Gartner has identified three pivotal advancements in generative AI (GenAI) that are set to transform procurement: agentic reasoning, multimodality, and AI agents.
These developments promise to significantly enhance the efficiency and strategic value of procurement functions, according to Ryan Polk, senior director analyst in Gartner’s Supply Chain practice. He added that, “These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly.”
A recent Gartner survey revealed that 72% of procurement leaders are prioritising the integration of GenAI into their strategies, recognising its potential to streamline processes, notably in contract management.
Key Advancements
- Agentic Reasoning: This innovation allows GenAI to mimic human-like decision-making, enabling procurement professionals to analyse complex scenarios with greater accuracy. “Agentic reasoning will empower procurement functions to make informed decisions at unprecedented speeds,” Polk noted.
- Multimodality: This capability enables GenAI to process diverse data types—text, images, and audio—enhancing its usability and allowing procurement teams to gather comprehensive insights. This will lead to better-informed strategies and more effective decision-making.
- AI Agents: Autonomous systems that can perform tasks and make decisions are poised to automate many procurement activities. This shift will free up human resources to concentrate on strategic initiatives and complex problem-solving. As these agents integrate into procurement technology, the role of procurement professionals will evolve towards strategic oversight and innovation.
Strategic Recommendations
To harness the benefits of GenAI, Gartner offers three key recommendations for Chief Procurement Officers (CPOs):
- Double Down on Data Governance: Effective AI models require high-quality data. CPOs should ensure that procurement data is collected and maintained systematically, focusing on both internal and external sources. Standardising decision-making models and investing in process mining will help uncover valuable “dark data” for AI training.
- Develop Privacy Standards: Collaborating with legal experts to understand AI-related data privacy risks is crucial. CPOs should establish policies governing data rights and incorporate these standards into supplier evaluations.
- Increase Procurement Thresholds: As machine buyers become commonplace, procurement teams will likely shrink, focusing on strategic sourcing and managing exceptions. This transition calls for a shift in how procurement professionals engage with stakeholders and AI systems.
As generative AI continues to evolve, its integration into procurement will not only enhance operational efficiency but also redefine the role of procurement professionals in strategic decision-making.
