**London**: A study by The Hackett Group reveals that 64% of procurement leaders believe AI advancements will redefine their roles by 2025. Despite anticipated workloads increasing by 10%, budget growth will only be 1%, creating significant efficiency challenges for teams.
A recent study conducted by The Hackett Group has highlighted the transformative role that artificial intelligence (AI) is poised to play in procurement processes over the next five years. According to the findings from their 2025 Key Issues Study, 64% of procurement leaders believe that advancements in AI, particularly generative AI (Gen AI), will significantly redefine their roles within this timeframe.
While the potential benefits of AI adoption are clear, procurement departments face a critical challenge: workloads are expected to grow by 10% in 2025, while budgets will expand by only 1%. This results in an efficiency gap of 9%, raising concerns about the ability of procurement teams to manage increased demands effectively.
The study indicates that a substantial proportion of procurement organisations are planning to invest in Gen AI technologies. Specifically, 42% intend to adopt new Gen AI solutions, and 33% are looking to enhance their existing technologies. Christopher Sawchuk, principal at The Hackett Group, stated, “Procurement organizations must accelerate AI adoption to unlock new levels of efficiency and value creation. Early adopters are already seeing measurable productivity and cost improvements, but the real opportunity lies in scaling AI-driven transformation.”
As of 2024, around 49% of procurement teams reported piloting Gen AI use cases, while only 4% had implemented them on a larger scale. The introduction of AI-driven procurement tools has reportedly led to productivity improvements of up to 10%, alongside gains in quality and cost savings. About 47% of companies are also integrating embedded AI into existing procurement software, such as Coupa AI Classification and SAP Joule Copilot.
Despite these positive indicators, the adoption of AI remains in its nascent stages. Leading procurement professionals anticipate that further developments will yield remarkable value, with some already achieving productivity gains exceeding 25%.
The Hackett Group’s study outlines a strategic roadmap for procurement in 2025, highlighting priorities such as intelligent automation aimed at reducing spending and ensuring supply continuity. The necessity to reform operating models has emerged as a key concern for organisations looking to tackle the significant efficiency gap and prepare for enhanced AI implementation.
However, challenges linger. Major barriers cited by procurement leaders include concerns regarding data quality, privacy and regulatory issues, supplier instability, and the complexities linked to current technologies and operations.
To facilitate effective AI-driven transformation, The Hackett Group recommends that leaders focus on automating processes, adapting their operating models to better serve stakeholders, executing practical use cases, and empowering teams with the necessary skills to leverage Gen AI effectively. As economic pressures rise, those in procurement who adeptly harness AI technologies are likely to gain a competitive advantage in efficiency, cost management, and supplier relations.
Source: Noah Wire Services
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