AI in Procurement: Turning Potential into Profit

With AI at an inflection point, the focus in 2025 is on turning AI’s potential into real profit, according to a study released by BCG.

How will AI reshape procurement? What value will it bring? How do companies capture value from suppliers that are also adopting AI? What will the procurement team look like? Will you need a different team? And more importantly, how to get started?

Key takeaways:

·       Cost pressure, volatile market conditions, economic uncertainty, stringent regulations, and evolving buyer-supplier dynamics create a platform to reshape procurement.

·        AI also presents opportunities for companies to gain strategic advantages and operational efficiencies by transforming their own procurement functions and capture value unlocked by AI implementation in their supplier base.

·        AI and GenAI capabilities are already being deployed across the procurement value chain, and companies are seeing immediate impact (e.g., up to 15% savings depending on category, only 70% of buyers' capacity required).

·        The path to capturing value through an AI transformation can be conceptualized with four key pillars: 1. Digital maturity assessment (companies should assess their digital maturity and identify key pain points before diving into tech decisions); 2. Best-suiting technology (off-the-shelf solutions may not address all pain points); 3. Upskilling the team (focus will shift from analytics and operational roles to strategic roles); and 4. Capturing value from suppliers (up to 15% savings is achievable in the medium term, coming mainly from a select group of spending categories, including IT and marketing).

·        AI-driven procurement cuts headcount to 70%, freeing workers and requiring AI skills.