Artificial intelligence (AI) is becoming a game-changer in Oklahoma’s procurement process. This innovative technology aims to address and resolve critical issues related to errors and transparency, which have long plagued the state’s purchasing activities. The promise of AI lies not just in automating mundane tasks but in integrating complex data systems to provide actionable insights. Consequently, Oklahoma’s initiative to deploy AI in its procurement practices is transforming how the state manages public funds and conducts internal audits.
The Need for Modernization
Indeed, the urgency to modernize Oklahoma’s procurement processes became apparent in 2023 when the Oklahoma Legislative Office of Fiscal Transparency (LOFT) raised eyebrows over the state’s compliance with the Central Purchasing Act of 2009. This statute was designed to standardize purchasing procedures and promote accountability, transparency, and oversight. LOFT’s report highlighted a striking discrepancy in fiscal year 2022 spending: while purchases under the Central Purchasing Division’s oversight amounted to $538 million, those outside of it reached over $3 billion.
Faced with this alarming disparity, Governor Kevin Stitt issued an executive order mandating a thorough audit of all state department purchases within a stringent six-month deadline. To rise to this challenge, the Office of Management and Enterprise Services (OMES), which includes the Central Purchasing Division, turned to Celonis, a company specializing in process mining and process intelligence. Their partnership aimed to leverage AI-driven tools to streamline audit processes and meet transparency requirements.
Implementing AI Technology
The collaborative effort between OMES and Celonis began by creating a digital copy of the state’s procurement data, encompassing over 80,000 lines of code. This foundational dataset was processed by Celonis’s AI platform, utilizing an advanced copilot system to identify and flag exempt purchases and potential issues. The platform’s ability to analyze such an enormous amount of data swiftly has proved invaluable.
Since its implementation, Celonis’s AI-powered system has unearthed more than $8 billion in purchases exempt from central oversight, flagged $190 million in purchase card transactions, and identified over $5.5 million in purchases where improved controls and education could potentially benefit future transactions. These findings have not only met LOFT’s requirements but also provided unparalleled transparency and accuracy in procurement activities. The automation has drastically reduced the time required for audits and minimized human error, setting a new standard for administrative efficiency.
Results and Benefits
The deployment of the AI tool has revolutionized Oklahoma’s audit process, shortening the audit duration dramatically from years to mere months and halving the number of employees required to conduct them. Employing AI has led to considerable cost savings, as manual audits typically necessitate more resources and time. For instance, using an external audit firm would have cost the state at least $14 million, whereas the expense of deploying the AI tool was significantly less.
Moreover, the AI system has significantly improved contract management and provided enhanced insights into spending patterns. State officials now have real-time access to data, empowering them to make more informed decisions and address procurement issues proactively. The automation facilitated by AI helps in highlighting inefficiencies and areas needing improvement, fostering better allocation and utilization of tax dollars. This shift towards a data-driven approach signifies a major leap in how government transactions are scrutinized and optimized.
Promoting Efficiency and Accountability
The automation capabilities of AI liberate employees from monotonous tasks, allowing them to focus on more critical responsibilities. One of the substantial benefits is its proactive approach in informing procurement officials about available statewide contracts for items they wish to purchase. This approach represents a fundamental shift from reactive to proactive procurement strategies.
Beyond simply streamlining existing processes, OMES is exploring additional applications for Celonis’s AI technology, including monitoring the timeliness of vendor payments, identifying duplicative invoices, and preventing double payments. These proactive measures ensure responsible stewardship of taxpayer money, further enhancing transparency in governmental operations.
Future Potential and Nationwide Interest
Artificial Intelligence (AI) is revolutionizing Oklahoma’s procurement process. This advanced technology is designed to tackle and overcome critical issues such as errors and the need for greater transparency, both of which have historically troubled the state’s purchasing procedures. AI’s potential goes far beyond simply automating routine tasks; it involves integrating complex data systems to generate actionable insights. As a result, Oklahoma’s initiative to implement AI in its procurement practices is reshaping the way the state manages public funds and carries out internal audits. The shift towards AI not only enhances efficiency but also instills a higher level of accountability and accuracy in public spending. By leveraging AI, Oklahoma aims to set a new standard for how state resources are allocated and monitored. This progressive approach showcases how embracing technology can yield significant improvements in government operations, ultimately benefiting the state’s residents.
