Procurement in 2025: From ‘should we try AI?’ to ‘When can we start?’

A July 2024 Gartner survey found that 72% of procurement leaders are prioritising the integration of GenAI into their strategies. Gartner predicts that as AI agents become more embedded in procurement technology, they will transform the role of procurement professionals, shifting their focus toward strategic decision-making, stakeholder relationship management, and driving innovation.

That elevation has been a long time coming. Historically, procurement has been seen as a back-office function with lots of rules, processes and demands for audit trails and approvals, or a part of finance, struggling to demonstrate measurable value beyond the cost savings and efficiencies it claimed to deliver.

That was in part down to just how hard it is to track and quantify all the complexity of complex sourcing.  However, this is finally changing, as one of AI's most transformative use cases across any business unit is optimizing and automating how companies spend money.

AI-driven sourcing is delivering undeniable efficiencies and measurable improvements to the bottom line, earning the attention of even the most skeptical colleagues in the C-suite. Yet, recognition and success won't come automatically. Now is the time to act. By investing in AI today, you'll position yourself, your team, and your organization to fully harness its transformative potential.

2025: the year AI goes mainstream in company spend

In 2024, AI advanced from holding a Bachelor's degree to earning a PhD. Yet, many CPOs remain on the sidelines, while their peers in marketing and engineering embrace the AI revolution.

By 2025, this hesitation will end. The full spectrum of AI—from LLMs to predictive analytics to autonomous agents—will become procurement's new frontier. To demonstrate its potential, we partnered with HFS Research to validate AI's transformative power in sourcing. Their findings, drawn from customers like T. Rowe Price, Fidelity Investments, and UCB Pharma, were even more compelling than expected: automated spend management is delivering instant savings of 20% by increasing competition and transparency in the sourcing process. At the same time, AI empowers business users to self-serve, enabling enterprises to manage more spend competitively, even with leaner teams.

To be honest, this wasn't news to me. For years, we've been championing the remarkable ROI that AI brings to sourcing. As far back as 2021, we boldly predicted that for procurement to be seen as a driver of strategic growth and enterprise value, CPOs would need to transform their operating models. This transformation would involve:

• embracing a best-of-breed ecosystem that enables multiple digital solutions to work seamlessly together
• enhancing user experience while leveraging advanced technologies to eliminate repetitive manual tasks 
• and empowering the sourcing function to focus on more meaningful, value-creating work.

Fast forward to 2025, and that vision is coming to life. AI is transforming procurement professionals from back-office operators into consultants and trusted advisors with deep business acumen. In that same 2021 forecast, we also emphasized a critical shift that's now taking shape: procurement processes must become autonomous and self-serve wherever possible.

By democratizing procurement—especially for spend outside procurement's direct control—generative AI, working seamlessly with back-office predictive AI, is driving this transformation. Organizations we've worked with since then are now saying that in 2025, the question is no longer if AI should be leveraged in procurement but when will we adopt it—and how fast. The momentum is undeniable, so much so that it's hard to imagine any other technology dominating the conversation next year.

The rising and cumulative value of AI in procurement 
Early adopters of AI in procurement are delivering such remarkable value that their achievements are being spotlighted in company annual reports, as seen with BT.

In its latest report, BT noted that "[Globality's] generative AI features are accelerating our scoping processes and streamlining how we define our needs, while its new E-Negotiation and online NDA tools are simplifying the entire sourcing process." Similarly, Santander has reported significant benefits, while Harold Wu, CPO at T. Rowe Price, credited AI with achieving over $40 million in operational savings—an accomplishment highlighted by the company's CEO in The Financial Times' Ignites news service.

Expect many more public declarations like these in the next 12 months. Looking ahead to 2025 and beyond, my team is confident that augmenting the CPO's office with advanced AI technologies will unlock substantial savings and elevate procurement's role in driving enterprise value.

This optimism is rooted in the actions of a growing group of forward-thinking Chief Procurement Officers who are stepping up to showcase the function's potential. These leaders are demonstrating to their CFOs and CEOs how an AI-led, data-driven approach can deliver transformative value—not just for their organizations, but also for shareholders, partners, and customers.

CPOs are daring to dream at last 
This trend of innovation and value-add is being championed by trailblazing CPOs like Paula Glickenhaus at Bristol Myers Squibb, Cyril Pourrat at BT Sourced, Charles Letizia at Tesco and Matt Prichard at Fidelity. What unites these aggressively innovative and determined leaders is their use of autonomous, AI-enriched sourcing to automate processes and, crucially, make their organizations' indirect spend transparent and quantifiable for the first time.

By embracing this cutting-edge, digital-first approach, these leaders are seeing almost immediate returns in efficiency. In fact, there's a palpable buzz within the profession about the new 'rock star' status of forward-thinking CPOs. Millennials and Gen Z business leaders, in particular, are excited by this momentum, as they view it as the best way to move beyond outdated, cumbersome RFx processes and embrace fast, efficient digital solutions.

I firmly believe that in 2025, we'll see even more innovative CPOs emerge, along with a surge of interest from digital natives in this historically under-automated part of the business. Ultimately, Agentic AI has the potential to not just improve procurement but completely revolutionize the profession, delivering exactly what CPOs have long dreamed of.

By that, I mean when I speak with our customers about the future of AI in procurement, I describe a fully realistic scenario where they can simply ask, "Hey computer, scan my spend portfolio and find the top three categories with the most supplier fragmentation… then recommend which 15% of my supply base could handle the majority of my spend?"

When procurement leaders hear that, they often tell me, "That's my dream." And all the evidence points to 2025 being the year that dream starts to come true—and the CPO begins to earn serious recognition from the board.