Helene Laffitte:
Hey there. Welcome back to the Procurement Game Changers. Get ready to meet Offer Hacmon our fantastic guest on this podcast. With his impressive background in technology and cloud procurement, Offer is your go-to expert for all things partnerships, negotiations, and strategic advice from cybersecurity to artificial intelligence and Fintech. He’s seen it all. As the head of technology and cloud procurement at NICE Limited, Offer has led global teams and shared his with wisdom with top companies. Join us for an engaging conversation as Offer, an MBA graduate with a passion for global consulting, shares his personal experiences and insight in dynamic world of technology procurement. Welcome to the show, Offer.
Offer Hacmon:
Thank you very much, Helen. Pleasure being here.
Helene Laffitte:
All right, so let’s start with what led you to procurement.
Offer Hacmon:
Well, John Lennon once said that life is what happens when you’re busy making other plans. I think it’s a similar story. Procurement was not on my career path to be honest. I studied law and when I graduated, I started work for a big law firm in Tel Aviv at first as an intern, and after that as an associate for a few years. It was a great time with great coworkers and clients by practicing commercial litigation and actually dealt with some of the most interesting cases of the time.
But with that being said, after some time I felt that the thing that I like to do, the things that are more of my interest, let’s say, is the part of the business, the negotiation, the discussions with the client, the ability to close deals. These are the things I like. So actually with this understanding, I decided first registered to an MBA study, and second to be more open to hearing about professions that mix between my legal expertise and my business desires.
So after some time I got a call from a recruiter in a tech company, and it offered me to join the tech procurement department of this company as a contract and procurement manager. I heard about it and it sounds interesting. She was very convincing. So I decided to jump into the waters, as I said, and I joined. So this is how I get in, but you’re not staying in a certain profession if it’s not interesting. And I think that I stayed in procurement and this is what I’m doing today, though not in the same company, the same role, but still is because I found procurement and tech procurement specifically as something that is super interesting.
you have the chance to deal with a variety of topics. One day I’m dealing with cyber and the other day with Fintech and other day with AI and other things. You are in some areas you’re really touching the edge of technology and you’re in a place where you can influence the company bottom line. And it’s super interesting and this is why I actually stayed. On top of that, I’m also leading a group of professionals, which I think is the best in the industry. So this also something that very interested in this specific area.
Helene Laffitte:
So, it’s funny to say that in all the interviews I did for the podcast, the answer is pretty much always the same. That it was not in my plans, I didn’t know I wanted to do procurement. And then here we are, all of us. This is a funny thing.
Offer Hacmon:
Yeah, it’s a good place.
Helene Laffitte:
Well, now there are training and higher education programs for procurement, but that was not necessarily the case 20 years ago. So maybe that explains why the old procurement people didn’t start it as that. But that’s maybe just my interpretation.
Offer Hacmon:
It is, but it’s even more than that. I see procurement as something that is very wide. You need to be with a very wide knowledge on various topics in order to do it correctly. There are some basics that you need to know, but at the end of the day, you need to know about many things, starting from product and R&D and legal and other things, then in finance, you name it. And I think that coming to procurement from a different profession give you, in many cases an advantage. You see things from other angles, you see things from other, let’s say point of view. And when you are negotiating, when you are dealing with people with cases, you need to see the full picture. And having done these things before in your past, can again, give you an advantage in negotiation in these processes in all.
Helene Laffitte:
No, no, it’s true. But we’re not going to talk about all those different, let’s say all the skillset of a procurement leader. Today we’re going to talk about a topic that we think has the power to reshape the procurement landscape and its generative AI. So it’s in an innovative technology that is set to revolutionize the way organizations approach their procurement strategy and operations with an immense potential for transformation.
So, in this episode, we’ll delve deep into that fascinating world of generative AI, uncovering its game-changing impact on procurement. We’ll be addressing the key questions that procurement professionals are or should be eager to explore. What are the benefits, the challenges and opportunities that arise from this cutting edge technology? So let’s do it. Let’s start and let’s dive right into it with our first question, and that’s all for you. Offer, in what way has data-driven procurement influenced the industry and what benefits have you seen as a result of this approach?
Benefits of data-driven Procurement & Generative AI.
