<center>[](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)</center>
As I’m sure you’ve noticed, everyone goes crazy for big tech buzz words like Blockchain and Artificial Intelligence (AI). The conversation can fall anywhere on the spectrum, from believing that technology will save the world or ruin it. Both sides can be reasonably argued. There is evidence all around us showing how much our lives can benefit from advancements in technology. Let’s take laptops for example; how would we be able to get away with working from home on Fridays in sweatpants if it weren’t for laptops… JUST KIDDING, but only slightly. On a serious note, I think it’s incredible that we can bring affordable, portable computers to remote parts of the world and enable people living in underdeveloped countries to get an online education or work remotely. On the other end of the spectrum are those who fear the impact that technological advancements will have on our economy — specifically, unemployment. Are we going to become so efficient and reliant on technology that it will eliminate jobs throughout every class of society? A scary thought, but maybe we don’t need to worry about being replaced by robots and algorithms as much as we think. A lot of these technologies are only just emerging. As we learn more about their capabilities, and how to best implement them, we will be able to better anticipate the dangers that come along with each. What I predict is that technology will not eliminate work but instead cause a change in the kind of work being done by humans. Within this article, I am going to talk about AI and blockchain and how I think they can positively impact procurement, as well as other functions, without completely disrupting the demand for human employment.
[document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)
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## Artificial Intelligence (AI)
AI is all over the place right now. Well, most places, and from what I can see, procurement isn’t necessarily capitalizing on the technology at a great scale just yet. The way I would describe AI is that it’s an algorithm that identifies commonalities between two sets of data or can use a set of rules to identify any circumstances that do not meet those rules. I’ve seen AI used a lot within the HR function, especially in recruiting. AI can be used to identify keywords within candidate resumes based on the premise that those keywords have been present in the resume of a candidate who was previously hired and successful in the role. This is a completely new approach to sourcing resumes where we can essentially learn from our past success and now review a pool of candidates who are more likely to be successful in a role because of their similarity to someone else who has already succeeded in that role. That being said, this part of the recruiting process does not account for the screening of soft skills and culture fit for the company. So don’t worry, the need for human screening is still extremely critical. All we’ve done in this example of AI utilization is eliminate the transactional sourcing process where humans touch creates little value over automation through AI.
[document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)
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When I think about AI in procurement, I believe there are many opportunities to implement this technology. Based on my experience, the greatest value can be derived if AI is applied to the contracting process. If you read my first article, you know how I fell about contracting. It’s a long, arduous process but highly necessary for risk mitigation. The reason that contracting takes so long is that risk is defined differently based on the circumstances of each engagement with suppliers. Risk is not one size fits all. However, many organizations use a few standard contracts in order to maintain consistency and ensure all agreements cover the most common and necessary clauses. These clauses are what cause a lot of the back and forth with suppliers, and a lot of times the clauses that we are negotiating aren’t as necessary as we think. Yet we pass documents to and from supplier and buyer for months until we find a middle ground we can both live with. Now imagine we’re using AI and the purpose of the algorithm is to identify completed contracts that are similar to the one we are working on. We can identify executed agreements where we found that middle ground already and just start there, eliminating months of the back and forth.
[document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)
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## Blockchain
If you don’t know much about blockchain, welcome to the club. I’m still learning a lot about the technology, but I have a pretty good handle on the key characteristics that make it so attractive. Bear with me as I describe the technology in my own words. The first thing you need to know is that blockchain is used to record transactions. It’s oftentimes referred to as a ledger. This may sound like any other ERP (Enterprise Resource Planning) system, but the difference comes when we talk about the process of recording the transactions and the unique qualities that govern each block within a blockchain. First, regarding the process, blockchain is described as being an unregulated, distributed ledger that is governed by the masses and not one entity. When someone within the blockchain submits a request to record a new transaction, or block, the coding that creates the new block is done by one of many coders within the blockchain network; other coders then validate the work done by the original coder or ‘miner.’ Now let’s look at the blocks themselves; these coders I just mentioned do their due diligence to validate the transaction being requested and, once their work is confirmed, they create the block and it becomes part of the blockchain. Once a block is created, it cannot be deleted or changed. This is a HUGE benefit for transactions that require transparency and accountability. When you remove the ability to make adjustments to each transaction, you’re maintaining a clean chain of activity. By not having a single entity in control of the blockchain, you reduce the opportunity for corruption. Another key characteristic of many blockchains is the ability to encrypt the information within a block to ensure it is confidential to all except those who should be seeing the information. Some blockchains use smart contracts, and this is where things get really interesting. I’d describe smart contracts as a rule or rules written within a blockchain that allows information from transactions or blocks to be automatically shared based on the terms of the smart contract.
[document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)
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That was a lot, so let me give you an example of how procurement would possibly use blockchain and its valuable characteristics. I’d hate to waste a good example on something like using blockchain to monitor invoice transactions because that doesn’t do the technology much justice. Let’s take a sourcing event for example; if you’re interested in a clean archive of transactions or interactions between your organization and potential suppliers then you can use a blockchain to administer RFPs and track negotiations. This would also be a great source for archiving information, and for aggregating it for that matter. Not only would this allow for transparency for each transaction’s back and forth with all suppliers, but you’d also be able to ensure a certain level of ethics were maintained. Smart contracts could be a strong tool when sourcing too. Imagine writing a rule that states any proposal that exceeds one million dollars automatically triggers an automated counteroffer to the bidding supplier. This would allow the sourcing professionals to spend their time on only the most strategic parts of the negotiation, which oftentimes come when you’re at a place when you’re close to your most desirable outcome.
[document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)
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<center>[](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)</center>
To close this article, I’d like to put your mind at ease. This is, of course, assuming that I’ve convinced you of the viability that both AI and blockchain have within the procurement function. Technologies like these are most definitely coming, and they’re going to change the way we work forever. That doesn’t mean that the change will result in lower demand for work to be done by people versus robotics and algorithms. Historically, as technology has advanced the workforce has grown. As we find more efficient ways to manage work, by using alternative solutions to complete mundane or automated tasks, people are reassigned to more strategic activities. This kind of pivot has been known to actually increase the rate of employment and the development of innovation. It would be within our best interest to stop talking about technology taking away our jobs and start planning for how we are going to train our workforce to adapt to the need for strategic thinking, lifetime learning, and learning agility.
[document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0)
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#### _Note: This document with all the information in it is shared here to boost our knowledge of blockchain and crypto ecosystem, the original document can be found in [document source](https://medium.com/datadriveninvestor/the-future-of-procurement-and-tech-the-possibilities-are-endless-6cd85860b1f0), I have on ownership right over the document._
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