As procurement automation and the increased hype around artificial intelligence (AI) technologies continues to evolve, the big question for procurement professionals is: how much of our processes can realistically be automated?
The prospect of fully automated procurement is enticing. However, the reality is that automation will likely complement, rather than replace, key human roles. This is especially the case for those requiring strategic thinking and more advanced stakeholder management skills.
How Much Automation Should We Really Expect in Procurement?
In this post, we’ll take a closer look at six core procurement areas. We firstly assess the current state of automation. Then, we move on to help you understand where procurement technology could make the biggest inroads and impact over the next few years.
1. Procure-to-Pay (P2P)
Procure-to-Pay automation is already well established in forward-thinking organisations, thanks to tools like Robotic Process Automation (RPA) and Machine Learning (ML). These technologies handle transactional tasks such as purchase order processing and invoice matching, freeing up time for more value-added activities.
The future of P2P automation lies in more upstream processes, such as intake management. New tools are helping reduce maverick spend by engaging stakeholders early in the process. For low-value and non-complex purchases, expect near-complete automation. Human intervention will only required for exceptions like pricing disputes or compliance issues.
2. Sourcing
Generative AI is revolutionising the first steps in the sourcing process, and has the potential to assist in evaluating bids too.
Where RPA and ML processes may struggle, tools like ChatGPT are able to draft detailed Request for Proposal (RFP) documents in a matter of minutes. AI also excels in analysing bid data, flagging outliers, and automating supplier communication. These tasks previously required significant manual effort. This not only speeds up the sourcing process but also improves the accuracy and quality of decisions.
However, the key question here is around data protection and breach of confidentiality. To what extent should your organisation allow RFP data to be ingested by a large language model (LLM) application? The long-term consequences of where and how this data will be used are unclear.
3. Contracts
Contract management automation has seen rapid growth. AI tools now handle tasks such as drafting basic contracts (e.g., NDAs) and extracting key contract terms, like payment conditions or liability clauses. Automating renewals, tracking contract spend, and flagging biased clauses in supplier agreements are also becoming common. This ensures compliance while reducing manual contract review work.
When it comes to contract management in general, the future is pretty much here now. Much of this can be automated or considerably sped up. This is especially true in the pre-signature contract phase.
4. Spend Analytics
Many spend analytics platforms claim high levels of automation, but the technology is still developing in terms of accuracy. As machine learning models continue to improve, expect more precise spend classification and more proactive identification of cost-saving opportunities.
In the near future, spend analytics tools will also be able to perform risk assessments on spend data, providing procurement teams with actionable insights.
5. Category Strategies
Creating category strategies can be tedious, but guided strategy platforms like Capella, Cirtuo and akirolabs are simplifying this process.
By consolidating market intelligence and data from multiple sources into one platform, these tools allow procurement professionals to focus on strategy development rather than data gathering. Soon, the automation of much of this process will free up category managers to focus on decision-making and supplier relationships.
6. Supplier Relationship Management (SRM)
Supplier Relationship Management (SRM) is another area where automation is helping procurement professionals reclaim time. Tools that automate supplier surveys, performance tracking, and feedback collection are already being used to streamline SRM processes.
These solutions help procurement teams focus on high-priority tasks, such as building stronger supplier partnerships, rather than getting bogged down in manual data collection.
Conclusion: The Human Element is Here to Stay
The future of procurement automation is exciting, but it won’t make human roles obsolete—at least not anytime soon. While routine and transactional tasks will continue to be automated, strategic thinking and stakeholder engagement will remain key areas where human input is invaluable.
The key takeaway? Embrace automation where it makes sense, and use the time you save to focus on activities that drive real value for your organisation.
Automation in procurement will continue to evolve, and procurement professionals should stay informed about the latest tools available to them.
For more insights, explore our procurement software database or schedule a Power Hour consultation to discuss your specific needs.
