Artificial Intelligence or Emotional Intelligence ?

Numerous publications focus on the role that artificial intelligence will play in the future of all professions, including procurement. However, emotional intelligence, which enables us to build relationships and create commercial value, remains an irreplaceable skill.

Artificial intelligence undeniably frees up time. What should we do with this time, when we will very soon be able to entrust AI and robots with the responsibility of managing our tactical and recurring tasks?

Thirty years of change in the procurement function

The procurement profession has evolved considerably over the years. Crises, in particular, have created opportunities, since companies have a particular need fo procurement in situations of tension, whether financial, health-related or geopolitical. In the 90s, we were trying to save money without digital tools, spending hours, days and months negotiating prices in endless supplier meetings.

Then we started using electronic platforms, which saved us a lot of time. Then came the financial crisis of 2008. Previously, buyers were really in a position to choose their suppliers, and the market was in procurement’s favor. The situation then turned around, as some suppliers were weakened, bought out or went bankrupt. Many of these companies relocated their production to China and South-East Asia.

From then on, we started to lose control of our suppliers. They were far away, so we couldn’t visit or audit them as easily. But we were happy because prices were becoming more and more competitive.

Covid was like an earthquake that shook the puzzle.

Then came the Covid crisis. Suddenly, we were surprised. During the period of increasing globalization, everything was well organized, like a well-arranged puzzle. Covid was like an earthquake that shook the puzzle; the pieces were still there, but they were totally scattered.

AI brings key data to take supplier relationships up a notch

Once again, suppliers began to choose which customers they would serve. Even if we had a contract, we had no way of obtaining everything that was expected in terms of quality and quantity, not to mention prices over which we no longer had control. This was an opportunity for procurement to gain maturity and exposure. This phenomenon is accelerating thanks to AI.

Until now, we tried to manage risk using Excel.

AI now helps us act smarter AI-assisted risk management is indeed one of the possibilities open to us. Until now, we tried to manage risk using Excel. AI is now helping us to act smarter.

AI provides not only data, but above all the analysis of that data. Having digested data allows you to have the right discussions with your suppliers, with the aim of controlling risks, an eminently topical subject.

Automating tactical tasks under human control

The crisis and AI are pointing us towards much more interesting jobs, as all tactical activities will very soon be replaced by robots; 80% of the tenders of some major international FMCG companies have been managed by robots for a long time now. However, decisions still have to be taken by humans. I’m not necessarily going to work with my cheapest supplier, because if I do, I risk missing out on something important in the relationship, such as risk management and value creation.

We need to accelerate our ability to be strategic, because these are the only jobs that will remain in procurement.

The procurement pyramid includes a large number of people performing tactical activities and very few people working on strategy. The pyramid is being inverted. This means we need to accelerate our ability to be strategic, because these are the only jobs that will remain in Purchasing.

Suppliers have so much to offer. Emotional intelligence is becoming a competitive advantage. A purchasing organization that is unable to listen and create the right conditions for suppliers to offer them their best solutions will not survive the inevitable evolution of the business. The higher your emotional intelligence, the more you can attract and cultivate relationships with your suppliers.

Focusing solely on price destroys value, and robots know how to do that already very well

Focusing solely on price destroys value, and robots know how to do that already very well. We need to improve our human relations, strengthen our emotional intelligence, grasp their points of view and put ourselves in their shoes to understand our suppliers. Indeed, the AI tool that will be able to perform these eminently human tasks is not yet born.