Zip State of Spend: Companies Shift from People to Tech
Zip, the world's leading agentic procurement orchestration platform, has published its inaugural "State of Spend" report. This global research collates the views of over 1,030 C-suite and senior decision makers responsible for items such as supplier spend in procurement, finance, IT and operations shows just how drastic this shift has been for businesses – cutting costs on human labour in favour of AI capabilities.
The report has examined how organisations are approaching AI adoption, spending priorities and workforce planning to provide a data-backed view of the forces reshaping enterprise operations.
AI has become a central point when it comes to the hiring decisions for 75% of organisations, with nearly one in five companies now requiring their managers to show why they must hire a new employee and not use AI instead.
"For the first time in history, companies are looking at everything through the lens of AI," says Nick Heinzmann, Head of Research at Zip.
"When they do hire people, companies are prioritising AI fluency above all other skills, while cutting consultants and analysts across the board.
"AI's impact on the workforce is no longer a hypothetical, it's here."
Technology spending rises as professional services face cuts
These remarks have been resoundingly backed up in Zip's findings. It reveals that 70% of organisations are testing or using AI in business operations, with adoption rates challenging assumptions about how slowly enterprises adopt new technology. However, only 17% reported deploying it widely across multiple processes.
These figures show how the mindset is shifting, with AI-first thinking reshaping the priorities of the spend. At the top of the list, companies are cutting professional services such as consulting and legal advice, which represent 40% of reductions, along with temporary workers and contractors at 33%, and travel and events at 34%.
At the same time, technology spending is rising, with 37% planning to add new vendors, particularly AI tools. Companies are not slashing spend, instead, there is a purposeful shifting in the resources from people-dependent services to technology.
- 75% of companies now factor AI into hiring decisions, with 17% requiring proof that AI cannot perform the role before approving new positions
- AI fluency has become the top skill priority for 56% of executives over the next three years, displacing traditional business expertise
- IT departments are expecting to expand while other functions shrink, with 60% of business cases modelling flat or reduced headcount due to AI
- Technology spending is increasing despite people cuts, with 37% planning to add new vendors, particularly AI tools
- Company size determines AI strategy, with 80% expecting AI to reshape tech stacks but smaller companies planning overhauls while larger enterprises expect existing vendors to add AI features
- Confidence outpaces readiness, with 83% expressing optimism about AI deployment while most admit being only "somewhat prepared"
- Procurement’s value to business leaders is increasing, with eight in ten respondents expecting procurement’s overall influence will increase over the next 5 years. The top three qualities people reported looking for in their procurement process is that it is user-friendly, connected across functions, and automated by AI
Human skills remain critical
Zip also finds a shift in the way companies value their employees, with AI fluency topping the list for the most valued skills with a new hire - 56% of those surveyed said it was top of their list for the most desirable skill. This was followed by data analysis (43%).
When discussing the second and third most prioritised skills, each business said it was a distinctly human capability.
For example, finance chose risk anticipation, procurement selected supplier relationships and legal emphasised change management.
This suggests a future where AI and data capabilities become baseline requirements, while uniquely human skills like relationship management and strategic thinking provide competitive advantage.
The research was undertaken by Zip in partnership with research firm Prolific and represents organisations across North America, Europe and emerging markets. The complete report is available at https://ziphq.com/spend.
Zip's State of Spend is the first major initiative to come from Zip Community, an exclusive network where procurement and finance leaders navigate AI-powered business transformation together.
Members connect through private Slack channels, in-person dinners, exclusive AMAs with industry experts and Zip Academy certifications. Learn more at ziphq.com/community.
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Nick Heinzmann
Head of Research
