After 5 years of autonomous negotiations, it’s time for an academy to help spread best practices

It’s been described as the best kept secret of the Fortune 500.

As you read these words, thousands of autonomous negotiations are taking place on behalf of the world’s largest companies, such as Walmart and Maersk. They’re using AI to reach out to under-managed suppliers and get better deals for both sides, unlocking more value than ever before.

At scale, this has the potentially to significantly raise the world's GDP.

If you ask most people to imagine pioneers at the cutting edge of AI, they might think of tech leaders in Silicon Valley. But AI is only as interesting as what people do with it. Autonomous negotiations is proving a success thanks to the work of thousands of men and women in functions such as procurement in businesses across America and the world.

It's time to connect practitioners in autonomous negotiations, shine a light on their work, and learn more from each other.

First, a quick recap.

Autonomous negotiations is a field of AI first pioneered five years ago when the concept was introduced by Pactum (with plenty of skepticism at the time, as explained on the Pactum blog).

The very first autonomous negotiation took place in 2019. It was a test of the concept but involved real businesses needing a real contract. The bot was sent out on behalf of a limousine chauffeur service on one side of Europe and received by a taxi driver on the opposite side of the continent. It resulted in better contractual terms, a saving of €80 for the company deploying the AI, and a happy supplier who - despite not liking computers - said he found the experience to be more convenient than the previous back-and-forth phone calls.

A lot has changed since then, at least in terms of the size and scope of autonomously negotiated deals.

Autonomous negotiations is now an established field of AI

Fortune 500 companies are now regularly autonomously negotiating and concluding multi-million dollar deals. The largest autonomously negotiated deal so far was for just under $30 million and resulted in better contractual terms and a saving of nearly $1 million.

Autonomous negotiations have become a daily reality for many thousands of people either overseeing or receiving negotiation bots.

Far from being “the best kept secret of the Fortune 500” though, these companies are actually increasingly keen to talk about how autonomous negotiations benefit everyone - like this great recent discussion with Veritiv’s CCO. As he mentions, Fortune 500 companies are even now conducting autonomous negotiations with each other.

This is collaborative AI at its best. It’s enhancing the role of people working in procurement, it’s delivering more business growth opportunities to more suppliers, and it’s getting better deals for customers too.

Negotiations create value. To get a deal, both sides have to give the other more of what they want. This is not a zero sum game. The best negotiators know that in order to get a bigger slice of the pie, it’s best to bake a bigger pie together. That’s why trained negotiators prefer negotiating with other trained negotiators. The problem is that - in the absence of AI - there’s just not enough negotiations. They take time to prepare and discuss. At large enterprises, most suppliers don’t get that opportunity to discuss what more value they can offer and what would better suit them in return. Instead, they get standardized, cookie-cutter terms constantly rolled over.

Now thousands of negotiations can be conducted simultaneously with an AI able to calculate the most optimal terms for both sides. At scale, this can transform global commerce and raise the world’s GDP.

This doesn’t replace humans in procurement. The exact opposite. It elevates their role. It means they can manage far more contracts than ever before, focus more on higher level strategic work, and deliver more value to their business. The men and women in procurement currently overseeing autonomous negotiations did not expect, until recently, to be pioneering at the cutting edge of AI. But they are key to making all this work.

The way forward

For success with AI, bring everyone onboard - explains the latest Harvard Business Review in this insightful article by David De Cremer, a professor of management and technology.

For Success with AI, Bring Everyone On Board

AI is intimidating employees. As machines perform intellectually demanding tasks that were previously reserved for human workers, people feel more excluded and less necessary than ever. The problem is only getting worse. Eighty percent of organizations say their main technological goal is hyperautomation—or the complete end-to-end automation of as many business processes as possible. Executives often pursue that goal without feedback from employees—the people whose jobs, and lives, will feel the greatest impact from automation. In this article the author examines what keeps leaders from involving rank-and-file employees in AI projects, how they should model inclusive behavior, and what organizations must do to develop employee-inclusive AI practices. Those practices will make companies more likely to improve long-term performance—and to keep their employees happy, productive, and engaged.

Harvard Business ReviewDavid De Cremer

Don’t leave employees in silos, on their own in front of their screen, he explains. We all need to upskill and, now more than ever, we need more human connections in order to discuss the implementation of AI initiatives and share best practices.

I work as Senior Solutions Consultant at Pactum AI, which delivers autonomous negotiations for many of the world’s largest companies. This field of AI is no longer just about us though and I’m always delighted to see how practitioners in this space from so many different companies are keen to share best practices with each other so we can all benefit together.

Hence, it’s time for an Autonomous Negotiations Academy - a collaborative non-profit project to help scale up our community and our impact.

Our physical address will be 26 Broadway in New York where a wonderful co-working space called Primary, increasingly popular with innovators in AI, reached out to us and offered us a home. We recommend it to anyone looking for a great place to work in New York. The location couldn't be more apt. It's just above Wall Street and opposite the Charging Bull statue built to represent the poised potential of business to be unleashed.

More importantly though, the Autonomous Negotiations Academy be located online globally.

It will start by providing helpful content that shares deeper insights into how to conduct autonomous negotiations effectively and responsibly. The key longer term goal this year is then the creation of its first online course so that practitioners in autonomous negotiations can get themselves certified as experts while learning directly from some of the world leaders in AI and autonomous negotiations. We’ll also have events to bring practitioners of autonomous negotiations together, both online and offline.

Watch this space. We’ll have much more to share soon. For now, if you’re interested in AI in procurement then sign up with your email address to stay updated.