Africa’s procurement revolution starts with Artificial Intelligence

By John Karani

Procurement, largely unseen as a back-office function, hadn’t until now been through a technological leap since enterprise resource planning software enabled real-time visibility of stock and finance almost 20 years ago.

With technology shifting materially through the increasing use of artificial intelligence (AI) Africa has an opportunity to leapfrog traditional procurement models, accelerate institutional transformation, and reap the socioeconomic rewards.

The AI builds on a process that started in the 1990s with enterprise resource planning (ERP) systems, which is synonymous with names such as SAP, Oracle, and Microsoft.

This which enabled the move from paper to digital processes and expanded to offer e-sourcing platforms and process automation.

As data volumes grew with the term Big Data entering our lexicon, business intelligence processes built on top of ERP made it possible to expand procurement’s view of the entire value chain beyond inter-company linkages to interrogate aspects such as cost drivers and supply shortfalls.

AI changes that, it goes beyond presenting historical information for procurement teams to interpret, It analyses data from multiple sources, identifies patterns, predicts outcomes and recommends actions in real time.

Through AI, companies will not just have clearer insight into what happened but will be better positioned to anticipate what comes next.

ESG considerations can also be embedded directly into procurement decisions, which makes it possible for organisations to move beyond traditional cost-focused frameworks to incorporate environmental impact, ethical sourcing practices and supplier diversity.

Perhaps the biggest opportunity, however, is for governments, state-owned enterprises and private-sector organisations to leverage AI to strengthen transparency, combat inefficiencies, improve public procurement outcomes and make more informed decisions at scale.

With the right investments in digital infrastructure, governance frameworks and skills development, Africa can position itself as a global leader in next-generation procurement, supply chain management – and transparency.

This will enable the continent to secure financing at favourable interest rates, attract foreign direct investment, and bolster all our economies.

Before this can happen, however, we need to interrogate whether we have provided our professionals with the necessary digital literacy and analytical skills required to govern intelligent systems effectively.

This is a leadership, governance and professional accountability question, which is why AI will not replace procurement professionals but, instead, elevate them.

Because routine activities will increasingly be automated, uniquely human capabilities such as strategic judgment, ethical decision-making, relationship management, innovative leadership, negotiation and influence, risk governance, and systems thinking will become even more important.

It is vital to not only have skilled procurement professionals, but also strategic oversight as organisations tackle key governance and leadership questions such as how much decision-making authority should be delegated to AI systems, and who remains accountable when AI-generated recommendations lead to adverse outcomes.

Questions of data integrity are as important.

Getting this right as a continent will open doors for preferential finance, new import and export markets, increased foreign direct investment, stronger regional trade under the African Continental Free Trade Agreement, and greater participation in global value chains – all of which will contribute to economic growth at scale.

The African Supply Chain Confederation (ASCON) unifies professional African supply chain standards and networks.

The Author, John Karani is the Secretary General of the African Supply Chain Confederation (ASCON)