The impact of generative AI on how procurement operates and the supply base
With the release of ChatGPT in late 2022, the world's view on the speed at which AI will disrupt industries changed overnight. It captured everyone's attention because (a) it's a significant change in capability, (b) it can solve a huge range of problems, and (c) the conversational interaction model unveils the AI process at work. These factors make generative AI (gen AI) significantly different from the AI that has been more subtly changing our lives in applications such as speech recognition, navigation, and social media.
This release wasn't just a major shift for the public but also for industry experts. McKinsey & Company's prediction of when AI would attain human-level capabilities accelerated by over 10 years after ChatGPT's launch. This sudden pivot in expectations is challenging all industries and business functions to reassess the opportunities and risks from AI at an unprecedented rate. Some functions have a tremendous opportunity to streamline their work and unlock new sources of creativity. In contrast, companies whose business models are based on prior versions of AI could see their entire business disrupted.
In addition to the typical challenges associated with a new technology, generative AI also poses questions in terms of ethics, accuracy, and transparency. The flood of gen-AI technologies such as Bard, Llama, and a host of purpose-specific tools means the combination of rapid change and opaque decision-making presents unique challenges for companies.