When Your Procurement Bot Ruins Your Reputation
AI Content Creation and AI Procurement Software may create content or collate data, but how does your reputation fair when it’s been misinformed?
Procurement departments are under pressure to have deep insights into their vendor base for compliance with an array of government and industry mandates. For companies with thousands of suppliers spread across the globe, it quickly becomes overwhelming to track compliance with anti-slavery, anti-corruption, diversity, labour management, and environmental regulations.
Companies are turning to automated vendor risk management platforms to monitor responsible sourcing obligations. As your organisation seeks vendors that meet its requirements, so do your customers. But as we’ve seen recently with AI writing tools like ChatGPT, automation is only as good as the information supporting the algorithms. One of the early criticism of AI content tools is they generate output that seems authoritative but can be flat wrong.
With the growing use of automated supplier data platforms and risk management tools, the procurement world could face the challenges of widely spread misinformation about suppliers and buyers. Your company could be damaged by seemingly correct information that’s widely shared across the Internet. The old adage, “A lie will go around the world while the truth is pulling its boots on,” is doubly true in the instant global communication era.
New automated risk management platforms tout the use of external information to help create a company profile. The systems monitor social media, news outlets, regulatory filings, financial information etc., to help rate your suppliers and your company for its customers. Are these ratings accurate enough to be trustworthy? Could a company be unfairly branded a high risk? Will you ultimately lose customers and revenue?
Vendor relationships are increasingly being automated. AI-powered data solutions gather information to help create a company profile. If you’re looking to diversify your vendor base, these tools can help you find suppliers that fit your criteria, such as size, ownership demographics, and location, for autonomous vendor master management.
Automated information gathering and analysis can help companies comply with mandates and their goals. Using these platforms, some companies find their supplier base is already more diverse than they originally thought, for example. The company may have minority ownership that’s not easily determined. Perhaps the company hasn’t applied and been granted the appropriate certifications. Perhaps the company has been certified but doesn’t document it clearly on its website or in its RFP responses.
If you feel like your company has been unfairly tagged with a negative label, there may be recourse. Some AI platforms like TealBook allow companies to add or correct information in their profiles. Dun & Bradstreet’s ESG Intelligence allows users to send a survey to suppliers to confirm existing information and ask for missing data to complete the supplier profile. Online reputation management specialists can help identify sources of incorrect or unflattering information and help reduce its impact on the company’s Internet presence.
Even if you’re not using these tools yet, your company is already likely in a database. Dun & Bradstreet’s ESG Intelligence solution has intelligence on over 41 million global public and private businesses. Clarity AI, an ESG monitoring platform, tracks over 100,000 news articles a day from over 30,000 sources. If your company or a supplier is in the news, there’s nowhere to hide.
D&B’s rankings are built on ESG data gathered from millions of globally trusted sources. With the granular data on specific ESG risks, users can connect the dots between ESG analytics and vendor performance.
Companies must gather and report data to comply with numerous reporting frameworks! Some data is readily available; in other cases, the technology is not quite ready to report on scope 3 emissions in real-time, for example.
The next frontier for procurement leaders is to move beyond risk management to reputation management. Many companies have come under fire for the behavior of their suppliers, from child labour in seafood harvesting to environmental damage in lithium mining. Compliance with mandates is the obvious route to both risk and reputational management.
In the terminally online, 24×7 news cycle culture, compliance may not be an adequate defense for involvement with a shady supplier. Today, a company’s value is determined as much by its brand equity and intellectual property as its assets and value creation. That’s why reputation management is becoming a larger financial consideration, especially for consumer-facing companies subject to the court of public opinion. Companies with a tarnished reputation can experience a decline in value as well as long-term brand damage.
Increasingly sophisticated AI tools mean it’s a brave new world. Algorithms are behind much of the information you see, from new blog posts to supplier data. In the early days of AI writing tools, we’ve seen unexpected bias creep in, as well as unverifiable assertions and data without sources.
It’s up to procurement pros to use these tools while being aware of the need for human oversight as algorithms learn to navigate the real world. Don’t let your company’s reputation be at risk from misinformation.
