Procurement's AI paradox: Why Automation Alone Isn't Enough

Despite procurement automation having enormous potential, most organisations have yet to unlock it. 

According to Gartner’s latest CPO survey, only 36% of CPOs are very confident in their ability to redesign roles and processes around AI. Indicating that individual AI productivity gains are not yet translating to broader team or enterprise outcomes.

The survey showed that while deployments in procurement are improving individual productivity for time savings, output and quality, the results significantly decline when it comes to the overall team output. 

Gartner describes this as the AI productivity paradox.

When an organisation use AI to automate part of a role, the individual may be more productive, but the organisation doesn’t automatically realise the same benefits unless work is redesigned across the function. 

“Procurement teams are seeing productivity gains from GenAI, but without intentional redesign of roles and processes, those gains remain confined to the individual level,” says Fareen Mehrzai, Senior Director Analyst in Gartner’s Supply Chain practice. 

She adds: “To improve returns on their AI investments and unlock organisational gains, CPOs must design next-generation human roles focused on guiding AI toward achieving real financial outcomes, rather than mere efficiency gains.” 

So what does intentional redesign look like in practice? 

For many organisations, the answer begins with automation taking on the administrative burden that has historically defined procurement's day-to-day.

"For years, procurement teams were measured by how efficiently they processed transactions and controlled costs," says Ben Allen, Vice President of Public Sector Solutions at Appian. 

"Today, automation is helping procurement move beyond administrative work and become strategic advisors to the business. When routine tasks like document generation, approvals and compliance checks are automated, professionals can focus on supplier relationships, risk management and long-term planning."

McKinsey research found that procurement functions delivering the best cost and quality performance have achieved an Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margin impact of five percentage points or more.

Additionally, two-thirds of organisations surveyed by McKinsey now formally separate strategic and transactional procurement roles. 

These types of structural shifts reflect the kind of function redesign Gartner says is needed to move beyond the productivity paradox. And with 60% of procurement executives expecting to lean on automation and digital procurement in the next five years (The Hackett Group’s 2025 CPO Agenda), will help procurement to realise the 25 to 40% efficiency gain potential reported by McKinsey.

Data-driven supplier strategies

Redesigning the function, however, is only half the solution. The other is what procurement teams do with the time automation gives back to them, and increasingly, the answer is data-driven supplier strategy.

"For many organisations, procurement data has historically been trapped in spreadsheets, emails and disconnected systems," says Ben. 

This is echoed in Deloitte's 2025 Global CPO Survey, which found that 57% of CPOs cite siloed working as their single biggest barrier to delivering value, with the majority of procurement leaders still fighting the data fragmentation issue. 

Despite this, Ben notes a more optimistic outlook that technology can help to tackle such challenges.

"Modern procurement platforms create a single source of truth, giving leaders visibility into supplier performance, spending patterns, cycle times and potential risks,” says Ben. 

“That changes the conversation with suppliers. Instead of relying on assumptions, organisations can negotiate using real performance data and identify trends before they become problems."

The survey also found that 74% of CPOs are prioritising finding alternative supply sources, and 61% are focusing on strengthening supplier collaboration, suggesting that once the data foundation is in place, strategic supplier management becomes the immediate priority.

“Rather than focusing on collecting more data, organisations are leveraging the supplier data they have to drive better decisions,” adds Ben.

The road ahead

Gartner forecasts that by 2030, 60% of enterprises will have adopted agentic AI features within their supply chain and procurement software, up from just 5% today. 

For CPOs, this means that the window to get the foundational work right is getting much smaller. The challenge, as Gartner's productivity paradox illustrates, is that technology alone isn’t going to close the gap. 

Procurement leaders who are redesigning roles and processes around automation, not just layering AI onto existing ways of working, will be the ones who will succeed in translating individual gains into enterprise-wide outcomes.