Procurement invests in AI & data to boost digital efficiency
The latest "State of Source-to-Pay Digitization 2025" report from Ardent Partners reveals growing investment in procurement technology and a marked shift towards artificial intelligence use among procurement teams worldwide.
The report, now in its second year, draws on survey and interview responses from 358 procurement executives globally. It examines the evolution of procurement priorities, technology strategies, and investment patterns among large organisations.
Budget growth
Findings indicate that over half of Chief Procurement Officers (CPOs) - 53% - have increased their source-to-pay (S2P) technology budgets when compared to the previous year. This figure represents a notable jump from 30% in 2024, suggesting a strengthening confidence in digital solutions as a means of enhancing performance and resilience.
The report attributes this increased investment to the challenging operational climate in which procurement works. Global trade policies and tariffs have fluctuated, prompting teams to focus more intensely on cost controls, supply risk, and the streamlining of operational processes. With 90% of CPOs expecting 2025 to be more challenging than 2024, procurement's priorities are shifting accordingly: 71% are focused on delivering cost savings, 42% on reducing supply risk, and 37% are prioritising digital transformation efforts.
Vishal Patel, Senior Vice President Product Marketing at Ivalua, said:
As external challenges evolve and supply chains recalibrate from recent disruptions, organizations are re-evaluating costs, dependencies, and resilience. Procurement is once again stepping into the spotlight, with technology now central to business performance.
AI adoption
The report highlights a significant acceleration in the adoption of artificial intelligence (AI) within procurement. Nearly half of all CPOs report some form of AI usage today, while 72% of respondents believe AI's impact will be either transformational or significant in the near future.
Current AI use cases range from supplier discovery, spend analysis and contract analysis, to sourcing activities. Many CPOs, however, acknowledge that AI effectiveness is closely tied to the strength of foundational data, clarity in business case, and careful implementation strategies.
When it comes to the expected benefits from AI, 79% cite productivity gains as their primary objective. Additionally, 49% expect AI to enhance decision-making, 30% look for improved stakeholder engagement and satisfaction, 27% for smarter forecasting, 40% for efficiency gains, and 32% for potential savings.
Importance of data
The research identifies data quality and access as critical enablers for successful digital transformation and AI adoption. Approximately 48% of CPOs surveyed agree that "better data visibility and analytical capabilities" would be the most effective way to improve performance in their organisations.
S2P platforms are seen as instrumental in enabling procurement teams to make quicker, more informed decisions, and operate more consistently. Yet, poor data quality or limited access to data remain the most cited barriers to effective S2P technology use, flagged by 42% of respondents.
Vishal Patel also commented on the role of data in this ongoing digital transformation:
To fully realize AI's promise and maximize its impact, organizations must treat data as a core enabler of transformation and innovation. That requires investing in data quality, building AI literacy, and adopting integrated S2P platforms built on strong data foundations. The AI transformation will be a continuous journey that demands agility, trusted data foundations, and the ability to adapt at scale.
Looking ahead
The survey responses suggest that the procurement function is undergoing a period of change, with technology set to play an increasing role in its evolution. Nearly half of CPOs (47%) plan to adopt integrated S2P technology to address operational complexities and improve management of supply chains over the coming year.
The "State of Source-to-Pay Digitization 2025" report was commissioned by Ivalua and conducted by Ardent Partners to evaluate procurement's position in a time of ongoing uncertainty and change. The findings shed light on the priorities and challenges confronting decision-makers as they pursue greater efficiency, risk management and value for their organisations through data and technology-driven strategies.
