As AI transforms procurement practices, experts emphasise the importance of strategic, responsible adoption amidst a proliferation of vendors and technologies, highlighting the need for enhanced digital literacy and leadership insight.
In the rapidly evolving landscape of digital procurement, artificial intelligence (AI) is reshaping traditional practices by automating workflows and augmenting decision-making capabilities. As Bertrand Maltaverne, senior analyst at Spend Matters, describes in his series on ‘Autogmentation’—a term he coined to capture the symbiotic collaboration between human intelligence and AI—this integration combines automation with augmented AI to enhance autonomy and expand job roles within procurement functions.
However, the pace of AI development has induced an ‘AI rush’ among procurement professionals. Many organisations find themselves chasing emerging technologies without fully understanding the underlying purpose or strategic direction of their investments. This phenomenon was exemplified by the surge in interest around Agentic AI, which followed the earlier generative AI frenzy. While organisations strive to explore and implement generative AI solutions, there remains significant confusion about vendor capabilities and the practical deployment of these advanced tools.
Melissa Drew, Associate Partner at IBM and a seasoned procurement leader with over 27 years of experience, articulates the challenges faced by procurement professionals today. Speaking to Spend Matters, she notes that procurement leaders are now pausing to critically evaluate the true value behind the AI adoption race. “People are buying ‘AI tools’ based on sales promises but struggle with adoption and remain unclear whether these solutions truly address their needs,” she said. Drew highlights how procurement leaders must educate themselves and their teams to make informed decisions before investing in AI.
Procurement professionals are confronted with increasing demands to diversify their skill sets. Beyond communication, workflow management, and critical thinking, they must now embrace creativity and digital literacy to harness AI effectively. Yet, the rapid explosion of AI vendors—numbering in the dozens for niche procurement problems—adds complexity rather than clarity. Drew explains, “Instead of choosing from 10 or so solutions, procurement teams now face evaluating 50 or 60 niche providers, which complicates transformation efforts.”
To aid in navigating this fragmented market, Drew has developed a three-tiered framework that helps organisations assess AI use cases methodically. The framework questions whether AI is viable for the company, if the initiative is worthwhile, and whether it can be implemented safely and responsibly. This approach encourages procurement leaders to scrutinise vendor solutions and deployment strategies through a structured checklist, enabling more confident, scalable adoption.
Real-world examples demonstrate the tangible impact of AI in procurement. For instance, BDO Unibank’s use of Zycus’ Merlin Agentic AI platform automated invoice matching and compliance checks, leading to significantly reduced cycle times. Similarly, Selecta AG has leveraged AI-powered contract management solutions to streamline workflows and improve compliance, while global companies such as Maersk and Unilever have deployed AI for invoice processing, contract management, and supply chain risk assessment. These applications underscore AI’s growing role in driving efficiency and resilience across procurement activities.
Beyond process automation, AI enhances strategic functions like supplier research, contract clause analysis, and RFx document creation. Generative AI tools are particularly valuable in tasks such as spend classification, real-time market data summarisation, anomaly detection, contract drafting, and supplier outreach communications. As highlighted by procurement technology experts, AI can improve negotiation outcomes, supply risk management, and supplier performance monitoring, transforming procurement into a data-driven, insight-rich discipline.
Nevertheless, implementation challenges persist. Industry sources recognise risks related to data privacy, ethical AI use, and the shortage of skilled professionals able to manage AI’s complexities. Procurement leaders must therefore invest in talent development and maintain ethical standards to maximise AI’s strategic advantage. Panels of AI and procurement experts emphasise the need for agility and human expertise alongside AI technologies to navigate these challenges successfully.
Overall, the transformation of procurement through AI is profound but requires careful, informed leadership. As Melissa Drew’s framework illustrates, successful AI adoption hinges on clear understanding, purposeful investment, and responsible use. In this dynamic environment, procurement leaders who cultivate AI literacy and strategic insight will be best positioned to unlock AI’s full potential, streamlining operations while expanding innovation and value creation across the supply chain.
Source: Noah Wire Services
