Artificial intelligence (AI) technology can improve the procurement process for public-sector organizations through automation, according to a new report.
The report, AI-Powered Procurement: Harnessing AI’s Potential for More Efficient State Procurement Practices, is a joint publication from the National Association of State Chief Information Officers (NASCIO) and the National Association of State Procurement Officials (NASPO).
With 51 percent of procurement professionals lacking confidence in managing projects due to staffing shortages, automation through AI is a promising solution. And while risks exist, implementing standards for accountability can mitigate those.
The new report from NASCIO and NASPO offers insight as to the best practices for AI adoption in the public procurement process, the challenges and benefits of AI, and a strategy for integrating AI.
It highlights specific use cases for AI in procurement, such as automated document processing, chatbots for vendor inquiries, predictive analytics for spend forecasting, and AI-powered market research.
“AI has the power to transform state operations but requires coordinated efforts between CPOs [chief procurement officers] and CIOs,” Matt Oyer, NASPO’s chief learning officer, said in a statement.
However, obstacles to AI deployment exist; the report highlights insufficient planning, policy guidance and collaboration as common pitfalls. To address those, the report recommends the prioritization of data security, bias prevention, accountability and transparency, maturity of AI tools and navigation of complicated regulatory frameworks.
Best practices for AI adoption as outlined in the report include the development of AI policies, focusing on targeted use cases before large-scale deployments; and fostering collaboration between IT departments and procurement officials.
“This report not only highlights the opportunities AI offers but also addresses the challenges of implementation, particularly around data privacy, ethics and transparency,” Amy Glasscock, NASCIO’s program director of innovation and emerging issues said in a statement, noting that guidelines and planning can help states implement AI while centering public trust and safety.
The report was created through interviews with chief procurement officers, chief information officers, AI technology vendors and platform intermediaries. It also includes resources to support strategic planning for AI in procurement, such as the NASCIO AI blueprint.
