AI in Public Procurement: Potential and Adoption in the Competitive Tendering Process

Abstract

The field of artificial intelligence (AI) has demonstrated considerable potential in the realm of business process development and public competitive tendering. This paper explores the potential of AI in the context of business process development for public competitive tendering. While the utilization of AI in procurement is not yet pervasive, it is acknowledged to possess advantages when employed in conjunction with human interaction. However, a paucity of research exists that specifically identifies the capabilities of AI in the context of procurement. The extant literature predominantly focuses on the operational level impact of AI in procurement, while also identifying benefits at the tactical and strategic levels. This study is anchored to an integrated literature review and empirical data combined with semi-structured interviews as the primary data collection method. The empirical data is analyzed through summarization and categorization to elucidate latent meanings. The results illustrate how AI can be applied widely in procurement processes, with 65 concrete examples discovered, including the definition of requests for bids and supplier selection as the most promising functions to benefit from AI. Additionally, it is imperative to leverage the internal AI environment to ensure data protection and privacy concerns in the utilization of AI in business purposes. This approach will facilitate a secure adoption of AI.