AI: Prove it Works!
Navigating the AI-Hype Cycle: TPRM Market Insights
Hello and welcome to the latest version of 3VRM ’s Digital Dialogue where we take an informed look at the digital trends in TPRM & Procurement with a few diversions along the way. If you are a new reader, you can read our previous posts here: https://www.dhirubhai.net/feed/update/urn:li:activity:7186653204007243777
We thought we’d use this blog to share some interesting and emerging themes in AI. Since our last post on the topic, we’ve been grateful to host our first face to face Digital Dialogue in London which gave us some valuable insights into the challenges of our attendees and their organisations on using AI to drive efficiencies. Massive thanks to all the attendees who were happy to allow us to harvest their data to support this blog, in exchange for a few drinks…
I think this is indicative of where we are in the AI-Hype cycle. There is a lot of interest, a lot of organisations know they will be needing to use AI in some form or another, but currently the actually-achievable-beneficial use cases are thin on the ground. Plus there’s always that niggling feeling that we’ve all been here before - I don’t know about you, but I am still waiting on Blockchain transforming everything as I was promised!?
So what does this mean in practise for our industry? Well, essentially the issue lies within translating good ideas into business cases which is proving a tough challenge, even more so with the financial challenges organisations are seeing in terms of transformational investment.
Consultants and providers need to see some big improvements with not only explaining the technology but helping to create these realistic business cases. And by realistic, I mean realistic; business cases that promise hundreds of hours of savings but introduce additional licence costs, development hours or different skilled resources need to be reviewed in totality and not see spiralling costs snuck in by the back door.
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This stat is quite revealing, as most attendees based this upon their general experience of AI rather than just at a business level. The overselling of current AI functionality is endemic, whereas the lived experiences of individuals is very different. We’ve all experienced some of the terrible Chatbots that don’t really do what they are supposed to, or the completely random responses that ChatGPT throws out at times. The group also shared a few war stories of solutions being sold as “AI” which then turned out to be a hugely labour-intensive keyword search!
Perhaps unsurprisingly in a room of Third-Party Risk Management (TPRM) specialists, the overarching interest was in Risk Assessment & Monitoring. AI driven risk analytics and scoring models, supported by either co-pilots or Digital Adoption Platforms (DAP) to improve user experience would be an incredible leap forward in TPRM. While there was interest in how AI could transform other key Procurement elements including Sourcing & Contracting, early indications are positive that AI can make a real difference to the TPRM aspects in particular.
So, in summary, what are the key themes in H1?
It is fair to say that the main topics at both our event and also other discussions with clients is one of excitement but realism with a tinge of cynicism. AI offers huge possible advantages but comes with a range of very real challenges. In particular creating business cases and proving the total value, also the aspects around control, management and oversight of data which are top priorities for most organisations.
Myself and the team at 3VRM have been working on a review of AI in TPRM which will be published in the coming weeks. If you are interested in seeing an early version then please do get in touch with me ([email protected]) or just reply to our post.
As we are quickly rattling through 2024 (let’s not mention how the New Years resolutions went) we are supporting some clients at creating realistic business cases and digital strategies for 2025+, so if you are in the same position and need some thoughts, then please do contact us for a chat.