Pactum’s AI in Contract Negotiations: Walmart and Maersk
The case examines the use of AI to automate contract negotiations, addressing inefficiencies in managing high-volume, low-value agreements. Traditionally, procurement teams handle these contracts manually, which is time-consuming and diverts focus from strategic deals. An AI solution was introduced to automate these routine negotiations, allowing for quicker, data-driven processes and improved contract terms.
Piloted by Walmart and Maersk, the AI demonstrated notable efficiency gains and cost savings, including higher supplier engagement. However, challenges arose in maintaining supplier relationships and balancing the automated approach with the need for personal interaction. Integrating the AI also required alignment with each company’s broader digital transformation strategy. The case explores how businesses can leverage AI to streamline procurement while managing the transition from traditional methods to automated solutions.
Students will:
1. Analyze how AI can automate high-volume, low-value contract negotiations, reducing inefficiencies while addressing the challenges of maintaining human relationships and supplier trust.
2. Explore digital transformation strategies in traditional business functions, examining how AI solutions shift negotiation processes and align with broader digital frameworks.
3. Evaluate the strategic implications of adopting AI in procurement, including value creation, competitive advantage, and managing the transition from human-driven to AI-driven processes.
