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MANAGEMENT UPDATE.

UNLOCKING AI POTENTIAL FOR PROCUREMENT

It’s easy to drown in all the advice floating around about how to achieve the benefits of using artificial intelligence while avoiding the challenges. But an especially important, and useful, idea emerged from a collaborative report jointly published this month by the National Association of State Chief Information Officers (NASCIO) and the National Association of State Procurement Officials (NASPO). 


This is it: “Strong collaboration between procurement and IT departments is essential for the successful deployment of AI technologies.”



The report is encouraging about the many benefits that artificial intelligence produces for procurement – faster action, cost reduction, better spending and market analysis, more effective contract management, and fraud detection. But the main focus is on the way to work together to overcome obstacles that exist to AI deployment, including potential bias, shaky security and poor privacy protection.

To avoid the hazards that lead to policy and management bias, as well as compromised privacy and security, the report provides counsel in the following areas:


Data Protection: The security and confidentiality of sensitive data requires navigation of privacy laws with stringent data protection standards to “safeguard against breaches and unauthorized access.”


Ethical Concerns and Bias: Algorithms need to be carefully designed and monitored for bias, with bias mitigation strategies implemented with ongoing oversight and fairness in AI-influenced decision-making.


Accountability and Transparency: AI systems and operations should be transparent so that stakeholders understand how decisions are made.


Technological Maturity: Since many AI solutions are still works in progress, their “maturity and reliability” needs to be monitored, evaluated and tested to make sure they are ready for “successful deployment” in public procurement 


Navigating AI Procurement Complexity: Newly available artificial intelligence approaches need to be compliant with existing policies. Deployment also includes navigating “complex regulatory frameworks”. 


In addition, the report emphasizes the importance of comprehensive AI policies, using a phased-in approach with well-defined (and manageable) projects; engaging vendors and suppliers; prioritizing training, and making sure to monitor, measure and evaluate AI systems and performance.


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