The buzz around Artificial Intelligence (AI) in procurement has reached a fever pitch.

From whispered possibilities to tangible deployments, the integration of AI is no longer a distant future but a rapidly unfolding reality.

This surge in interest is clearly reflected in the market, with research firms like Gartner, McKinsey, and Forrester reporting an unprecedented increase in inquiries related to AI for procurement.

Gartner's staggering statistic of a seventeen-fold increase in inquiries between 2022 and 2023 underscores this pivotal shift, signaling a widespread recognition among procurement leaders of AI's potential to navigate the complexities of modern supply chains.

The prevailing narrative, consistently echoed across industry research, positions AI as the catalyst for a more intelligent, autonomous, and strategically driven procurement function. This convergence of expert opinions highlights the fundamental ways AI is reshaping the landscape, paving the way for data-driven insights, streamlined processes, and enhanced strategic value creation.

At LightSource AI, we believe in cutting through the noise and providing a clear, pragmatic perspective. In this spirit, we've taken a closer look at some recent prominent analyst claims regarding AI in Procurement Technology.

Our aim is to provide a framework for understanding which claims currently hold true based on our market observations, which are likely to materialize given the current software landscape, which appear improbable, and which have been effectively debunked.

While the rapid pace of innovation means we can't cover every claim made over the past few years, we encourage you to share your thoughts in the comments if you believe we've missed a key prediction that warrants further discussion.

Prediction: CPOs must embrace AI procurement tech to avoid a 'cost and agility deficit' (Gartner)

Our Assessment: Currently Accurate and Increasingly Critical.

Gartner's consistent emphasis on the urgent need for Chief Procurement Officers (CPOs) to adopt AI technologies to prevent a "cost and agility deficit" is not just a prediction; it's a present-day imperative.

The data speaks for itself, with a dramatic seventeen-fold increase in interest in AI use cases for procurement in 2023 compared to 2022. This surge indicates a growing awareness among CPOs and digital transformation leaders of the transformative potential of AI and the significant risks associated with inaction.

For CPOs and VPs of Supply Chain, embracing AI is no longer a competitive advantage but a necessity to maintain pace with evolving market demands and optimize cost structures.

LightSource AI empowers procurement leaders with the AI-native tools needed to not only avoid this deficit but to proactively drive efficiency and agility throughout their organizations.

Prediction: Leading organizations have reduced purchasing cycles by up to 48% using procurement orchestration (Forrester)

Our Assessment: Likely to Come True and Already Evident.

Forrester's assertion that leading organizations have achieved up to a 48% reduction in purchasing cycles through procurement orchestration highlights the tangible benefits of adopting advanced procurement technologies.

This aligns with our experience at LightSource AI, where our platform streamlines workflows, automates RFx processes, and provides enhanced visibility, directly contributing to accelerated procurement cycles.

For Procurement Managers, Global Category Managers, and Buyers, the ability to significantly shorten purchasing cycles translates to increased productivity, faster time-to-market, and a more agile response to business needs.

This efficiency gain is a core tenet of the "Buy Better, Ship Better" philosophy that LightSource AI enables.

Prediction: Gen AI has the capacity to automate 50 to 80 percent of current procurement work (KPMG)

Our Assessment: Likely to Come True with Nuance.

KPMG’s analysis of Generative AI's (GenAI) potential to automate a substantial portion of current procurement work is a compelling vision of the future.

While the 50-80% range is ambitious, the underlying trend is undeniable. GenAI has the capacity to revolutionize tasks like contract review, supplier identification, and even initial quote analysis, freeing up procurement professionals to focus on more strategic initiatives.

For Global Sourcing Managers and Procurement Analysts, this level of automation promises to enhance efficiency and allow for deeper, more strategic engagement with suppliers and market dynamics.

LightSource AI is at the forefront of leveraging AI, including GenAI capabilities, to automate routine tasks and empower procurement teams with more time for strategic value creation.

Prediction: AI is turning the sourcing of suppliers into a skill rather than a stand-alone function (Gartner)

Our Assessment: Currently Accurate and Increasingly Integrated.

Gartner's prediction that AI will transform supplier sourcing into a core skill integrated across the organization is already taking shape.

AI-infused e-sourcing solutions are increasingly capable of handling initial supplier identification, qualification, and even risk assessment. This empowers various stakeholders within the organization to participate in the sourcing process, making it a more collaborative and data-driven effort.

For all procurement roles, from CPOs to Buyers, understanding how to leverage AI for sourcing is becoming a fundamental skill.

LightSource AI's platform is designed to facilitate this integration, providing intuitive tools that enable users across different departments to effectively participate in the sourcing process.

