Research from Deloitte reveals significant shifts in how procurement leaders approach artificial intelligence (AI) and generative AI technologies. The comprehensive survey of Chief Procurement Officers (CPOs) across Europe, North America, and Asia-Pacific illuminates growing investment trends and strategic priorities for creating delightful procurement experiences.
The data speaks clearly: 92% of CPO respondents plan to assess generative AI capabilities through 2024, while only 8% have no immediate plans for evaluation. Financial commitments reflect this enthusiasm, with 11% of organizations allocating over $1 million to generative AI procurement capabilities in 2024. This investment trajectory points upward, as 22% of CPOs anticipate investing $1 million or more by 2025.
Early adopters report promising results. Approximately 50% of organizations implementing AI in procurement note doubled returns on investment compared to traditional methods, with advanced implementations achieving up than 5x ROI. The three areas where generative AI unlocks procurement value include:
- Significant productivity gains
- Optimized cost management
- Enhanced decision-making capabilities
The impact of enhanced analytics surpasses the combined benefits of productivity gains and cost optimization, highlighting the technology’s strategic value. Many procurement leaders recognize generative AI’s potential to strengthen integration with supply chain planning and finance functions.
However, challenges persist, identifying several key obstacles:
Capabilities: Enterprises should evaluate whether to purchase new solutions or wait for legacy procurement platforms to develop AI features. Leading AI procurement platforms have now evolved to meet market demands.
Data Quality: Poor data quality emerged as a significant barrier as many organizations still struggle to connect data directly to value creation and business case metrics.
Security Concerns: CPOs rank data privacy and security as primary external threats, proper safeguards must be established to protect sensitive information.
Talent Gap: Currently there are limited professionals who understand AI as success requires employees with curiosity, adaptability, and technology proficiency.
For procurement pursuing generative AI implementation, Deloitte recommends:
- Explore through reimagining sourcing and procurement
- Prioritize specific use cases for value capture
- Execute the vision through careful technology selection and pilot programs
Deloitte’s research indicates that generative AI might create substantial differences between leading procurement organizations and those slower to adapt. Enterprises achieving procurement excellence through AI adoption focus on creating seamless, efficient processes while maintaining robust security measures.
Success Through AI-Enabled Procurement
Organizations implementing generative AI through strategic platforms demonstrate measurable improvements in procurement efficiency and stakeholder satisfaction. SiriusXM exemplifies this transformation, processing over 200 projects through Levelpath’s AI platform, with projections reaching 300 by the end of 2024. Their procurement team leverages AI capabilities to automate notifications, predict timelines, and make data-driven decisions about supplier relationships and contract management.
The mobile-first nature of AI-enabled platforms proves particularly valuable for modern procurement teams. SiriusXM’s procurement leadership notes the ability to review projects, tag finance stakeholders, and manage workflows from any location – creating a more responsive and delightful procurement experience for all participants.
Key benefits of AI implementation include:
- Automated contract monitoring to prevent costly auto-renewals
- Enhanced visibility into supplier relationships and spending patterns
- Streamlined approval workflows reducing cycle times
- Data-driven insights supporting strategic resource allocation
- Improved stakeholder engagement through real-time status updates
The path toward delightful procurement experiences requires balancing innovation with practical implementation. Success demands careful consideration of enterprise readiness, data quality, security requirements, and talent development. Enterprises that thoughtfully navigate these considerations position themselves to capture significant value from generative AI investments while building stronger, more strategic procurement functions.
As procurement continues evolving, generative AI offers opportunities to transcend traditional transaction-focused operations. Through strategic implementation and careful attention to challenges, enterprises can create procurement experiences that deliver enhanced value while maintaining security and efficiency.
Enterprises that thoughtfully navigate these considerations position themselves to capture significant value from generative AI investments while building stronger, more strategic procurement functions aligned with broader business objectives.
Ready to elevate your procurement strategy? Embrace the transformative power of generative AI with Levelpath. By aligning innovation with practical implementation, we help enterprises create secure, efficient, and value-driven procurement experiences. Take the next step toward building stronger, more strategic procurement functions that drive impactful business outcomes. Let’s navigate the path to delightful procurement together, schedule a demo today!
— Michaela