in training programs and workshops. This not only creates awareness surrounding ChatGPT in procurement but also involves your suppliers in the process, creating positive relationships with multicultural supplier pools.

8. Develop an incident response plan

Prevention and proactivity are key in managing risks with ChatGPT in global procurement. Without a protocol, businesses risk disruptions that could upset workflows and impact cost management, international supplier relationships, and more.

Therefore, procurement teams should develop a comprehensive incident response plan for expected issues or inconsistencies from ChatGPT applications in global procurement, sourcing, and other processes. By outlining clear steps for identifying, addressing, and rectifying issues, companies can minimize disruptions to procurement workflows.

Examples of AI Companies Empowering Global Procurement

While ChatGPT is a relatively new AI model, a few companies have demonstrated their use of AI in global procurement. Below are some notable examples.

1. JAGGAER

JAGGAER boasts cloud-enabled automation platforms that are designed to optimize the global procurement process, from international sourcing all the way through to payment. Their platform offers end-to-end visibility and guaranteed spend control. 

JAGGAER enables procurement teams within international corporations to make data-driven decisions. By utilizing JAEGGER’s cutting-edge AI platform, procurement teams create greater value by not only streamlining global procurement processes but also making strategies more effective.

2. IBM Watson

IBM Watson uses cutting-edge AI technology, including natural language processing (NLP) and machine learning (ML) capabilities. These models are able to analyze and interpret large datasets gathered from global sources.

This technology enables procurement teams in global procurement operations to make strategic decisions. One of IBM Watson’s notable features, Watson Discovery, uses natural language processing (NLP) to help teams derive insights from various sources, allowing the company to reduce risks and fine-tune its supply chain operations.

3. Coupa

Coupa is an AI-driven platform spend management platform and software corporation that provides modern solutions that are designed to aid procurement teams in optimizing spend management, invoicing, and global procurement as a whole.

The AI Spend Classification System is a key component of Coupa’s cloud-based platform. This system leverages the power of machine learning and artificial intelligence to normalize, categorize, and augment spend data from different systems and regions.

This helps equip multinational corporations to monitor and manage their global expenditures, effectively leading to strategic decision-making and better financial performance.

4. Basware

Basware’s AI solutions are tailored for multinational companies aiming to enhance their global procurement processes, including e-invoicing, purchase-to-pay, and source-to-contract.

Basware’s experience in the procurement field and dedication to investing in AI technologies allow it to meet the standards and requirements of global procurement operations.

Moreover, Basware’s cutting-edge technologies not only simplify complex procurement tasks but also provide accuracy in various stages of the global procurement process. By prioritizing AI applications, Basware can offer highly adaptable solutions that allow teams to keep up with the demands of global procurement landscapes.

5. SAP Ariba

SAP Ariba is considered a top-tier AI company due to their expertise in the industry. Through their advanced understanding of procurement processes, SAP Ariba is able to apply this expertise to their AI solutions.

SAP Ariba’s advanced AI technology encompasses natural language processing, machine learning, and robotic process automation. These technologies create automated procedures, thorough data analysis, and data-driven decision-making capabilities, thus boosting the effectiveness of global procurement processes.

Moreover, SAP Ariba has integrated blockchain technology into their global procurement solutions, aiding transparency and increasing security. SAP Ariba’s technological capabilities position them as a key player in AI-enhanced procurement solutions.

Conclusion

ChatGPT in global procurement presents an opportunity to enhance various processes to make them smarter and more efficient. Responsible use and legal compliance are paramount to navigating ethical concerns and proving ChatGPT’s strengths and limitations to stakeholders. 

Human-AI collaboration, understanding limitations, data security measures, bias awareness, human oversight, following ESG guidelines, regulatory compliance, and supplier collaboration are all crucial components of successful global procurement with the help of AI.

These tips can guide companies to reap the benefits of responsible AI applications in global procurement, allowing businesses around the world to contribute to creating more efficient processes and adhering to ESG practices.