Why 2024 will be pivotal for AI in procurement

C-Suite level executives are backing 2024 to be a watershed year for financial impact of generative AI

Research from Icertis that gained insight from 500 senior executives in the US and UK on how AI will transform the workforce, data privacy, and the competitive landscape.  The results indicate the influence of AI on financial performance will reach a critical inflection point for companies across all industries in the year ahead: Nearly half of senior leaders agree AI will impact their bottom line in 2024 and 56 percent are prioritising AI use cases that have an immediate impact on revenue or cost.

Benefits of AI in procurement  

Analysis indicates that 2024 will be ‘pivotal’ in establishing which uses of AI will produce the greatest impact and financial benefit for business.  

"We are living in a revolutionary era for technology with the proliferation of generative AI, yet the question remains whether AI will live up to the hype in terms of its value for businesses. According to this survey from Icertis, the resounding answer from forward-looking leaders is yes – and the profound effects of AI on the enterprise are imminent," said Monish Darda, CTO and Co-founder, Icertis. "2024 will be pivotal to determine which use cases deliver tangible outcomes as companies tap into rich data pools that exist within their own organisations, enabling them to harness the full power of AI and bring it to life across critical functions like legal, finance, procurement, and ESG initiatives."

Key findings 

  • Senior leaders disagree on AI budget governance. 34 percent of executives believe the CEO should oversee the AI budget, 33 percent believe it should be the responsibility of the CTO or CIO, and the remainder are split among various collaborations across the c-suite. Notably, 22 percent of U.K. executives believe the AI budget is owned by the CFO compared to only 8 percent of U.S. leaders who share this perspective, indicating diverging points of view on the role of finance.
  • Financial implications from AI are imminent. Nearly half of c-suite leaders agree AI will impact their bottom line in 2024, while an additional 36 percent predict its financial effects will be realised in the next two to five years. Revenue and cost cutting are the predominant goals of generative AI programs in 2024: 56 percent of leaders are prioritising AI use cases that have an immediate impact on revenue or cost, and 37 percent are prioritising risk management use cases. 
  • Competition will be catalysed by AI adoption. 56 percent of the c-suite agrees that AI will incite greater competition by minimising gaps between competitors, compared to 21 percent who believe AI will lessen competition by exaggerating gaps between early adopters and laggards.
  • AI will become the strategic partner that sits next to you in the boardroom. 90 percent of executives are concerned that AI will ultimately automate strategic initiatives managed by the c-suite, but 52 percent are planning to create new mid-to-senior level positions in 2024 directly tied to AI. Executives also believe employment levels will be the top macro-economic factor driving AI adoption in the year ahead as they seek opportunities to leverage technology in a tight labour market.
  • Leaders are willing to stall AI innovation in the name of ethics. 42 percent of the c-suite favours government regulations around AI that prioritise responsibility and ethics over the opportunity for innovation. This sentiment is directionally higher in the U.K. at 46 percent versus 38 percent in the U.S. In comparison, 30 percent of senior leaders favour government regulations that prioritise AI innovation and offer the opportunity for faster development.
  • Data security is the cornerstone of trust in AI vendors. Data security strategy is the top factor influencing trust in AI technology vendors among executives. Nearly half of c-suite leaders are discouraging employees from sharing company data with public AI models like ChatGPT, including financials, contract data, tech development data, and customer data, in the interest of protecting sensitive information.

PWC research 

It comes as PWC research claims that organisations that go “all-in” on cloud outperform peers and are best placed to create a GenAI advantage.

Chris Oxborough, Cloud Transformation Leader for Risk at PwC UK, said: “Cloud technologies, from infrastructure and platforms, to applications, data, and more, have become a critical enabler of ongoing transformation, and are key to creating continuous value from data and fast-growing technologies including AI and generative AI (GenAI). 

“Forward thinking executives realise that this data, harvested through AI and machine learning, have become a critical component to their growth. The right data gives organisations the power and freedom to create new revenue streams and opportunities. Access to richer, better data and insights enables more robust reporting, and smarter decision-making across the organisation, supply chain and logistics network. The organisations most tuned into these opportunities with the technology to enable change will reap the rewards.”

UK cloud-powered companies are confident that their return on investment (ROI) will reap dividends, according to a PwC survey of more than 400 business and technology executives in the UK. Cloud-powered organisations are those that have gone ‘all-in’ on cloud, with adoption scaled throughout the business, from customer-facing applications and revenue-generating services to back-office and infrastructure. However, only 16% of UK organisations consider themselves to be cloud-powered. 

The remaining organisations are urgently seeking to adopt cloud to modernise core technology, create business value and take advantage of AI; with two thirds of organisations believing they will have all operations in the cloud within two years.


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Other magazines that may be of interest - Supply Chain Magazine | Sustainability Magazine

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