The headlines on the negative impacts of artificial intelligence have come thick and fast in recent months. Whether it be Claude developer Anthropic warning of the “catastrophic or existential risks to humanity” ahead of a potential IPO, or concerns that the ‘AI bubble’ could burst any day now as costs rise and the profitability of the main providers remains uncertain.
As part of Procurement Leaders’ CPO Vision 2027 report, which offers leaders insights into the risks and opportunities that result from global megatrends, we explored some of the issues that CPOs will need to take into consideration over the coming months.
From rising costs, with some experts expressing concerns of a tenfold price increase over the first half of next year; to the risk of staff complacency with AI outputs or the threat of agents going rogue, there are several important risks for organisations to manage.
The business will rely on procurement to play a key role in the success of AI – both in how it manages technology providers but also in acting as an exemplar for the rest of the enterprise to follow.
While I’ve largely focused on these risks, this isn’t to say the outlook is all doom and gloom. AI remains a powerful tool at leaders’ disposal as they look to maximise the impact of their teams. Last week, a procurement excellence lead was proud to share the impact of automation on their function during a Procurement Leaders community conversation.
“AI is not doing the thinking for me. AI is doing the execution… The policies are becoming the master brain documents and I’m just outsourcing the execution to AI,” he said. “That gives room for my category managers to better solve problems, not spend time chasing people.”
Ultimately, it’s a case of managing risk and reward, an issue that requires uniquely human judgement.
One quote from Accenture CPO Binny Mathews (pictured above) that featured in the CPO Vision report, sums this up nicely. “All the insights could be provided by AI, but the decision is still yours,” he said. “So we say not ‘human in the loop’, human in the lead. Human in the lead means this: you’ve got to lead this, you’re not going to be dependent on AI to provide judgement calls, or take decisions on your behalf.”
A few months ago, this column explored the ‘AI paradox’ procurement chiefs face as they scale up their use of the technology and whether the end result will be leaner procurement functions or freeing staff to focus on high-value, strategic activities.
That paradox could just as easily extend to the technology itself, not just its impact on the procurement function. For every problem AI solves, it gives rise to new questions to answer and risks to mitigate. As the technology continues to advance, the risks and opportunities will only increase.
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