Hybrid intelligence in procurement: Disillusionment with AI’s superiority?

Abstract

Despite the numerous benefits of general artificial intelligence applications, there are challenges in its introduction and implementation. This paper examines the limits of artificial intelligence and the capabilities of so-called hybrid intelligence, the interplay between human and artificial intelligence. We present four in-depth case studies of the combined use of human and artificial intelligence in procurement processes, such as demand planning, supplier selection, order management and procurement analytics. This study identifies the advantages and disadvantages of human and artificial intelligence in different applications and proposes a model process of hybrid intelligence in procurement. The findings are summarized in eight propositions concerning the impact and role of human and artificial intelligence as well as mutual learning. We conclude that the unilateral application of artificial or human intelligence poses risks in numerous process steps, whereas an iterative hybrid intelligent process offsets shortcomings and boosts performance regarding cost, time, and quality. Practical implications include the identification of benefits and risks of human, artificial and hybrid intelligence in typical processes at the buyer-supplier interface and an outlook on the future of artificial and hybrid intelligence in procurement.