Erik Oberlander, Head of Procurement Value Creation at PwC

AI is everywhere in procurement conversations, but is it really making an impact? Speaking at Procurement and Supply Chain LIVE London 2024, Erik addressed the hype head-on. “I have not seen a real or a single case of a real AI application during the past couple of years across so many different procurement organisations,” he says. Despite constant talk of AI revolutionising procurement, Erik believes the reality hasn’t caught up to the expectations.

“I feel AI, on the one hand, is completely overhyped at the moment, especially in procurement and operations. But on the other hand, it’s also completely under, or procurement bias or completely underestimating its mid and long-term potential.” AI isn’t a magic fix yet, but its future impact could be game-changing.

For procurement leaders, the challenge is clear: avoid getting caught up in unrealistic expectations while still preparing for AI’s long-term potential. The key lies in balancing caution with curiosity — because while AI might not be fully delivering now, those who ignore its evolution risk falling behind.

Natasha echoes this sentiment, highlighting that despite AI’s massive investment - it might not be the holy grail it claims. “Since the beginning of 2023, venture capital has invested nearly US$98bn in AI,” she says. The surge in funding could be said to reflect a belief in AI’s potential, but is it always the right tool for procurement professionals? 

AI’s effectiveness depends on the quality of the data it processes. “I cannot forecast anything. If it's good, it will be garbage in, garbage out,” Natasha warns. While areas such as spend assessment demand accuracy, not every procurement process requires more data. 

“There are some areas where you don’t have to overcomplicate and seek for more data, and you don’t have to have a high degree of accuracy.” Knowing when to prioritise AI and when to rely on simpler methods is crucial.

“If procurement and people have a formula for problem-solving, it really doesn't matter what’s in front of them. They’ll figure it out.” AI can enhance efficiency, but critical thinking and verification are still essential. “That’s how the procurement mind works,” she asserts “we get all the data, we trust nothing. We verify everything.”

The UK’s AI Action Plan is in motion, but a new report from SAP reveals that outdated systems are holding back many high-growth businesses. According to the findings, 27% of these organisations cite legacy technology as a major obstacle to scaling up.

For businesses eager to integrate AI, the challenge is clear — modern solutions don’t always fit neatly into older systems. "Addressing barriers to growth, like digital immaturity, must be a priority for the UK’s high-growth organisations if they wish to reach their potential," says Wesley.

Data issues also loom large. A third of respondents say their AI models struggle due to insufficient datasets, while 34% blame poor data quality and inadequate planning tools for slowing progress.

Despite these challenges, optimism remains. “As our report shows, many have identified AI as the key that unlocks business agility, resilience and efficiency and enables innovation at scale,” Wesley adds.

“As we look ahead to 2025 and beyond, organisations that make bold moves in AI will position themselves to flourish in today’s data-driven economy and lead the way in shaping the UK’s growth agenda."

It is indisputable that AI is reshaping procurement, with many reporting streamlined processes and improved accuracy. Craig agrees: “We are witnessing an initial wave of automation, including the streamlining of tasks like document generation and data analysis, which leads to increased accuracy, improved efficiency and reduced operational costs.” 

By automating repetitive tasks, AI enables procurement teams to focus on strategic decision-making rather than manual processes, however it comes with risks. “When it comes to utilising the power of AI, however, procurement leaders must be aware of potential biases and inaccuracies that may be present in AI models and how this can influence decision-making and recommendations,” Craig warns. Poor-quality or incomplete data can skew supplier selection, misinterpret market trends or lead to inaccurate predictions about supplier performance.

Beyond operational concerns, AI-driven procurement decisions carry ethical implications. As Craig emphasises, staying proactive is key to minimising risk and maximising AI’s benefits: “businesses must critically evaluate AI solutions during the selection process and set up regular reviews to ensure continuous alignment with industry-standard practices.”

AI promises smarter procurement, but too much data can be just as problematic as too little. “We've been hearing this word ‘cognitive overload,’ which I think all of us are struggling with, not just in our work life, but in general,” says Prerna. The challenge isn’t just collecting data—it’s making sense of it.

Without a clear goal, procurement teams risk getting lost in endless data streams. AI tools can quickly become overwhelming rather than useful. “If you kind of start with that, get all this data... without a clear view of what is the story you want to tell, what problem you're looking to solve, then you're getting too bogged down with that data.” 

The hype around AI can also lead to poor adoption. “I met them a month later and they were like, ‘I've deleted that app on my phone because it was way too much.’” In this case Prerna says “It creates more issues than it solves, really.” It is clear then, that without proper strategy, AI can create more confusion than clarity - so the key lies in intentional use, not just more data.

AI is moving fast and logistics is racing to keep up. “Artificial intelligence and machine learning will play an increasing role throughout 2025 to further maximise the value of the existing fleet,” says Andrew. 

Companies are already using AI to compare planned delivery schedules with actual performance, pinpointing problem areas that slow deliveries down. That being said, with AI evolving at breakneck speed, traditional logistics strategies won’t cut it. Without proper oversight, automated decisions could create unforeseen inefficiencies or biases in route planning. 

Andrew believes it will be the companies that embrace AI’s potential while keeping human expertise in the loop will lead the way as we enter the second half of 2025: ”By comparing planned delivery schedules with the actual performance over a period of time, AI can highlight specific addresses that cause problems – from a certain location that demands additional time to make the delivery to the impact of school drop off on local roads – to achieve far more delivery certainty. Companies actively including essential driver feedback – such as potholes slowing down traffic – into the mix, can also avoid delays and improve overall delivery performance.”

“AI isn’t just the future, it’s the now,” says Jason Foster, Founder & CEO of Cynozure. Yet, Cynozure’s latest survey ‘The Path Ahead’ exposes a major issue; AI strategy lacks clear ownership. 

“This disconnect between leadership and the need for execution puts organisations at risk of falling behind in a world where innovation waits for no one.” More than 85% of organisations report that their Chief Data Officer (CDO) or Head of Data owns data strategy, but only 25% say the same for AI. Shockingly, 20% admit they have no clear AI leadership at all. In a world where AI drives efficiency and innovation, this gap is a serious risk—but Jason also argues it represents an opportunity.

Procurement teams are also feeling the shift. AI is no longer a luxury, it’s become an essential. However, its success requires more than investment - it needs strong data governance, AI literacy and executive buy-in. “This year will undoubtedly bring new challenges, but it will also bring unprecedented opportunities for those who are prepared,” concludes Jason.

It’s clear from these experts that AI isn’t going anywhere. Though, whilst it might be here to stay, it needs time to settle just like past technological shifts. "There's no doubt for me that AI is going to stand forever,” Olivier said at Procurement and Supply Chain LIVE London 2024. He compared AI’s trajectory to the internet and cloud computing — both met with skepticism before becoming indispensable through a hybrid model. 

“When the internet arrived, people questioned whether it would really change everything. Now, nobody even discusses it. It’s obvious. But it took 20 years. Cloud was the same and AI will follow the same path.”

AI is already reshaping procurement software and beyond: “It’s obvious that if you look at the way AI works, it’s going to change the way software is designed, the way IT projects are put together.”

The real challenge will be establishing clear rules to ensure AI’s ethical and effective use. Hype aside, these experts argue that businesses need to focus on governance, data integrity and long-term strategy. As AI integrates deeper into operations, those who adapt will thrive in this new era of intelligent decision-making.

To read the full article in the magazine, click HERE.

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