Recent data reveals that investing in AI within procurement functions remains significantly behind other sectors, despite clear evidence of its transformative benefits, highlighting a critical gap in leadership prioritisation.
Investment in artificial intelligence (AI) within procurement functions remains notably lower than in other areas of business, despite clear potential for transformational impact, according to recent data from SAP Taulia’s AI in Procurement Repo...
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rt. The report, which surveyed senior procurement decision-makers worldwide, finds that only about a third of organisational leaders prioritise AI investment in procurement and supply chain management. This lags behind sectors like finance, data analytics, and cybersecurity, which are more frequently targeted for AI expenditure.
Current market pressures have intensified demands on procurement teams, with over 70% reporting increased workloads in the past year. Almost half of these professionals believe AI could play a major role in addressing these challenges, yet leadership investment has not caught up, particularly in regions like the UK where only one in five leadership groups focus on procurement AI initiatives. In contrast, investment prioritisation is higher in countries such as Australia, Singapore, and the United States, highlighting significant regional disparities.
Industry experts argue this underinvestment stems partly from a persistent perception of procurement as a largely operational support function rather than a strategic driver. The SAP Taulia report identifies that nearly a third of organisations fail to recognise procurement’s strategic value enough to justify AI expenditure. Barriers to AI adoption also include concerns about data security and compliance, limited internal expertise, and challenges integrating AI with existing workflows.
Despite these hurdles, procurement professionals are already embracing AI tools, ranging from procurement-specific platforms to generative AI systems. Many users report that automation has freed capacity for higher-value work like strategic decision-making, risk management, and supplier relationship development. This aligns with external findings from other studies, such as Ironclad’s survey of American procurement professionals, which found widespread AI adoption across sectors with applications spanning supplier tracking, workflow automation, and data analysis.
Separately, reports from The Hackett Group and Icertis underscore the urgency for expedited AI adoption in procurement to close efficiency gaps and capitalise on AI’s value beyond mere cost savings. Early adopters demonstrate measurable gains in productivity, risk detection, and long-term strategic impact. Nonetheless, these benefits are unevenly realised, with industry benchmarking showing only a small fraction of organisations having fully scaled AI capabilities within their procurement teams.
The broader AI investment landscape shows faster returns in adjacent business areas. For instance, B2B revenue teams in the UK and EU have reported rapid ROI from AI within their first year, underscoring AI’s growing role in revenue generation and strategic operations. This contrast highlights that procurement’s slower AI integration may be limiting its potential contribution to business resilience and agility amid global economic volatility.
Procurement leaders call for a cultural shift in how AI is viewed and supported by senior leadership. They emphasise the importance of positioning AI as a tool to augment human skills, alleviate repetitive tasks, and empower teams to focus on strategic priorities that drive resilience in supply chains and working capital management. Industry voices suggest that without greater leadership commitment and investments matched to the strategic potential of procurement, organisations risk missing out on critical competitive advantages as AI continues to reshape corporate functions.
In sum, while procurement professionals increasingly recognise AI’s transformative possibilities and actively employ AI technologies, a prevailing gap remains at the leadership level. Shifting organisational attitudes to treat procurement as a strategic partner equipped with AI capabilities could unlock significant long-term value, resilience, and operational efficiency in an era marked by mounting complexity and rapid change.
Source: Noah Wire Services