Offer Hacmon:
Well, so data-driven procurement is becoming a buzzword today across the industry. You hear all around, and the benefits are, benefits of having functional data-driven procurement are huge. It’s provided with better option for analysis, ability to improve supplier management and risk management planning, can generate options for cost savings. And again, a lot of things that you can do with that and achieve by having that. I think the discussion is wider than that. And it starts from what organizations require today from procurement. I think that organization requires today from procurement to be really on top of things and have, again, a wider understanding of what the company do, where it is in the landscape. And according to that, procurement specialist needs to bring results, good results to the company. Now it starts with that.
In order to do it in the best way possible, there is a basic need. And the basic need is to strategize your procurement plan for the long term. Trying to have a long term plan that will enable you to see the big picture, to see what you have and how you can deal with that. In order to do that you need to have two, actually few of these things, the two basic things. First, you need to have knowledge. You need that your specialist or the people in your group will have the relevant knowledge about the company, about its forecast, , about what we need, all of those things. So let’s say that the first step would be knowledge based procurement. You need to embrace that.
The second is to have the data and in order to have the data, having the data is one thing, but you need to have a reliable data. So you need to work internally to see that the data that you are relying on is something that is based, something that you can use. With those two things, you need to build a plan. And today, you know, you have so many tools that enable you to do it. But again, using tools is only the second phase. It’s not the first phase. The first phase is knowledge and arranging the data. After that you can have tools that will enable you to analyze, enable you to have a longer or long term plans.
Helene Laffitte:
Yeah, we always say that digital transformation is not about technology, it’s about changing the way you work and then the technology comes after. I think that’s what you’re trying to say as well. So now we’re going to talk about generative AI. It’s impacting procurement, it’ll impact procurement, but what benefits do you think it can bring to the industry?
Offer Hacmon:
So it’s like phases. currently using generative AI for procurement is let’s say pretty limited. It’s a supporting tool. I use it on my daily work, for example, ChatGPT and other tools that are similar to that in order to gain data, in order to get information about competitors, about licensing model, about all kind of things that help me during the negotiation. This is the phase we are in from procurement, from generative AI and procurement in generative. But this is not the real story.
The real story is the vision here, vision wise. And when you understand the potential, you understand that generative AI is going to change the industry dramatically. Generative AI, when you will connect it, and this is what I see as the next phase of it, when you will be able to connect generative AI tools to your internal system and combine it with public information, you will be able to use and tailor generative AI for your use. If it’s the use in negotiation, if it’s the use for planning, forecasting, things like that. And maybe in the later stages also for actual negotiation, replacing specialists in very basic negotiation phases or in negotiation at all. It depends on the phase that we’ll get, but I think that the change or the impact on the industry will be significant.
Helene Laffitte:
So if I understand correctly what you’re saying that today, generative AI is limited to mostly research or writing emails a little bit faster, in a better way, you don’t have to scratch your head too much to write that difficult email. But in the future, if we’re able to connect the public information that is out there with your own data, identify patterns, identify trends, and then make recommendation or alert on certain WIC signals and so on, that’s where really the value comes and it’s very dynamic. It’s very real time thing that could really kind of be a game changer in particular in the realm of procurement. And rate negotiation is a very good example because there’s the balance and of power between the two parts of the negotiation, having more information and being able to use not only your information, but the one from outside can give you be on an equal foot with your suppliers and make sure that negotiations are fair.
Offer Hacmon:
Yes, it is fair. But someone will have the upper end. And by the way, I think that it’s all connected. It’s the data,. You need to have the data, you need to have the knowledge in order to have a good generative AI tool that will take a good data from your internal system and will use external resources as well and will enable it to create you a full picture. And that will give you the upper hand in negotiation in planning and everything. So yes, it’s all connected at the end of the day and the future is yet to see, but it seems like it’s pretty clear where it is going.
Helene Laffitte:
So that’s a very interesting vision. I think that we can all agree that having more information when we are discussing with both suppliers and clients actually is really key. But how do you see procurement professionals adopting that generative AI, and with what outcomes?
Adoption of Generative Ai by procurement Professionals
Offer Hacmon:
Well, there is a difference between theory and reality. I think that at, it’ll come to three things that needs to happen. It needs to provide value. Procurement specialist, the manager, whatever it needs to have, see that it’s provide you with, that’s the first thing. The second thing, not less important is the ease of use. The idea that the procurement specialist manager, again, relevant personnel can take to and without all kinds of processes that he needs to go through, can use it to its benefits. That’s the second thing.
