AI is set to transform business operations, with the complex area of procurement ripe for digital innovation that will drive tangible impact.
Procurement plays a crucial role in organizational success because it directly impacts operational efficiency, cost-effectiveness, and customer satisfaction.
However, supply chains are becoming more complex, and teams often lack real-time visibility into the movement of goods, leading to delays and difficulties in managing inventory.
By investing in digital transformation — and purpose-built AI solutions designed for the supply chain in particular — procurement teams can overcome these challenges, keeping costs in check while ensuring the right products are delivered to the right people on time.
Procurement challenges
According to Gartner, 90% of procurement leaders expect supply chains to become even more complex over the next two years. [1]
“This complexity comes from system data and processes — all becoming more intricate as procurement takes on broader responsibilities,” GEP Director of Product Marketing Alex Zhong said in a recent webinar. “Procurement is no longer just focusing on cost savings; it now has to manage risk and sustainability.”
Procurement teams are also held back by operational efficiencies stemming from inconsistent workflows, leading to delays that hinder operational agility.
Manual repetitive tasks further exacerbate these issues, creating scalability challenges that limit the ability to respond quickly to market demands. Making matters worse, many organizations struggle to integrate procurement systems with other enterprise tools, which creates data silos that hurt collaboration.
The absence of real-time visibility into supply chain operations only compounds these problems, preventing teams from making data-driven decisions quickly. On top of this, evolving customer demands are forcing teams to build faster, more efficient procurement processes to stay competitive.
Organizations must therefore adopt AI to build a procurement function that can meet the demands of a dynamic, and increasingly digitized, economy.
How AI can help
AI is transforming procurement with real-time tracking and visibility capabilities that provide end-to-end supply chain transparency. In fact, one manufacturer reported a 95% increase in real-time supply chain visibility after implementing GEP’s AI solutions. This improved insight enables teams to make faster, more intelligent decisions to optimize procurement.
What’s more, AI reduces lead times by streamlining processes, improving supplier relationships, and enhancing inventory management. With smarter tools, procurement teams can ensure timely deliveries and maintain ideal stock levels, avoiding costly overstock and shortages.
At the same time, AI can automate repetitive tasks, transforming workflows; the same manufacturer increased automation levels from 20% to 80% with AI, giving their team more time to focus on strategic initiatives.
AI is also reshaping the way the manufacturer manages contracts. “We expect that in the nine months, almost 75% of their contracts will be authored, amended, and managed using AI — what we call total orchestration of contracts,” said Santosh Nair, GEP’s Chief Product Officer.
Additionally, AI ensures compliance and helps teams hit key milestones by monitoring processes and flagging potential risks. Taken together, all of these benefits can help teams set the standard for what procurement excellence looks like in 2025 and beyond.
To learn more about how AI can optimize your procurement function, watch the full discussion.
[1] Gartner, Radically Rethinking Supply Chain Reorganization, October 2024
