Historically hard-to-procure spend areas that are complex and high-value, like indirect spend or sourcing of services, have proven an enduring bottleneck for technology. Machines struggled to comprehend nuanced requirements, leaving such tasks firmly in the hands of human expertise. However, the landscape is rapidly shifting. By 2025 and beyond, advancements in AI promise a revolutionary change. Procurement professionals could shed the burden of crafting exhaustive briefs. Instead, they could collaborate with AI systems honed by years of experience and vast datasets of procurement workflows.
These AI partners would provide immediate access to tailored insights and resources. This could enable procurement teams to launch efficient and highly customised sourcing strategies. This evolution not only optimises time and resources but also positions the CPO as a strategic leader within the organisation.
Customers describe this transformation as nothing short of game-changing. A recent independent assessment into the benefits of the technology, conducted by analysts at global research and analysis firm HFS, highlights just how transformative this technology is. It introduces an unprecedented level of transparency to procurement—something the industry has long strived for. Historically, bidding for complex services has meant painstakingly crafting lengthy, intricate RFPs. This has often made it challenging to fairly and thoroughly evaluate vendors’ solutions, pricing, and alignment with requirements like diversity, sustainability, and cultural fit.
Doing this repeatedly at scale is a Herculean task. But imagine a future where you can discuss every aspect of a sourcing brief with an AI partner. THat partner would be a tireless, infinitely patient system with flawless recall and meticulous attention to detail. These emerging AI systems are not just tools; they act as informed colleagues. They process and synthesise vast amounts of data in seconds, offering precise, data-driven insights.
Better still, they simplify the process of generating market-ready responses, ensuring alignment with your organisation’s policies on compliance, governance, and ethical sourcing. The result? Procurement teams are freed from 99% of the drudgery, empowered to focus on strategy and innovation, while achieving fairness and transparency at levels previously unattainable.
By partnering with this new class of AI agents, buyers not only work smarter, they also enhance their reputation across the enterprise. After all, introducing new, data-driven processes that identify the best providers, proposals, and outcomes will lead to improved business metrics, enabling procurement to add more strategic value and help drive new growth. As the effectiveness of these processes becomes more visible, increasing numbers of stakeholders—including those typically a little suspicious of what they see as over-rigid procurement strictures—become engaged, bringing more spending under management.
However, it’s important to emphasise that, unlike other areas, in complex sourcing we’re not yet talking about machine-to-machine-only transactions. Complex purchasing decisions always involve relationships; buyers and sellers need to feel confident and trust each other.
To be honest, I can’t stress enough that relationships, both internal and external, will always be crucial in procurement. These will continue to be managed and led by people, while AI agents do the background work and the heavy-lifting and manual work that at the moment slows you down. In fact, a large part of B2B procurement will increasingly be driven and orchestrated by human experts working in productive and synergistic partnerships with AI.
My advice is to approach AI as you would any trusted colleague—by investing time and effort into building a strong partnership. The potential value lies in the prompts, strategies, and guidance you provide to unlock the power of machine learning, predictive analytics, and Agentic AI within your organisation. For example, you might ask, “Scan my spend portfolio to identify the top three categories with the most supplier fragmentation. Recommend which 15% of my supply base could manage the majority of my spend.”
Autonomous sourcing can then pinpoint categories like employee learning and development, cleaning services, and marketing events, which collectively involve over 2,000 suppliers. With sufficient data, it can instantly identify the 14 suppliers in each category capable of managing the majority of the volume. From there, it outlines three-panel sourcing projects, selecting the most suitable suppliers for each event and providing a clear, actionable framework for execution.
Similarly, you could ask, “Who in my company has run a penetration testing services project in the last 18 months? What were the results, which suppliers bid, and what were the planned contract durations? Provide any insights I could benefit from.” The AI identifies three projects conducted in Europe, LATAM, and the US. Remarkably, it uncovers that one supplier was awarded two of these projects at different price points—something no one had realised.
Within seconds, the system also highlights that one project is performing better financially than any of the previous bids. It recommends consolidating all three projects into a single sourcing event to capitalise on efficiencies before the contracts expire. The AI then prompts the user: “Would you like to combine these volumes and create a new project?” The response? A resounding yes.
By the way, these are all queries you can make today, not tomorrow. So, my advice to the forward-thinking Chief Procurement Officer as we close out 2024 is to start thinking ahead. These are the kinds of prompts you should be exploring with your new AI partners in 2025. Now is the time to get familiar with how AI can reshape your procurement strategy and unlock unprecedented value.
Click here to book a demo of our award-winning AI-driven souring platform and see how you can super-charge your team's impact across the enterprise.