7.3: Integration of Technology Tools

The technology revolution has caused procurement to adapt to new and current technological advancements. Tendering is one of the areas of procurement that became automated to facilitate better procurement performance by reducing paperwork and costs, which is the ultimate aim of any procurement function (Baily et al., 2015).

E-Tendering

E-tendering is the sending of requests for information and prices to suppliers and receiving the responses using the Internet (Raffa & Esposito, 2006). E-tendering systems improve process efficiency by the adoption of automation

E-tendering is justified on the basis that it assists in identifying opportunities and combines efforts in recognizing an aggregation of different users in and around the organization, reduces the overall cost of the transaction by reducing paperwork, reduces off-contract expenditures by using technology to create awareness of available contracts (Plant & Valle, 2008; Gathima & Njoroge, 2018). The introduction of e-tendering tapped into competitive pricing and encouraged fair marketing methods.

It also enabled automatic commodity auctions of agricultural products, provided transparency, reduced transaction time, and improved market income (Pavithra, Gracy, Raka, & Ganesh, 2018). The investment in e-tendering has facilitated productivity and profitability within the construction industry, where most Information and Communication Technology  (ICT) capabilities have been implemented.

Even though e-tendering streamlines the procurement process and boosts efficiency with access to a higher-quality vendor pool, most public organizations have not fully embraced it. Therefore, the benefits gained vary from organization to organization. For e-tendering to function as an e-supplier management tool, certain components of automatic supplier screening, virtual supplier registration, automatic evaluation and selection must be integrated (Abdullahi et al., 2019). These cater to supplier base optimization, mitigation of supplier risk, and reduction of total cost of ownership while promoting effective buyer-supplier relationships for better quality and services (Baily et al., 2015). Inadequate utilization of e-tendering leads to corruption and an overall increase in tendering costs.

Artificial Intelligence Procurement Assistant (AIPA)

This excerpt is from a paper presented at a conference introducing the Artificial Intelligence Procurement Assistant (AIPA), a system co-developed with Solita, a Finnish software company. AIPA is one of the AI procurement tools being used in Europe. Public Services and Procurement Canada is developing artificial intelligence tools to modernize supply methods. Current developments have included predictive modelling with requests for information, bidding invitation qualifications and procurement sourcing lists. The next steps will continue the development and refinement of these tools so that they can be used more broadly with PSPC services.

In modern business, maintaining competitiveness and efficiency necessitates the integration of state-of-the-art technology. The Artificial Intelligence Procurement Assistant (AIPA) leverages Large Language Models (LLMs) and sophisticated data analytics to enhance the assessment of procurement call bids and funding opportunities. The system incorporates LLM agents to enhance user interactions, from intelligent search execution to results evaluation.

In procurement, conventional manual bid assessment procedures often grapple with inadequacies. AIPA emerged within this context, aiming to transcend the limitations of the status quo. Making adept use of LLMs, with ChatGPT taking center stage, AIPA swiftly comprehends intricate bid documents, applies predefined evaluation criteria, and distills crucial information for expedited human decision-making on whether to accept or reject proposals. One of AIPA’s distinctive strengths lies in its consistent application of evaluation criteria, eliminating subjective deviations. This stands in stark contrast to the inherent variability of manual evaluations, where individual interpretations can diverge significantly.

Leveraging AI capabilities, AIPA has implemented an efficient way for users to find and assess relevant procurement notices from the European Commission’s TED portal. The goal is to accelerate the procurement process by utilizing existing AI tools to assist businesses in making informed decisions about suitable procurement opportunities.

Overview of AIPA’s key features include:

User Interface (UI): The AIPA UI serves as the primary point of interaction between users and the platform. Users who are representatives of businesses access the platform through this interface.

User Registration and Profile Creation: A core functionality of AIPA is enabling users to register and create profiles. We have implemented an AI-assisted process to guide users in providing all the necessary parameters for effective procurement notice searches.

Result Filtering and Evaluation: We have implemented a system that filters the search results obtained from TED and other similar procurement websites and utilizes them for evaluation.

List Creation: Our platform creates a list of the most suitable procurement notices based on the filtered and evaluated search results. This list is presented to the user, providing a consolidated view of opportunities that match the user’s requirements.

ChatGPT Agents: As a core of AIPA, we have integrated several ChatGPT agents to execute the required tasks. These implemented agents assist in profile creation, parameter extraction, search execution, result evaluation, and justification generation. This component interacts with the TED portal to retrieve relevant procurement notices and performs AI-based analyses to enhance the overall quality of the procurement suggestions.

AIPA may act as a valuable resource for businesses seeking efficient and effective ways to navigate the complexities of procurement processes. By integrating ChatGPT seamlessly, we assist users in finding procurement opportunities that align with their specific needs, thereby simplifying and expediting the procurement journey.

Attributions

“7.3 Integration of Technology Tools” is remixed and adapted from the following sources:

“Electronic Tendering and Organizational Performance of Parastatals in Nakuru County,” copyright © 2023 by Wanjiku Ruth Nyokabi, Oteki Evans Biraori, Njogu Grace Wacera from East African Journal of Business and Economics, licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

“Artificial Intelligence Procurement Assistant: Enhancing Bid Evaluation,” copyright © 2024 by Muhammad Waseem, Teerath Das, Teemu Paloniemi, Miika, Koivisto, Eeli Räsänen, Manu Setälä & Tommi Mikkonen from Software Business 14th International Conference edited by Sami Hyrynsalmi, Jürgen Münch, Kari Smolander, Jorge Melegati, licensed under a a Creative Commons Attribution 4.0 International License, except where otherwise noted.

The multiple choice questions in the Checkpoint boxes were created using the output from the Arizona State University Question Generator tool and are shared under the Creative Commons – CC0 1.0 Universal License.