Management

NASCIO 2023: North Carolina Speeds Procurement Processes Via Automation

The state IT agency is assessing how artificial intelligence might improve solicitation queries and responses.

Mickey McCarter is the senior editor of StateTech Magazine.

James Tanzosch, North Carolina chief IT procurement officer, came into his job a little over a year ago. At the time, he contemplated ways to streamline the N.C. Department of Information Technology’s procurement process. He began by simply documenting the process, which had never before been done.

Speaking at the annual conference of the National Association of State Chief Information Officers (NASCIO) in Minneapolis, Tanzosch said Tuesday that first documenting the process and then adding automation to it where appropriate sped up the IT agency’s acquisition activities tremendously.

“If everybody was sitting in the same room, how long would it take to complete that procurement?” Tanzosch asked. “From a process improvement standpoint, anything over 12 days is waiting. We might have over two years of waiting in some cases,” he concluded.

By producing and enforcing the schedule, the N.C. Department of Information Technology reduced its typical procurement time from 360 days to 120 days, he told a panel at NASCIO 2023.

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Procurement Chief Documented the Process, Then Applied AI

In documenting the procurement process, Tanzosch identified a 10-step model. “We plan to help our users make sure each step is complete with ChatGPT,” he said. “The next step of that is to use it to help develop specifications in the solicitation document.”

“I have to stress: It’s not going to give us a final document. But it will give us something that is 80 percent there, and hopefully much better documents in the future,” he continued.

Tanzosch’s procurement office is currently training ChatGPT to assist in producing a solicitation document in accordance with the newly developed process documentation. The goal is to improve the experience of the procurement officers producing requests for proposals (RFPs). He emphasized that the artificial intelligence (AI) tool was not going to take away any jobs.

“We have to let our team know that automation is going to help you be better, stronger and faster,” Tanzosch said. “It’s like having a personal assistant on your shoulder.”

ChatGPT requires considerable guidance to produce a result that is acceptable to the purchasing team, he said. And procurement personnel must guide it to successfully produce a solicitation document.

“I first heard the term ‘prompt engineer’ about a month ago. I never heard that term before, and now I hear it all the time. So, I think a procurement prompt engineer is something we are going to try,” Tanzosch said. “How do you put that prompt engineer out there to get what you need in a solicitation document?”

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Automation Can Increase Transparency Through Communication

A major goal of employing automation is to enhance transparency through being proactive, he added. “We want to change the conversation. We want to say, ‘Hey, if we are going to get this procurement to you in January, you need to be done with your review in October.’ By doing that, we will maintain the schedule.”

To that end, Tanzosch’s office has designated people whose sole job is to ensure that the agency is meeting each step of the procurement on time to improve processes.

Tanzosch hopes automation also will improve transparency for vendors responding to state RFPs.

“Sometimes, we are not very good at telling the vendor community what is happening. We are guilty of this in North Carolina. We are trying to fix this,” he said.

The N.C. Department of Information Technology must stick to a schedule, and it must communicate any changes to the schedule. The agency is working to establish a public-facing dashboard that will inform vendors of any changes. While it won’t tell them everything they need to know, it should tell them enough to set expectations, Tanzosch said.

NASCIO Research Project Aims to Promote Procurement Automation

During the NASCIO procurement panel, Amy Glasscock, NASCIO’s program director for innovation and emerging issues, shared some initial findings from a research project on AI in procurement. NASCIO is working with the National Association of State Procurement Officials, Boise State University and Florida International University to produce a publication on the topic.

Preliminary research suggests that there currently are limited applications for AI in procurement, which is similar across the board for state government operations, Glasscock said. But in a contrary trend, procurement officers tend to rely on in-house expertise to assess AI applications rather than turn to outside expertise.

Procurement officers may look to deploy AI in operational and strategic program areas. In operations, it may help produce solicitation documents and serve as an aid to evaluate suppliers against solicitation criteria. In strategy, it may promote responsible practices and increase transparency.

The initial research also stresses the importance of interconnected leadership and strong coordination between IT leaders and procurement leaders. “Tech and procurement must understand each other,” Glasscock said.

NASCIO anticipates publication of a final research document sometime this winter.

Keep this page bookmarked for our coverage of the NASCIO 2023 Annual conference. Follow us on X, formerly known asTwitter, at @StateTech and the official conference Twitter account, @NASCIO. Join the conversation using the hashtag #NASCIO23.

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