AI in Procurement: Community allows for reliable possibilities

‘We need to understand what AI is,’ says Michael van Keulen, CPO and procurement expert at Coupa. As an advocate for procurement from a software perspective, Michael understands the merits of Artificial Intelligence. However, that doesn’t mean all AI is the right AI – for you and your organization. The procurement veteran urges you to ask yourself: what data is the AI being trained on, and where is your data going?

Mistakes as learning opportunities

First things first. Where did Michael himself come from? Starting as a consultant, he made the change to finance first and then quickly moved into procurement. He explains: ‘I really enjoy constant learning. I love change and transformation. Consulting is all about advising and implementing improvements. That is what I love to do: identifying an issue and looking for the best changes to make in order to maximize opportunities. But as a consultant, you’re onto the next project after doing so. I was looking to see the full impact of what we advised or implemented and also learn from my mistakes.’

Michael, however, prefers to see mistakes as “learning and development opportunities”: ‘Throughout my career, I’ve been fortunate. I truly believe in being at the right place at the right time. But you also need to be bold and control your own destiny.’ He believes in taking risks while scoping out opportunities. Such risks are preferably calculated, but sometimes uncalculated risks come into play.

His path ultimately took Michael to Coupa, the leading total spend management organization in the world. ‘Our key focus is how to move organizations forward and maximize their potential, or as we call it, be a margin multiplier,’ Michael explains. ‘How do we drive change, optimize spending, and generate value? In doing so, how do we learn from each other, and how do we celebrate success together?’

Relying on your community

What ultimately drives the organization is the community, he stresses. ‘We are always looking for ways to make our platform better. In my position, I support the procurement team and play a role with our product team, but I spend most of my time advocating for the profession I love: Procurement. The ideas must come from a group – most importantly from our customers. Their feedback is of great value and always gets prioritized. That’s the beauty of Coupa: you can’t customize, but you can configure. Our product comes together out of our product team, customer feedback and best practices.’

That brings us back to AI. ‘Everyone talks about it,’ Michael begins. ‘And everyone uses it, personally as well as professionally. However, you have to be careful. We now see that AI needs to come from a trusted, controlled, and governed environment. Data has to come from and go into reliable sources. We need to be careful with where we send and receive information from because somebody is making money.’

In terms of procurement strategies, Coupa is a reliable source. ‘We got lucky in having a great vision over a decade ago,’ Michael jokes. However, Coupa’s leverage is seriously wide: ‘We started building our platform more than 15 years ago with the idea of creating a real community. Today, our architecture allows us to have a really large and actually reliable data set of $6T+ in spend. More importantly, we have permission-based access to data across 10+ million suppliers and buyers to benefit our entire community.’

Driving innovation

How can AI benefit procurement? ‘In the next 24-36 months, the repetitive, mundane, “why am I doing this again”-work will be done by AI,’ Michael predicts. Think of tasks like reviewing contracts, paying invoices, building category plans, and even negotiating. The mundane will go, but the drive will stay. ‘I believe procurement will always drive innovation and establish real relationships. AI will give you insights, but you still need to act upon those. You are the one who needs to drive behaviors and change these when necessary. Change requires people.’

That’s why, next to Michaels’s procurement work, he is adamant in spreading his experience, but more importantly, learning from his peers. Coupa and Dynatos have been working together for x years. ‘Without partners, we can’t deliver or scale. We need advocacy and shared knowledge.’

Raising the bar

And then? Michael never ceases to be amazed by the success of the right procurement process: ‘The amount of value you can unlock if you execute procurement properly is huge. You can see endless possibilities through the lens of people, technology, and the right operating model.

In driving such change, Michael sees a difference between the use of technology in Europe compared to Asia, Latin America, the US and parts of Africa. ‘I see a high level of procurement in terms of the profession in Europe. But the acceptance of tech as an enabler remains low compared to other parts of the world.’ Michael urges: ‘We need to raise the bar, or we’re going to get left behind. Be bold! Be assertive! And most importantly: ask for what we really need.’