Why AI Adoption is Gathering Pace in Procurement

AI adoption is gathering pace across procurement, with the technology playing a growing role in decision-making and long-term strategy.

That’s the view from a new benchmarking report, AI Adoption and Its Impact on Procurement, released by supply chain consultancy ProcureAbility, part of the Jabil group. 

The report is built on responses from senior leaders in procurement and supply chain functions spanning multiple industries. It finds that AI is no longer being applied solely for operational efficiency but is now influencing how organisations shape procurement strategy and manage suppliers.

Procurement leaders show high AI satisfaction

The report shows that AI satisfaction levels among procurement professionals are strong, with 92% of respondents saying they are pleased with how related solutions are working in their functions.

Such tools are being deployed across a range of procurement activities, with supplier discovery and selection seeing the highest level of uptake. Around 77% of respondents report using AI in this area, followed by spend analysis and categorisation, used by 76%.

AI’s perceived benefits go beyond simple cost reductions. While 55% point to cost savings and spend reduction as a major benefit, a further 54% say the technology supports their sustainability goals.

Other reported advantages include improved supplier selection and management (47%) and time savings through better process efficiency (44%).

While most procurement teams are still targeting specific pain points, rather than rethinking their approach from top to bottom, investment plans are clear. Nearly nine in 10 organisations (88%) say they intend to increase their AI investments in procurement over the next 12 months. At present, 59% of organisations use AI to support targeted initiatives rather than applying it as a comprehensive strategic framework.

The overall picture, though, suggests that AI is moving from being an efficiency tool to a central part of how procurement adds value.

“AI is no longer optional in procurement; it’s a critical driver of competitiveness,” states Darshan Deshmukh, President of ProcureAbility.

“Organisations that move beyond tactical use cases to embed AI strategically will unlock transformative benefits in cost management, supplier relationships and operational performance.”

Barriers persist

Although AI adoption is growing, organisations face challenges around scale and execution.

ProcureAbility's report highlights a gap between adoption and confidence in measurement. While 90% of respondents say they are “somewhat confident” in evaluating return on investment (ROI), only 5% say they are “very confident.” Another 5% report being “not very confident” at all.

Key structural and cultural barriers continue to hold some organisations back. A lack of proven examples is the most cited obstacle, mentioned by 35% of those surveyed. This is followed by resistance to change within organisations (29%) and unrealistic performance expectations (23%).

Satyen Pathak, Managing Director for India at ProcureAbility, points to the importance of mindset and process when building an AI-ready function: “The most successful organisations are pairing technology deployment with cultural change.

“Building an AI-first mindset within procurement teams is now as important as selecting the right toolsets. Identify a handful of use cases to test the hypothesis, create value and drive adoption within the organisation. It’s all about ‘how’ AI integrates within your organisation and not ‘if’.”

Making strategic gains

The report suggests procurement leaders are using AI to unlock value in a phased approach.

By focusing on clear, measurable use cases such as supplier discovery, categorisation and spend analysis, teams are learning how to deploy these technologies in ways that meet organisational needs and can be scaled.

Still, for many, AI is not yet a tool for full-scale transformation. The reliance on narrow applications suggests organisations are cautiously building confidence in AI before undertaking broader operational shifts.

The report underlines the need for better ROI frameworks and more robust change management programmes to enable deeper adoption.

To realise AI’s full potential in procurement, the report highlights the need for internal alignment and investment in people as well as tools. Training, change management and shared examples of successful implementation will be critical to scaling AI’s impact across the procurement lifecycle.