**London**: As Generative Artificial Intelligence continues to reshape business operations, Fairmarkit CEO Kevin Frechette highlights the untapped potential of GenAI in procurement, urging teams to embrace the technology for strategic impact and efficiency gains in financial performance.
Generative Artificial Intelligence (GenAI) is increasingly reshaping various areas of business, yet its application within the procurement sector remains underexplored. Kevin Frechette, CEO of Fairmarkit, shared insights into the potential benefits of GenAI in the procurement process during a conversation with BetaNews.
Frechette noted that the broader adoption of technology in procurement has lagged behind other business areas. The historical perception of procurement as a ‘back office’ function has contributed to this delay. He observed that teams in marketing and sales have been quicker to adopt innovative technologies due to their ongoing focus on agility and transformation. “When GenAI debuted, these forward-thinking teams went through the same rhythm they’ve been training themselves on to embrace GenAI,” Frechette stated, highlighting the efficiency gains and measurable returns observed in these departments.
As procurement teams increasingly recognise the capability of GenAI, Frechette believes they are poised to transition from traditionally supportive roles to strategic players within their organisations. By implementing digital transformations, especially through GenAI, procurement teams can significantly influence their companies’ financial performance. However, building a culture adaptable to change is essential, as Frechette explained, “they just need to build up that muscle for change that they haven’t exercised before.”
On the effectiveness of GenAI, Frechette asserted that its application can enhance all aspects of procurement. He advised businesses to pursue incremental improvements rather than aiming for large-scale changes immediately. “Driving measurable impact up front on your first small initiative will set you up for another one, and then another and another,” he suggested. Fairmarkit’s AI system is designed to aid procurement teams in achieving consistent wins across various stages of the procurement process, automating tasks such as statement of work (SOW) generation, requirements gathering, and contract negotiations. This automation allows team members to dedicate more time to strategic priorities, ultimately managing larger budgets efficiently.
Frechette also indicated that the supply side is ripe for transformation through GenAI. He stated, “The supply side is perhaps even more ripe for change than the buyer side.” He highlighted the potential for GenAI to improve supplier operations significantly. By leveraging AI and machine learning, suppliers can enhance their processes, allowing for more competitive advantage in the market. AI-powered virtual agents could optimise sales proposals, ensuring they are attractive and informed by data, thereby revolutionising interactions between buyers and suppliers.
When selecting an AI solution, Frechette pinpointed several critical factors, including the speed of iteration, operational simplicity, and the importance of partnership. He emphasised the need to collaborate with AI providers that can adapt rapidly to the fast-evolving landscape of AI technologies. A robust partnership is vital, based on mutual trust and clear communication regarding priorities. He cited a customer relationship where transparency about goals fosters accountability and success.
Frechette forecasts that GenAI will become integral to the digital transformation of procurement, akin to the internet’s impact on business three decades ago. He explained that teams employing GenAI are witnessing measurable improvements, such as enhanced compliance and reduced risk. “Procurement has transformed into a ubiquitous entity that can collaborate with the entire organization in a personalized, scalable manner,” he articulated. The shift allows for streamlined purchasing processes that benefit both requesters and procurement teams.
As organizations stand on the cusp of GenAI’s potential, Frechette believes early adoption will be crucial. He remarked, “We’re still basically at the starting line with GenAI. This technology is in its infancy, and the value ceiling hasn’t even been identified.”
In summary, the conversation with Fairmarkit’s CEO underscores the significant opportunities and transformations that GenAI could bring to procurement, heralding a new era for the function within businesses as it becomes more strategic and integrated across operations.
Source: Noah Wire Services
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