As AI automates routine tasks, procurement teams are reorienting towards building resilient, innovative, and strategic partnerships, redefining success metrics and skills for the future.
Procurement Transformation in the Age of AI: Reinventing Value, Not Repeating Efficiency
By Isabella Ferrari, Jaspreet Swaich, SRM Today Resident Contributors
This article reflects our insights and learnings from the DPW 2025 conference in Amsterdam. By listening to keynotes and panel discussions, we identified common themes, challenges, and recommendations, and distilled our perspective on the future of Procurement and its talent in the era of AI.
Procurement in the Age of AI: Focusing on What Really Creates Value
AI is changing the way Procurement works – not by replacing people, but by shifting where people add the most value. Many of the tasks that once consumed time and resources can now be automated. The real opportunity is to use that time to help the business make better decisions, build stronger supplier partnerships, and manage risk more proactively.
This transformation isn’t about making old processes faster. It’s about rethinking the role of Procurement in a business environment that’s moving faster than ever.
From Efficiency to Real Impact
For years, Procurement has been measured by compliance and cost savings. Those things still matter, but they’re no longer enough.
AI tools can now handle catalog purchases, simple sourcing events, data checks, and reporting – often more reliably than humans.
So the question becomes:
If AI takes on the routine work, what should Procurement focus on instead?
The answer:
Supporting better business outcomes – resilience, speed, innovation, and sustainability.
Some companies are already making this shift. For example:
· Manufacturers are working with suppliers early to secure critical materials and avoid downtime.
· CPG companies are bringing suppliers into product development to reduce time-to-market.
· Technology firms are using supplier data to identify new revenue or cost-avoidance opportunities.
· Pharma companies are collaborating with niche AI innovators to transform R&D productivity and accelerate breakthrough innovation.
These examples have one thing in common: Procurement acting as a partner, not just a cost gatekeeper.
Three Changes That Will Shape the Next Few Years
1. From Managing Categories to Managing Relationships
Supplier performance and innovation depend on relationships – not just contracts. AI can surface insights, but people still need to interpret them, build trust, and connect opportunities across teams.
2. From Saving Money to Supporting the Business
Companies expect Procurement to help protect margins, support sustainability goals, and ensure supply continuity. Measuring only savings limits growth and slows collaboration.
Future KPIs need to reflect outcomes that actually matter to the business.
3. From Executing Processes to Helping Teams Make Better Decisions
AI can recommend suppliers, analyse risks, and automate workflows. But it cannot understand context, trade-offs, or internal priorities.
Procurement’s value will increasingly come from advising teams, challenging assumptions, and guiding decisions with data.
What’s Holding Teams Back
Most organisations aren’t limited by technology – they’re limited by readiness. The common barriers include:
· Outdated views of Procurement as a tactical function
· Poor data quality that undermines AI
· Skills gaps, especially combining analytics with communication
· KPIs focused only on savings, discouraging better ways of working
These are people and process challenges, not technical ones.
Where to Focus Now: Four Practical Moves
1. Redefine KPIs Around Business Value
Move beyond savings to metrics linked to resilience, speed, efficiency, risk reduction, or sustainability. When teams are measured differently, they behave differently.
- Use AI to Remove Low-Value Work
Start with areas where automation is mature:
· tactical buying
· demand consolidation
· spend visibility
· contract analytics
· data cleaning
This frees time for work that requires judgment and relationships.
3. Build New Skills Across the Team
The most valuable people will be those who can:
· interpret data
· communicate insights clearly
· work with suppliers to solve problems
· think commercially, not just contractually
Training needs to shift from “process compliance” to “business partnership.”
4. Strengthen Supplier Collaboration
AI provides insights, but suppliers provide solutions.
Create simple, structured ways for suppliers to bring ideas, flag risks earlier, and participate in planning. This builds resilience and accelerates innovation.
How Larger Organisations Evolved – and What Changes Now
For many global companies, this shift toward higher-value Procurement isn’t new. They began moving up the maturity curve years ago by building strong operating models with clear roles:
· Procurement leads close to the business
· Centres of Excellence supporting strategy, data, and governance
· Global Capability Centres handling analytics, reporting, and operational tasks from low-cost regions
This structure allowed category managers to spend more time influencing decisions, working with suppliers, and contributing to major commercial outcomes.
Smaller companies often wanted to reach this level but didn’t have the resources or scale. The result was uneven maturity across industries, with only the largest enterprises consistently operating at this strategic level.
For the larger organisations, AI now shifts responsibility back to the frontline with many activities previously handled by CoEs or offshore teams now done by AI at a fraction of the cost and time. As the support structure around them shrink, expectations of their impact will continue to grow. Front-line Procurement leads like Category Managers will now expected to be well versed in utilising AI capability to advance business goals.
For smaller and mid-size organisations, AI offers a much faster road to Procurement maturity. In fact, many of these companies may leapfrog traditional models altogether. Without the burden of legacy systems, rigid structures, or siloed support teams, smaller organisations tend to be more nimble, more hands-on with technology, and quicker to adopt modern tools. Provided they have a supportive IT team, they can integrate AI rapidly, automate manual effort, and implement best-practice workflows without waiting for multi-layered approvals or redesign projects.
As democratised AI levels the playing field, these smaller organisations could end up advancing faster than their larger peers, achieving strategic maturity not through scale but through agility, speed of adoption, and a stronger connection between technology and day-to-day decision-making.
Looking Ahead
Procurement isn’t going away, though its work will look different. Routine buying will become highly automated and the core team that remains will focus on:
· partnering with the business
· managing critical suppliers
· interpreting risks
· driving outcomes that create long-term value `
AI will continue to evolve, but it will not replace human judgment, trust, or creativity. The teams that succeed will be those that learn how to combine the strengths of both.
The next generation of Procurement professionals will need to be digitally fluent, commercially sharp, and empowered to advise the business.
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