Gartner: Generative AI in Trough of Disillusionment

Gartner has released its yearly Hype Cycle for Procurement and Sourcing Solutions, detailing that some organisations are lagging behind in results with Generative AI (Gen AI). 

Labelled as a 'Trough of Disillusionment' by Gartner, this is defined as: "Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters."

Whilst some businesses are reaping the benefits of AI, most are unable to meet expectations. 

This points towards a need for a more strategic approach with Gen AI, otherwise the tech is at risk of becoming a lost product.

The Gartner Hype Cycle

The Gartner Hype Cycles display how companies are adopting technologies and new applications, examining whether they are able to solve real business problems.

The Hype Cycles show how technology will evolve over time, letting businesses understand whether to invest in the technology or wait until something more advanced comes along. 

Risks and rewards are weighed up–whether companies should hop on the early hype or whether they should wait until the technology has proven it can deliver tangible results.

Gen AI in the workforce

If procurement leaders invest in the right technology, they can optimise procurement processes across their teams and see significant improvements throughout the business.

Technology can help teams save money, save time and streamline processes.

However, if technology is adopted before maturation, it runs the risk of over-projecting and not delivering.

Gartner has applied its Hype Cycle for Procurement and Sourcing Solutions to Gen AI, exploring how this tech has been adopted by some companies and whether or not it's paying off.

“Gen AI is proving to deliver process efficiency, better data insights and cost savings for procurement organisations,” says Kaitlynn Sommers, Senior Director Analyst in Gartner's Supply Chain practice.

“However, fragmented and low-quality data across procurement systems can hinder accurate outputs and integrating stand-alone Gen AI solutions with existing platforms is often complex, due to differing technical specifications.

“Despite these challenges, its applicability across the source-to-pay spectrum continues to drive strong interest and adoption.”

Pros and problems

Gen AI is used in procurement to free up staff for higher-value activities, boost efficiency and reduce operational cost. 

The applications automate repetitive and time-consuming tasks, so Gen AI is being used in text-to-process and workflow automation to help with project scoping and contract management. 

Early adopters will see more benefits regarding cost reduction, but there is the risk of fragmented data output, resistance to change and even job security questions.

Regulations of Gen AI need to be made more clear in order to reassure the workforce regarding privacy and job reduction.

Kaitlynn adds: “Organisations that delay action on integrating Gen AI into procurement processes risk falling behind as early adopters overcome these challenges and realise tangible benefits.

“Gartner projects that Gen AI for procurement will become a fully productive technology within five years.”

Gartner states that CPOs should:

• Invest in data infrastructure that standardises information
• Explore vendors and assess how Gen AI solutions meet business needs
• Examine process-specific AI tools which meet main issues
• Encourage adaptation of processes throughout company
• Monitor regulations to ensure appropriate compliance
• Upskill teams in new technology to help them adapt

It is clear that Gen AI comes with its problems and uncertainties, but if CPOs can act early to understand and implement the solutions, their businesses will see major savings in their procurement processes.