Confused by all the AI hype? Here’s a quick guide on AI and how it can help you be a more effective procurement leader.

AI vs Agentic AI

“Artificial intelligence” is a term that causes a lot of confusion, and for good reason. All in all, it’s used as a catch-all term more than a precise, scientific one. Any program or automated system meant to model intelligence, solve a problem, or perform a complex task can be called “AI.” But for you as a procurement leader, there’s only one type of AI that matters: Agentic AI.

What is Agentic AI?

Agentic AI is a system designed to solve a goal or take an action independently. Agentic AI is built on top of a Large Language Language Model (LLM), a type of AI trained on a huge collection of text to respond naturally to human language — think Claude, or ChatGPT. Agentic AI models use LLMs and external tools to complete complex tasks, like gathering data, sorting through articles for mentions of a particular company, or scheduling meetings. 

How is Agentic AI Different From Ordinary LLMs?

LLM coverage tends to overstate its capabilities, portraying LLMs as brilliant, autonomous, thinking machines. But LLMs are more like very eager, very fast, and not very bright interns than electronic superbrains. If you give an LLM very clear instructions and take the time to train and correct it, it can save you a lot of work. But without lots of supervision, it will miss important context, “hallucinate” false data, or misinterpret your instructions.

Agentic AI takes the language capabilities of an LLM and adds consistency, autonomy, and specialization to it. It can take a particular complex task that requires multiple tries to get an LLM to perform correctly, and do it correctly and automatically every time, using whatever other tools are necessary. 

How Does Agentic AI Help With Supplier Intelligence?

For procurement, Agentic AI helps find, organize, and report on supplier data. AI-powered supplier intelligence platforms like Craft use integrated datastreams to collect data on vendors. The user selects which risk categories are important, and the AI pulls data from the streams, populates vendor profiles, and analyses that data based on a user defined risk framework. Agentic AI can also draft executive reports, and monitor for risk signals as they emerge.

This saves a lot of time and tedious work. It can review thousands of data points almost instantly, capture data more accurately than humans can, and compile it in a way that’s easy for humans to consume. 

That makes you quicker and more agile. You can onboard faster, react to changing market conditions, and monitor vendors more effectively. It also unlocks strategic benefits, enabling you to analyze vendor intelligence broadly and deeply for more informed decisions. Finally, it makes your workflow more flexible, since you can quickly gather new vendor data or look up alternative suppliers at any time. 

What to Look For in AI-Powered Supplier Intelligence

Comprehensive information

Your supplier intelligence program should be able to provide a complete picture of suppliers and their networks, with integrated datastreams providing information on every category of risk. To give you an idea, Craft has over 500 datapoints across more than 1,300 datastreams, including:

  • Demographic and firmographic information
  • Compliance 
  • ESG
  • Financial reporting
  • Security and cybersecurity
  • Press coverage
  • Personnel and exposed persons
  • Inherited risk from up and down stream relationships

Even if you’re not using all of this information at first, having it available is still very useful, because AI-integrated platforms like Craft will monitor your suppliers for risk across all these dimensions. 

Usability

Look for a platform that’s intuitive and easy to navigate. Agentic AI should be able to draw out the most relevant information in each category, letting you view key risk factors at a glance, dive deep into individual categories, and compare multiple suppliers with ease. 

Pay attention to how it surfaces new risks. Is the process to select which risks to survey intuitive? Is it easy to see which supplier have new risks  throughout your vendor portfolio? One tool Craft uses to simplify risk analysis is Supplier Portfolios. 

The concept is simple: you can organize vendors into portfolios based on criticality, region, size, line of business, or any other factor that makes sense for your company. Risks show at the portfolio level. This lets you triage risks by portfolio, as well as by type and severity, even if you have hundreds of vendors. You can address urgent risks for critical suppliers, without getting overwhelmed by minor issues.

Analysis & Reports

A good report doesn’t have to be creative, it doesn’t have to be exciting, but it does have to provide all the important risk information on a company in a way that’s readily digestible by a human reader. 

It’s exactly the type of task agentic AI excels at, and your supplier intelligence should do it perfectly. Look for high-level and section summaries that give you everything you need to know at a glance, and section-by-section breakdowns with enough detail to answer all your stakeholders’ questions. 

And it should tell you exactly what to pay attention to — clear, prioritized risk signals based on traceable supplier intelligence. 

Agentic AI That Drives Your Workflow

Researching and reporting on supplier risk is probably the most time-consuming, tedious part of your job. With Craft, you can stop wasting time on busy work, and start focusing on the tasks that showcase your knowledge and leadership. You’ll be able to better compare vendors, optimize your vendor portfolio, improve vendor management, and reduce risk, all while accelerating your vendor onboarding. 

Contact us to demo the industry’s leading supplier intelligence platform.