PROCUREMENT FALLS BEHIND AS AI INVESTMENT LAGS, SAP TAULIA FINDS

KUALA LUMPUR, Nov 25 (Bernama) -- The procurement function continues to lag in artificial intelligence (AI) adoption due to chronic underinvestment, even as AI uptake accelerates across industries, with only 35 per cent of global leaders prioritising procurement and supply chain management for AI investment and growth, according to new data from SAP Taulia’s AI in Procurement Report.

The findings show procurement trailing well behind other key business functions, including finance (43 per cent), data analytics (39 per cent), and cybersecurity (38 per cent).

Despite this, pressures on procurement teams are rising, with 72 per cent of procurement professionals reporting increased demands on their function over the past year, while 44 per cent believe AI will play a major role in addressing these challenges—highlighting a clear disconnect between practitioner appetite and leadership prioritisation.

According to a statement, procurement leaders also broadly agree on where AI can deliver the greatest impact in the coming years, particularly in risk detection and mitigation (28 per cent), data-led strategic decision-making (26 per cent), and spend analysis and reporting (25 per cent).

Even with limited investment, procurement and supply chain teams are already incorporating AI into their workflows. Fifty-five per cent are using AI-powered procurement platforms such as SAP Joule, Ivalua or JAGGAER, while 63 per cent are using generative AI tools including ChatGPT, Gemini or Microsoft Copilot.

Among those utilising these technologies, nine in 10 (90 per cent) procurement leaders say AI automation is enabling them to focus on higher-value activities such as relationship management, risk oversight and long-term value creation. Additionally, 88 per cent say AI is freeing up capacity for strategic work, and 87 per cent note that data-driven insights are giving procurement a stronger voice in business decision-making.

The research also identified several barriers to wider AI adoption, with 35 per cent of procurement professionals citing low awareness or understanding of AI’s benefits among senior leadership, alongside concerns over data security and compliance (36 per cent).

Other obstacles include limited internal AI expertise, a lack of alignment with broader digital strategies, insufficient training, workflow integration challenges (31 per cent) and poor data quality (30 per cent).

The report is based on a survey of 600 senior decision-makers in procurement roles with responsibility for supply chain operations.

-- BERNAMA