OPENING LINES AI IN PROCUREMENT: SECOND WAVE APPLICATIONS Source: americancityandcounty.com, Steve Isaac, First published December 09th, 2024 Early document authoring applications offered only a glimpse of AI’s potential for process automation and data insight discovery. Today, we are witnessing a second wave of AI applications for government procurement—not just speeding up how our industry works but fundamentally changing it. Just two years ago, artificial intelligence (AI) was largely spoken of aspirationally—confined to venture capital pitches and the secretive engineering bullpens of the world’s biggest tech companies or young upstarts like the now-famous OpenAI. ChatGPT launched in November 2022 and was followed by an avalanche of AI innovations. If you want a sense of the overall business impact of AI, look at Nvidia—historically a graphics processing company for video gaming. It turns out their GPUs are well-suited for AI applications. In November 2022, their market cap was $406 billion. Two years later, they are the second-largest company in the world with a market cap of $3.43 trillion, hot on Apple’s trail. The initial wave of excitement about AI in procurement saw professionals imagining automated bid creation for agencies, while suppliers dreamed of simplifying the expensive and time-consuming bid response process. However, these early applications were limited in utility. Early document authoring applications offered only a glimpse of AI’s potential for process automation and data insight discovery. Today, we are witnessing a second wave of AI applications for government procurement—not just speeding up how our industry works but fundamentally changing it. AI-DRIVEN SCOPE DRAFTING AND SUPPLIER RESEARCH The first step beyond simple prompting within an app like ChatGPT has been the integration of AI into existing products and workflows. Several eProcurement companies have launched tools to support scope drafting directly in-app. For example, OpenGov has introduced its AI-Powered Scope Drafting tool.This tool can take a brief prompt like “Community Engagement Consulting Services for the Department of Public Works” and generate a draft set of project requirements. This empowers buyers to harness AI within their existing procurement technology stack. OpenGov has also launched an AI supplier search feature. It takes an agency’s scope of work and matches it to supplier offerings detailed on websites, generating both local and national supplier lists. This tool, when combined with Procurated’s supplier scores (displayed directly in OpenGov Procurement), marks a significant leap forward in supplier discovery and vetting. AI-DRIVEN PROACTIVE CONTRACT PERFORMANCE MANAGEMENT Another area where AI is transforming the status quo is proactive contract performance management. Traditionally, contract managers relied on periodic 17 BUSINESS VIEW MAGAZINE VOLUME 11, ISSUE 12
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