Generative AI (GenAI) in procurement has recently entered a challenging phase known as the “trough of disillusionment,” according to Gartner, Inc. This marks a transition from initial excitement and inflated expectations to a more sobering period where organisations grapple with the practical difficulties of integrating and realising value from the technology.
Gartner’s Senior Director Analyst Kaitlynn Sommers explains that while GenAI promises improved process efficiency, enhanced data insights, and cost savings, many organisations are encountering barriers that result in uneven returns on investment. Fragmented, low-quality data across procurement systems impairs the accuracy of AI outputs, and the technical complexity of integrating standalone GenAI solutions with existing platforms further hampers progress. Despite these obstacles, interest remains strong given the broad applicability of GenAI throughout the source-to-pay procurement spectrum.
This observation signals a notable evolution from Gartner’s July 2024 announcement, when GenAI for procurement was described as having reached the “peak of inflated expectations,” a point at which adoption was surging rapidly. At that time, 73% of procurement leaders anticipated adopting GenAI by the end of 2024, buoyed by compelling use cases and the promise of swift advancement toward widespread productivity within two years. However, the current placement on the Gartner Hype Cycle indicates that many organisations are now recalibrating their approaches to manage integration complexities, data issues, and scepticism about AI-driven insights.
Gartner’s Hype Cycle for Procurement & Sourcing Solutions illustrates how new technologies typically progress through five phases: Technology Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity. The trough phase reflects waning initial enthusiasm as practical challenges become clearer, yet it also represents a critical juncture for organisations to develop mature strategies that will enable eventual success. Gartner projects that GenAI for procurement will reach full productivity within five years.
Further complicating adoption are concerns around job security, resistance to change, unpredictable costs, and emerging but unclear regulatory frameworks relating to privacy, intellectual property, and trust. Procurement executives are urged to invest in data infrastructure to improve data quality and integration, carefully evaluate vendor offerings that embed GenAI capabilities aligned with business goals, and prioritise change management to foster adaptation and learning within teams. Upskilling in digital dexterity, human-machine interaction, and prompt engineering will also be crucial as AI-driven procurement processes become more widespread.
In addition to GenAI, Gartner identifies a range of other procurement-related technologies currently in the trough of disillusionment, including sustainable procurement applications, prescriptive analytics, supplier diversity solutions, and advanced contract analytics. Notably, Gartner predicts that conversational AI in procurement may become obsolete before achieving mainstream productivity, highlighting the uneven trajectories of different AI applications within the sector.
Industry analyses also underscore how automation and orchestration platforms are increasingly central to procurement transformation efforts. Modern source-to-pay suites are evolving to integrate AI agents and advanced workflow automation, enabling procurement teams to move from repetitive administrative tasks to higher-value activities such as strategic supplier management. These trends align with Gartner’s emphasis on text-to-process automation and natural language-driven workflows, which can accelerate contract management, project scoping, and supplier recommendation processes while generating cost efficiencies.
Despite the current disillusionment phase, early adopters of GenAI stand to gain competitive advantages as they overcome implementation hurdles and refine their AI strategies. Gartner’s Supply Chain Practice offers ongoing research and advisory support to procurement leaders navigating this complex landscape, highlighting that proactive investment and thoughtful integration remain the keys to unlocking GenAI’s full potential.
In summary, while generative AI’s promise in procurement remains substantial, the reality is that many organisations must temper expectations and focus on building robust data foundations, managing change effectively, and closely monitoring evolving regulations. As technologies mature and integration challenges are resolved, GenAI is poised to become a transformative tool in procurement’s digital evolution, driving greater efficiency, insight, and strategic value for those prepared to navigate its trough of disillusionment thoughtfully.
Source: Noah Wire Services