The third thing is budgeting. We see in procurement that it’s not the spoiled boy of the company. You need to fight for every budget. And sometimes when we saw cases before, there is an ROI, there is good potential, the reason needs to be at the end of the day you don’t have the budget. The picture needs to be clear and the value needs to be clear in order to at least be in a situation where you will get the relevant budget, you will be able to prove why it’s good. And I think that after the first time, after the first year there will be no questions. So all the three needs to come together in order to make it relevant for procurement.
Helene Laffitte:
Yeah, it’s true. So you were mentioning, so actually what you’re saying is that you need to be, make the business case. You need to show what value it can bring to your organization and then it probably will become a no-brainer. I know to the extent that the price is lower than the value generated?
Offer Hacmon:
Of course.
Helene Laffitte:
We agree on that. We agree on that. So what steps could those organizations take to integrate this technology in the operation? So this is a question that we’re talking about the future of generative AI. So obviously we’re talking about the future. That applies to any new technology actually that you want to integrate into your operation. What are the steps that an organization should take to do that?
Offer Hacmon:
So first I think that it comes to the procurement itself, the professionals themselves. I think that they just need to try. They need to work with the tools as much as possible. There are many free tools that you can work with and make it part of their day. Get them used to it, get them used to the tools that we have now. And again, the next phase is just around the corner to have all kind of working tools that will simplify processes for you. It’ll come from all kind of companies that will offer it, embrace it. Don’t deny it, embrace it. This is super important. This is the best advice I can give for the current situation.
Helene Laffitte:
No, and I think it’s a good point, too. A lot of people are afraid of AI and we have all those declarations saying that AI will destroy everything, will destroy jobs and so on. And indeed, I think that some jobs will disappear in the next 10 to 20 years, but some new jobs will be created thanks to those technologies because we’ll have different needs. And I think that you are always more afraid of something you don’t know than something you know and you know the limitations. And I think that if people were using a little more generative AI, they would see today’s limitations. They would start to see the trends as well of how it’s evolving and probably would have a more lucid and objective opinion on it. And it’s good, the good and the bad. I think that’s why. I truly think that’s a good point.
And to be honest, we discussed that very quickly, but it can already bring value to an individual in their daily work because just what I was mentioning. You were mentioning research, there’s the writing things, it’s giving you ideas. The other day I used it to prepare slides, to be honest. And it’s pretty good. I’m not saying it’s replacing everything, but it gives you that idea, oh, I wouldn’t put it that way, or, oh yes, that’s a good way to do things. And then you take it from here. So yes, I think that’s a very good step. But now let’s talk about the downside of it. Say what potential risk and challenges do you see associated with the use of generative AI in procurement and how can we mitigate those?
Offer Hacmon:
Well, so the more obvious one of course is privacy and compliance, things like that. These are things that companies afraid of, and I can fully understand it., when you are taking internal information and putting it on an external tool, let’s say, okay, it is not something that is easy to do. But with that, of course there will be solution that will enable you to work in a, let’s say, an isolated environment. I’m seeing such tools emerging and they’re coming from a kinds of organizations that enable you to go to get information to do all kinds of things, but in an isolated environment. And that hopefully will solve the issue of privacy. But it’s still, I know that many companies debating it, there are a variety of thoughts about it, about the usage of it. So it’s an ongoing game.
At the end of the day, I think that company will have to embrace it. They cannot be left behind and there will be solution, there will be a regulation. So this is one thing. But I think that a lot less scarier for me is that it’ll commoditize procurement or sales or other professions like that. I think that today one of the most interesting thing about procurement, it is again, joined to sales to visit to other things as well, is the ability mostly in complex situation, complex negotiation, complex processes to think outside of the box. And if everything is, let’s say, managed by machines, it is, leave us with that. This is the risk, but it’s also an opportunity. When everyone is thinking the same, there might be an option to think in a different way, but still these are the two things. It’s privacy, privacy, compliance, and the thing of commoditized and thinking outside the box.
Helene Laffitte:
No, I think it’s true. And if I look at the category I’m working on, so consulting, I think that there’s a human component in it. It’s like legal actually, where there are somethings that cannot be replaced. And I’m not sure today in the close future that we’ll be able to model trust and the quality of human interactions. And until we’re able to do that, then I think that humans will still have the upper hand in procurement for consulting services or legal services.
