What does Chat GPT mean for the procurement industry?
As procurement consultants, we must keep up to date with industry trends and innovations. So naturally, we’ve been testing how ChatGPT can help us to support our customers. We conducted a mini-study to test its capabilities and conducted a poll on LinkedIn to find out if AI is being used by procurement experts. Here are our findings.
AI-generated procurement documents
We asked Chat GPT to generate a license agreement, an RFQ template, and a Supply Contract based on limited information for an unknown supplier. The answers generated by ChatGPT resulted in short summaries of the most general contractual clauses you would expect to find in these procurement documents.
Obvious shortcomings
However, Chat GPT clearly missed some essential points, and there were obvious shortcomings in the formulation and wording of the clauses presented. It was also clear to theThree P procurement experts analyzing the results that it lacked critical insights nor was it written in professional contractual language. Above all, the results lacked the nuance of experience, practical knowledge and personal know-how that procurement and legal professionals have gained through years of working within their respective professions.
Perhaps we shouldn’t be surprised by this. It is, after all, a machine that skims the internet to create texts with no knowledge of whether the data gathered is factual or indeed written by an expert. Multiple tests also generate similar results, and it does not take very long to detect when content is produced in Chat GPT. But that doesn’t mean to say we should ignore it.
Always review and develop
Our mini study demonstrated that Chat GPT can generate basic templates within minutes. Is this effective? – Definitely. But the efficiency clearly comes at a cost to quality. There are obvious limitations, most strikingly a lack of practical knowledge that comes with being an experienced procurement professional.
Chat GPT generated content therefore requires critical peer review and professional knowledge to ensure that the results provided are used correctly and are beneficial to a procurement organization. There is also a need to complement the results with information that matches the procurement organization's goals and objectives, which requires experienced procurement professionals. You can think of what is produced as baseline content, a starting point for further development.
Continued research
In conclusion, fast results can be obtained using ChatGPT, but the content cannot be trusted and must be reviewed with a critical eye. As experienced procurement professionals we will continue to stay up-to-date with new technologies, gain knowledge and report how they can be used to support our customers’ procurement organizations.
LinkedIn Poll
So that's our personal research but what did those who answered on LinkedIn have to say about using AI at work? It's almost a 50/50 split between those who do and don't but of those who replied no, half want to start using AI for procurement.
Test your skills
Finally, here's a quick chance for you to test your skills. Can you figure out which of the three clauses below was generated by ChatGPT?
- “PaymentDue Date: The payment for goods or services provided by the supplier shall be due within 30 days from the date of receipt or completion of the delivery, unless otherwise specified in the contract.“
- “Purchaser shall pay purchased Goods thirty (30) days after approved delivery and receipt of invoice.”
- “Payment shall be made at the latest 30 days after the Customer’s receipt of a correct invoice according to section 13.5 below.“
To find out the answer or talk more about procurement, contact our expert.
