KPMG: Gen AI Set to Transform Procurement

KPMG has released its AI Quarterly Pulse Survey, highlighting a clear and accelerating momentum in Gen AI adoption across large enterprises.

The survey points to the fact that leaders plan to invest nearly US$114m in Gen AI over the next year. This is up from US$89m in the last quarter and demonstrates the growing enterprise confidence in Gen AI’s ability to offer measurable strategic outcomes.

Alongside this immense growth, procurement is positioned to negotiate enterprise-wide AI service contracts and source and evaluate AI vendors based on new risk and data. 

Procurement will play a key role in governing and enabling how AI is scaled across the organisation, helping to manage supplier risk, enhance ROI and rethink team capabilities.

Steve Chase, Vice Chair of AI and Digital Innovation, KPMG US, explains: “We’re seeing a clear shift from pilots to scaled execution, with CIOs increasingly leading the charge. While that may seem like a natural decision given the scale of change in both technology and how it’s delivered – AI is also an enterprise transformation.

“It requires rewriting business processes, disrupting offerings, and driving cultural change. Leading organisations are creating space – often through a dedicated AI leader – to fully own that broader vision and protect the transformation from unnecessary risk.”

AI Agents enter procurement 

The KPMG Q1 2025 AI Pulse Survey highlights how AI agents are entering the procurement function as part of the wider industry shift towards operationalising Gen AI.

Organisations are moving from experimentation to piloting AI agents. Compared to the last quarter, the latter has risen from 37% to 65%.

KPMG points out that there is a growing use of AI agents for recruitment of sourcing, with 26% of organisations using AI agents for recruiting and sourcing tasks, up from 15% last quarter. 

Over the next 12 months, 60% more organisations plan to use agents for this.

This highlights how AI agents are being piloted for automated RFP/RFI generation and response analysis, supplier identification and qualification and third-party risk assessment.

According to the report, 66% of organisations are using AI agents for administrative tasks, up from 27% last quarter. These AI agents can be used for contract review workloads, purchase order processing and scheduling supplier meetings, helping to cut manual workload and cycle times.

A significant proportion of organisations (78%) are using AI agents to analyse complex data sets, up from 70% last quarter. In procurement, this helps with cost forecasting and budgeting, spend classification and analysis, supplier performance scoring and ESG reviews.

Despite the fact that 65% of organisations are piloting AI agents, full deployment remains low at 11%. This highlights how procurement is still in the experimentation-to-adoption phase.

As Gen AI moves from hype to implementation, procurement will benefit from improvements in insight, efficiency and scalability. 

Risk, trust and data

KPMG highlights that trust, risk management and data quality are the top strategic concerns impacting the enterprise adoption of Gen AI for the year.

Procurement is a risk-critical function, responsible for ensuring compliance with regulatory, legal and ESG requirements and managing third-party risk. With 82% of leaders identifying risk management as the top Gen AI challenge, procurement must apply human oversight to AI outputs used in contract scoring or supplier evaluations. 

Structured and timely data is vital in procurement for risk modelling, spend analysis and supplier segmentation. KPMG highlights that 64% of leaders cite data quality as a barrier to Gen AI strategy. Procurement may face barriers if procurement systems lack integration with AI platforms and supplier master data is outdated or inconsistent. 

KPMG notes that 35% of leaders point to personal trust in Gen AI as a key challenge and 32% believe trust in accuracy and fairness will pose difficulties globally by 2030.

Trust in procurement is driven by traceability, reliability and ethical AI, especially in ESG-sensitive categories of high-stake supplier relationships.

How is AI changing the role of procurement?

The KMPG Q1 2025 AI Pulse Survey highlights the transformative impact AI is having on roles by enhancing productivity, automating tasks and allowing human work to focus on strategic tasks.

Over the next 12 months, 76% of leaders agree or strongly agree that AI will automate specific tasks, but will not replace roles entirely.

For procurement, this means rules-based or repetitive tasks, such as invoice validation, supplier data entry or contract matching, are likely to be handled by AI or Gen AI agents. 

The report hints at a broader shift across functions, with 69% of leaders believing AI will help strong performers focus on more strategic work. 

Gen AI is becoming increasingly important in business workflows, with usage rising from 24% to 35% in one quarter. This means procurement organisations could integrate Gen AI into supplier evaluation platforms, sourcing tools or contract management systems.

KPMG highlights how AI will transform procurement from manual processing to strategic enablement. This means AI will support skills development, automate the repetitive and be integrated into daily decision-making.

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