With mounting pressures to reduce operational costs, procurement organisations are increasingly turning to process automation and AI as key strategies for enhancing productivity and resilience. According to Procurement Leaders’ “Supercharging Procurement Productivity” report, 78% of procurement functions face intense scrutiny to cut functional operating expenses in the coming year. This trend reflects a broader industry challenge, as stakeholders seek to reconcile productivity gains with complex, evolving supply chain demands.
Joao Paulo da Silva, regional resident for EMEA and APAC at Coupa, underscores this dynamic with insights drawn from his direct experience with customers. He observes that unlike in the past—when new technology conversations were largely confined to IT departments—the current climate sees multiple business units overwhelming procurement teams with AI demands. “They just drown,” he says, highlighting the sheer complexity and volume of requests faced by procurement leaders. Yet, Silva stresses that this wave of automation is not about replacing personnel. Rather, it frees procurement professionals from routine tasks, allowing a pivot towards strategic imperatives such as supply chain disruption planning and enhancing resilience.
Coupa’s evolution from a source-to-pay to a design-to-pay platform exemplifies this shift. Silva explains that being involved from the initial stages of supply chain design through to procurement execution is vital for swiftly responding to disruptions such as tariffs and natural disasters. Coupa’s platform, which encompasses a vast network of 10 million suppliers and 3,500 customers, acts as a “digital twin” that enables scenario-based risk planning and agile inventory rerouting. By doing so, CFOs can maintain tighter spend controls while anticipating risks and strategising proactively, potentially yielding significant cost savings.
Despite enthusiasm around automation and AI, adoption within procurement remains below 40%, as noted at the recent Coupa Inspire event. Silva attributes this slower uptake to factors such as organisational overwhelm from the influx of AI requests and the ongoing learning curve. Studies corroborate this hesitancy; fewer than 28% of users report high satisfaction with current AI tools. However, there is broad consensus that as vendors improve automation capabilities and companies adapt their talent strategies, the adoption pace will accelerate, unlocking greater efficiencies.
Industry data supports this forecast. The Hackett Group reports that 64% of procurement leaders expect AI and generative AI to transform their roles significantly within five years, while facing a 9% efficiency gap due to rising workloads and constrained budgets. IBM’s recent research finds 60% of organisations deploying AI for predictive analytics, with expected productivity gains of around 20% and a 12% improvement in ROI over two years. These figures underscore AI’s tangible potential to reshape procurement workflows.
Meanwhile, talent shortfalls loom large as a key barrier to digital transformation in procurement. Gartner reveals only 14% of procurement leaders are confident in their teams’ ability to meet future needs, with 96% identifying gaps in technology and data skills and 86% in business acumen. This deficiency suggests that successful digital adoption hinges not just on technology but on upskilling and broadening the capabilities of procurement professionals. Procurement Leaders’ own research highlights this trend, showing 60% of companies have recruited specialists from beyond traditional procurement roles to boost digital competencies.
The imperative to embrace data-driven, strategic procurement is also linked to the need for business resilience. KPMG’s ‘Future of Procurement’ study finds that 77% of executives view supply disruption as a critical threat, with predictive analytics and generative AI expected to dominate the impact landscape within the next 12-18 months. Procurement Leaders similarly advocate moving beyond reactive pandemic-era tactics towards building long-term resilience through investments in data and skill development.
In terms of the future balance between automation and human expertise, Silva envisions a dynamic interplay. He cautions against the simplistic view of automation as a job cutter, instead positing that empowered procurement teams will leverage technology for higher-value activities like risk analysis and supplier negotiations. This shift requires CPOs to reconsider their functional roles continuously and stay ahead by integrating AI while safeguarding spend, risk, and sustainability agendas.
Some companies are already realising the benefits of digitalisation. Silva recounts customers who have slashed planning cycles from weeks to mere hours or days, enabling nimble responses to market shifts and cost reductions. These efficiency gains often fuel reinvestment into innovation and R&D, illustrating a virtuous cycle of transformation.
Looking ahead, the message from industry leaders is clear: gradual, continuous innovation wins. Silva advises procurement chiefs to focus on incremental 1% improvements daily rather than expecting sudden upheavals. By refining their organisations’ value chains and embracing their evolving strategic roles, procurement leaders can harness technology’s potential while maintaining organisational relevance and resilience.
Ultimately, procurement’s future lies in combining advanced digital tools with enhanced human skills and strategic acumen. Organisations that master this integration will be best positioned to navigate uncertainty, lead innovation, and achieve sustained competitive advantage.
Source: Noah Wire Services
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