AI for Procurement Officers – what do you need to know? 

There’s no doubt that Artificial Intelligence (AI) is transforming the way procurement professionals approach decision-making, efficiency, and risk management. Which is why there was no better time to host our recent UKUPC webinar, AI for Procurement Officers – what do you need to know? 

We were joined by representatives from Brodies LLP Solicitors to understand the opportunities and challenges presented by AI, and how it can be effectively integrated into supply chain management.

Catch up with the webinar recording below!

Understanding AI in procurement

Artificial intelligence (AI) is increasingly shaping how procurement officers operate. In the UK, there is no single legal definition of AI. Instead, the government focuses on how AI behaves: systems that adapt and act autonomously.

Unlike the UK’s flexible approach, the EU’s new AI Act defines AI systems strictly, classifying them by risk levels – from banned applications to high-risk systems with heavy compliance obligations. Procurement teams must stay alert to how these differences may impact suppliers based in different regions.

While AI can outperform humans in specific tasks like coding and image classification, it still struggles with common sense reasoning. AI investment continues to soar, proving it is no passing trend. For procurement, AI offers opportunities for efficiency but demands careful assessment to ensure tools are genuinely fit for purpose.

Risks and rewards of using AI

AI’s use brings many risks. A major challenge is transparency. Procurement teams must understand when and how AI is being used within supplier systems. Without this clarity, assessing risks becomes nearly impossible. Different AI models, like consumer-facing ChatGPT versus enterprise-grade Microsoft Copilot, behave differently and have distinct data protection implications.

Suppliers’ use of AI also raises accountability concerns. If an AI system makes an error, institutions may bear the responsibility, not the supplier. There are privacy and data security risks, especially when handling sensitive information like research data.

However, AI also offers significant rewards. It can enhance efficiency by automating routine tasks, support better decision-making with more consistent data analysis, and drive innovation across organisations. Used wisely, AI can free up procurement teams to focus on more strategic activities.

Due Diligence and supplier checks

Procurement teams must perform detailed due diligence when sourcing AI tools. First, it is crucial to clarify whether AI is the core offering or embedded within a broader service. Teams should ask:

• What specific AI technology is used?
• What data trains the system?
• How is privacy and bias managed?

Contracts should also be adapted for AI procurement. They must cover issues such as liability for AI-generated outputs, intellectual property rights over input and output data, data security obligations, and clear exit strategies to avoid vendor lock-in.

Top Tips for Procurement Officers

To safely and effectively use AI in procurement:

• Start with the problem, not the technology. Only procure AI where it genuinely adds value.
• Demand clear explanations from suppliers. If you cannot easily understand the AI’s function, it may not be appropriate.
• Focus on data governance: know where data comes from and how it will be used.
• Build in human oversight: AI should support, not replace, human decision-making.
• Get contracts right, including AI-specific clauses.
• Plan for ongoing governance, including training and regular audits.
• Stay curious and flexible: AI technology and regulation are evolving rapidly.

AI is already embedded in public sector procurement. With the right approach, procurement officers can harness AI’s benefits while managing its risks effectively.

Interested in learning more about AI in procurement? Stay tuned for our next update!