So I think that what you are saying too, is that some of the transactional activities that today are done by procurement can be done with tools, technology, and AI. But there are some things that at least now cannot. And that’s a strategic part. That’s what you’ll say by thinking out of the box, this strategic thinking, all of this thinking about solutions that were never done before, taking a solution that is partially applied here and transfer that there. This is not necessarily something that today AI can do. And that’s where we still have an advantage. So I agree on you with that. So if we-
Offer Hacmon:
In the foreseen future, yeah.
Helene Laffitte:
Yeah, exactly.
So what advice would you give to procurement professionals who are looking to incorporate generative AI into their daily operations? And what resources would you recommend they read or they consult to learn more about this technology?
Offer Hacmon:
Well, I think that the information is out there. I’ll tell you about myself. During the last few months, I went to code without actually know how to code, but just writing prompts maybe correctly and how to generate pictures and how to write emails better and how to prepare tables, things like that. It’s just by trying. Okay? It’s no more than that. So again, the basic thing that I can suggest is to try. Put your hands in the water and try. Try everything and just try with every tool relevant. Understand this world, understand how to work, understand how to write prompts correctly, how to do it in the best way. Make it something that is part of your daily work. That will give you an advantage for the long run.
Helene Laffitte:
No, it’s true that it’s not obvious. And you have many, many advice on how to write the right prompts, actually. So just go on the internet and search that. But I think what is interesting is that at any level, in any job today, you can start using those tools and see for yourself what that can be, what can do, and imagine what the future can be. Because we all see in the last six months between GPT three and GPT four, we already saw a huge difference. And I can imagine then when you have the ChatGPT 5, 6, 7, then we could see tremendous advantage. And unless you really are into that and you have your fingers in the plug and you know what’s happening, you might not see how it’s evolving.
And to your point in saying it’s out, there are a lot of articles that talk about the limitation of AI, the future of AI, the vision by people who really master that environment. So I encourage people to have a look and understand how it could impact and will not impact only procurement. It is going to impact pretty much any function in the company. And what will be interesting is too, as you were saying, to interconnect all of this and all that data and all that information that is available could, because we talk about data, people see numbers, but actually generative AI is also about words. That’s the thing that had limitation until now. But those tools can analyze text and make something very summarized and insightful about text. I think that’s the big difference from five years ago. So that’s where the difference comes and that’s where it will come in the future, I think.
Offer Hacmon:
Right. I agree with you.
Helene Laffitte:
So if we want to, that’s the tough exercise. I know this, everybody has been through that. If we want to just single out one thing that we want the listeners to remember from our conversation today, what would that be?
Offer Hacmon:
I would say to them that they should know that the car was already invented.. It’s in its early stages. They need to make sure that they are not the only one or the less one that’s still riding horses. They need to have a driving license. They need to learn how to drive. That’s my advice.
Helene Laffitte:
Yeah, get on the bus. It’s already rolling, right?
Offer Hacmon:
Get on the car. Yeah.
Helene Laffitte:
Yeah, that’s a very good point. And that goes to with that, get to know the different tools, get to explore, try them even in a safe environment where you’re just poking around and not really using that specifically for your daily job, but get on them, try, read about it. And you have the same vision that is pretty positive on it given that we’re able to really find a way to keep the privacy or the information, which I think I totally agree with you on that. That’s probably the major risk about generative AI and sharing information with the planet is that it’s indeed shared. Well, that’s it. Anything else Offer that you wanted to add to the conversation before we pause?
Offer Hacmon:
No, just to thank you for the opportunity. It was a pleasure, and thank you very much.
Helene Laffitte:
It was very interesting. Thank you. Thank you again, Offer.
Offer Hacmon:
Sure, my pleasure. Bye.
Helene Laffitte:
And that concludes today’s episode of Procurement Game Changers. I want to extend a heartfelt thank you to our credible guest, Offer for sharing his expertise and shedding light on the impact of generative AI in procurement. It has been an enlightening and engaging discussion. Before we wrap up, I want to reach out to all listeners. If you have success stories of challenges related to generative AI in procurement, we want to hear from you in the comments section. Share your experiences, insights, and questions with us. We believe in the power of community and learning from one another.
If you find this episode valuable and enjoyed the conversation, please show your support by giving them a thumbs up, subscribing to our channel and sharing this podcast with your colleagues and peers. Together we can spread knowledge and inspire others to change procurement for the better. ‘Till then, stay safe and happy sourcing. Bye.
PS: To listen to our previous PGC episode CLICK HERE!
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