AI for negotiations OK or IDK?
2001
When I hear the words Artificial Intelligence (AI) my mind jumps back to the 1968 Stanley Kubrick film, “2001: A Space Odyssey”. In the film, the HAL 9000 supercomputer decides he doesn’t like the way things are going with the mission. He is given a simple instruction and then utters those famous words, “I’m sorry Dave. I’m afraid, I can’t do that”. If you haven’t seen the movie, I won’t spoil it.
But the important thing to know is that the HAL 9000 does some nasty things including attempting to kill the humans onboard. And it is all based on conflicting and misleading information programmed into the computer. This proves again the adage, “Garbage in. Garbage out”.
AI technology has crept its way into many of our daily activities. Recently, and for some time, self-driving vehicles have been the gold at the end of the rainbow for the auto industry. But even if we are not quite there, your car uses AI when you ask it for directions, and it routes you around any traffic jam or construction. We have smart thermostats, smart TVs, smart refrigerators, smart speakers, and smart home security.
But just how smart are these devices? Somebody had to program those things, so the device is only as good as the programmer. I can say with high confidence I would trust a smart thermostat not to turn my house into a sauna. That seems like a simple programming task. But I am not sure I am ready to trust a computer to take out my appendix.
Are You Ready?
The real question is, are we ready for AI to take over important business decisions like contract negotiations whether you are a supplier or merchant? A 2018 article in Forbes asked similar questions. “Why waste labor on supply chains when you could have AI optimize them?” Our fear is that it’s not quite ready for prime time. Optimized for Target may not be optimized for your company.
Rohit Tandon, managing director, and global AI & analytics services leader at Deloitte, issued a warning when deploying AI for supply chain issues. He said, “…it’s a good idea to start with a small and narrow scope [until] the results show their accuracy and value.”
Walmart began automating its contract negotiations process using AI software built by Pactum, a U.S.-Estonian startup. The company is using an AI-driven chatbot to negotiate contracts with human suppliers. The project kicked off at Walmart Canada. As you might expect, some vendors are just fine with this arrangement. Others are clearly not as happy.
I will admit right up front that I have not yet dealt with this new system directly. But I do know how I feel when intercepted by a bot or an automated voice when I am trying to do something important or time-sensitive such as contract negotiations. And I have the same skepticism as the author, Jesse Damiani of the web magazine Freethink. He said he is “…not convinced that a bot can fully understand and appreciate the nuances of human language."
HRG is absolutely in favor of progress and innovation. We are prepared to be there for our clients when something goes wrong. Like you, when negotiating with a contract bot, we never want to see or hear the words “I’m sorry Dave. I’m afraid, I can’t do that.”
HRG helps suppliers who want to recover money due to them from retailers as a result of invalid deductions, fines, or underpayments by carefully auditing event results, related activities, and agreements. Unlike our competitors who rely on catching obvious mistakes with computer programs, HRG uses proprietary technology and highly experienced auditors to fully evaluate and process our clients’ claims. HRG is unlike any other competitor in that we represent all categories across all the major retailers.
To find out more about HRG, please contact sales@hrg-audit.com.