Prediction: AI's progression from assistive tools to autonomous agents in procurement operations will expand (Forrester)

Our Assessment: Likely to Come True Incrementally.

Forrester's anticipation of AI evolving towards autonomous agents in procurement represents a significant step in the maturity of AI in this domain.

While fully autonomous procurement operations are still on the horizon, we are already seeing AI take on more decision-making capabilities in areas like automated reordering and anomaly detection. This progression will empower procurement professionals to focus on higher-level strategic thinking and relationship management.

LightSource AI is strategically developing its AI capabilities to progressively automate routine and complex aspects of the procurement lifecycle, ultimately providing procurement teams with greater autonomy and efficiency.

LightSource AI is strategically developing its AI capabilities to progressively automate routine and complex aspects of the procurement lifecycle, ultimately providing procurement teams with greater autonomy and efficiency. Our aim is not to replace procurement teams but to empower them with AI-driven tools and insights that streamline their work and enhance their decision-making capabilities.

Prediction: Two-thirds (66%) of CPOs believe Gen AI is still years from generating substantive business results (McKinsey)

Our Assessment: Currently Accurate but Rapidly Evolving.

Despite the excitement surrounding GenAI, McKinsey's finding that a significant majority of CPOs believe it's still years away from delivering substantial business results reflects a current market sentiment of cautious optimism. Concerns around accuracy, security, and practical implementation are valid.

However, the rapid advancements in GenAI and its increasing application in procurement suggest that this timeline may be shorter than anticipated.

LightSource AI is actively exploring and integrating GenAI capabilities in a responsible and practical manner, focusing on delivering tangible value and addressing real-world procurement challenges.

Prediction: GenAI use cases will proliferate across the full procurement process, improving speed and efficiency (Gartner)

Our Assessment: Highly Likely to Come True and Already Emerging.

Gartner's prediction of widespread GenAI adoption across the entire procurement process is already gaining momentum.

From generating RFx templates to assisting with supplier negotiations and providing insightful market analysis, GenAI has the potential to significantly enhance speed and efficiency at every stage.

For all procurement roles, this proliferation of GenAI use cases will translate to reduced manual tasks, faster decision-making, and improved overall productivity.

LightSource's mission is to elevate supply management teams with world-class software tools, including GenAI. Our aim is to make the supply chain transparent and fair for everyone, ensuring that both buyers and suppliers benefit from using the platform. Our goal is to simplify tasks and make the seemingly impossible possible by scaling AI-powered solutions.

Prediction: Interest in AI for procurement use cases increased by a factor of 17 in 2023 compared to 2022 (Gartner)

Our Assessment: Currently Accurate and Demonstrates Market Validation.

The dramatic seventeen-fold increase in interest in AI for procurement use cases reported by Gartner serves as a powerful validation of the transformative potential of AI in this domain. This surge in inquiries from procurement executive leadership and IT leaders responsible for procurement technology underscores the growing recognition of AI as a critical enabler for achieving strategic procurement goals.

LightSource AI views this market validation as a testament to the increasing demand for AI-native sourcing platforms that can deliver tangible results for enterprise procurement.

Navigating the AI Frontier in Procurement

The insights from leading research firms like Gartner, McKinsey, and Forrester paint a compelling picture of an AI-driven future for procurement.

While some skepticism remains regarding the immediate impact of technologies like GenAI, the overall consensus points towards a fundamental shift in how procurement operates.

For CPOs, VPs of Digital Transformation, and VPs of Supply Chain, embracing AI is no longer optional but a strategic imperative to maintain competitiveness and drive organizational agility. For Procurement Managers, Global Category Managers, Buyers, and Global Sourcing Managers, AI offers the potential to automate routine tasks, gain deeper insights, and focus on more strategic, value-added activities.

At LightSource AI, we are committed to empowering procurement professionals with the AI-native tools they need to not just navigate this evolving landscape but to lead the charge.

By focusing on tangible benefits like increased efficiency, reduced costs, and improved collaboration, we are helping organizations "Buy Better, Ship Better" and transform procurement from a necessary function into a critical business driver.

Stay tuned to our blog for more insights and updates on the transformative power of AI in procurement.

We encourage you to join the conversation and share your perspectives on these analyst claims and the future of AI in our field.What do analysts predict about the future of AI in procurement?

Questions about AI in Procurement that this article answers:

• How is AI currently impacting procurement?
• What are some of the challenges or concerns about using AI in procurement?
• How can procurement professionals prepare for the increasing use of AI in their field?
• What are the potential benefits of AI adoption in procurement, according to industry analysts?