As we collectively look forward to our summer time break, the opportunity to recharge the batteries and step back is a welcome rest. User fatigue is common challenge in technology evolution; user dissatisfaction, lack of trust in technology, frustration and lost interest reduces the level of user engagement and motivation in technology adoption.
Within Procurement, there are myriad of AI use cases that offer potential but currently lack tangible and demonstrable output.
Risk Aversion
AI is hampered by bad data but the lack of trust in the technology blinds decision makers in endorsing ‘finding a better way’. This vicious cycle creates a detrimental effect, or even the perception of high risk.
Organizations that are risk averse have a higher level of user fatigue (The Institute Risk Management Risk Appetite & Tolerance Guidance Paper, Sept 2011) . The balance between ‘reward’ and ‘risk’ must be explored and purposefully agreed by the business.
Gartner Research Feb 2024, ‘Embed Total Cost of Ownership (TCO) in Procurement Teams to Optimize Value’, recommends TCO principles to improve business performance success. This perspective requires a new set of value measures, triangulating additional datasets housed across various internal and external systems. Procurement organizations must prioritize data integrity to minimize user fatigue. Note: You can have the best AI technology, but if there is no trust or use case benefit, adoption and ROI remains zero.
Data integrity considers not only the accuracy and consistency, but the ways data is interconnected across disparate systems to create ‘single sources of truth’ with high quality data.
Addressing the risk that AI itself impacts the organization’s data quality is another concern. According to McKinsey, “some 71 percent of senior IT leaders believe generative AI technology is introducing new security risk to their data.”
90% see improving compliance and risk as important for driving their data-driven decision intelligence investments
Source: ProcureTech research
Increasing Complexity Trend
Data, Data everywhere but not a drop to drink
Accordingly to Gartner, increasing supply chain cost and complexity, as well as economic and geopolitical instability, are significantly impacting business margins and supply continuity. Inevitability this means that organizations will require more TCO data points to manage the evolving supply chain scope.
Structuring unstructured data will make it a business asset.
Back to Basics
Seemingly the procurement road to success is not only to change the perspective, but to take advantage of technology, they must revisit their risk and reward balance. Understanding how to deliver improved data integrity within the supply chain will support the journey of winning ‘hearts and minds’.
AI is intended to simulate human intelligence and the ability to acquire and apply knowledge in an application that users trust and adopt will be a critical success factor.
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