Procurement is in its digital transformation era. Gone are the days when procurement was simply used to identify the lowest price or process transactions. Now, companies should use procurement to help drive enterprise-wide goals like innovation, supply assurance and resilience and, of course, cost control. A company’s procurement function should be central to shaping business strategy and managing risk, especially as supply chains grow more complex.
This evolution is already evident and the scope of procurement teams has expanded significantly: 79% of procurement teams now report handling more diverse business objectives than in the past three years.
With the introduction and specialized use of AI, advanced analytics and unified internal data, procurement teams have the power to influence smarter decision-making, anticipate more risks and create outputs that contribute meaningfully to C-suite conversations.
Why procurement’s role is expanding
Procurement has a strategic advantage that other business teams may not. They touch many legs of a network, including suppliers, partners and internal stakeholders. It is involved in many different aspects of a business, from bringing a new product or service to market (or vice versa), to expanding to a new market or M&A activity. This position provides visibility into influential areas that directly impact success, such as supplier performance, risk exposure and sustainability, regulatory concerns, back-ups due to supply issues, etc.
As the industry grows more intelligent, suppliers continue to be valuable sources of innovation that enhance both systems and products. Because of their positions, procurement teams can identify and use these innovations as competitive advantages.
At the same time, compliance is a crucial part of procurement. As global regulations (e.g., data privacy, AI, business relationships, tariffs) and environmental, social and governance (ESG) requirements become more complex, procurement teams have to manage geopolitical factors, as well as financial and environmental risks, all while ensuring regulatory adherence.
Recent data shows companies are moving in the right direction: Of companies that have fully deployed AI tools, a striking 98% feel prepared for geopolitical risk — a major concern in procurement. By comparison, among organizations still implementing AI, just 21% feel prepared.
This expanding scope of responsibility means procurement is keen to benefit from the use of AI.
How AI, analytics and data are driving the change
We already know AI is transforming day-to-day processes. In our world, it’s drafting RFPs, summarizing supplier data and contracts, identifying anomalies, flagging potential compliance issues, the list goes on and on. This transformation is accelerating rapidly, with 75% of procurement organizations reporting increased investment in generative AI. Perhaps more telling, 48% of procurement professionals view this change as an opportunity, while only 11% see it as a threat. This unprecedented automation reduces cycle times and enables more context-aware and coordinated decision-making; however, most importantly, it enables procurement teams to do things they will never have time to.
Advanced analytics also provides a clearer view of what’s happening and what’s likely to happen next — a business superpower. Many companies base decisions on outdated or legacy information, but to create better informed and more reliable outcomes, current data is key. Decisions are driven by what’s happening now, not in the past. For example, teams can monitor spend, forecast supplier risks, observe performance and model scenarios, all with real-time information. With AI agents in play now, many of the actions that these analyses require can be kicked off autonomously.
These capabilities depend on a strong foundation of unified data, rolled up into a single platform. Doing so eliminates silos within a company and ensures consistency and accuracy. It also seamlessly enforces company policies and compliance rules while providing an auditable trail of decisions and approvals.
Taking it one step further is the use of AI agents, which, put simply, is software that uses AI to accomplish a goal requiring multiple pre-determined or AI-generated steps. These steps can comprise of AI or non-AI actions.
Advanced AI’s impact across the enterprise
Many procurement teams already use AI to analyze data, generate reports, predict risks or recommend suppliers; however, this is traditional AI that supports decision-making but still relies on humans to act. Procurement is and will continue to evolve through the use of AI agents that can either act autonomously or in collaboration with humans and everything in between.
In procurement, agentic AI can be used in these ways:
- Autonomous sourcing: An AI agent that can create an RFX, invite suppliers, evaluate responses, make award suggestions and so on.
- Supplier onboarding: An AI agent to autonomously interact with suppliers, validate documents and complete onboarding actions.
- Identifying and mitigating risks in the supply chain
- Monitoring compliance with contracts and regulations
- Tracking supplier performance and ESG metrics
- Negotiating or even initiating certain routine supplier communications
By embedding these agents into procurement processes, teams can save time, reduce errors and focus on more strategic decisions. The work will move forward autonomously but in alignment with the procurement team’s goals.
Building a more strategic procurement function
Shifting from a role that’s simply transactional to one that embeds strategy requires planning and integrating the right tools. The transformation typically happens in stages, beginning with an assessment of current processes and tools.
Teams should start by identifying activities and tasks that can be highly automated using AI. While AI can generate value by tackling larger objectives, the more likely impact is going to be handling several little things that take up a lot of time. This will free up time to focus on the relationship side of procurement.
However, in order to do this well, a scalable platform is essential. The technology should integrate with existing systems, support automation and grow with the organization. Emerging capabilities like agentic AI can then be layered on to deliver even greater strategic impact without disrupting core processes. Ultimately, AI is only as good as the data it has access to. If the data is not controlled, governed and accessible, it is not going to yield the results that are expected.
Why procurement belongs at the strategy table
Leaders who have the capability to create more strategic procurement teams should do just that. There’s no better time than now to integrate procurement on a higher level.
By investing in AI-centered tech, embedding intelligence into workflows and focusing on supplier and stakeholder relationships, organizations can position procurement teams to become key partners to prepare for and navigate what’s ahead.
