**London**: The Hackett Group’s 2025 Key Issues Study reveals that AI is set to transform procurement roles, with 64% of leaders anticipating significant changes. However, a looming efficiency gap emerges, with workloads rising by 10% against a mere 1% budget increase.
The Hackett Group, a consultancy focused on generative artificial intelligence (Gen AI), has published its 2025 Key Issues Study, highlighting the significant impact that AI is set to have on procurement processes. The survey reveals that 64% of procurement leaders anticipate that their roles will be transformed by AI and Gen AI within five years.
However, the research also underscores a substantial challenge facing procurement departments: while workloads are expected to rise by 10% in 2025, budgets will only increase by 1%. This discrepancy creates a projected efficiency gap of 9%.
Many procurement organisations are beginning to invest in Gen AI technology, with 42% of respondents planning new investments and 33% looking to upgrade existing systems. Christopher Sawchuk, a principal at The Hackett Group, emphasised the importance of accelerating AI adoption for enhancing efficiency. “Early adopters are already seeing measurable productivity and cost improvements,” he said. “But the real opportunity lies in scaling AI-driven transformation across sourcing, contract management, and supplier collaboration.”
According to the findings, nearly half (49%) of procurement teams have piloted Gen AI applications, although only 4% report large-scale deployment. The implementation of AI tools has led to productivity, quality, and cost savings improvements of up to 10%. Around 47% of organisations are utilising embedded AI features in existing software solutions.
The study indicates that procurement leaders view AI as a critical driver of change, particularly in functions such as purchase order processing, spend analytics, and e-procurement. Pilot programmes are also increasing in areas like contract life-cycle management and advanced analytics.
Looking ahead to 2025, procurement organisations are prioritising the adoption of intelligent automation to enhance their capabilities. Key goals include improving spend reduction, ensuring supply continuity, transforming operational models, addressing inflationary pressures, and implementing digital transformation strategies.
While the outlook for AI adoption is positive, procurement leaders face challenges including data quality, privacy concerns, regulatory issues, supplier volatility, and the complexity of current processes. The Hackett Group’s recommendations for successfully integrating AI into procurement practices include automating operations, aligning the operating model to stakeholder needs, practical execution of use cases, and upskilling teams for effective use of Gen AI.
As economic pressures mount and the demand for cost savings rises, procurement leaders who strategically embrace AI could achieve a competitive advantage in efficiency and supplier management.
Source: Noah Wire Services
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