SAP Taulia releases new research revealing that the procurement function is a long way down the priority list when it comes to AI investment
While AI adoption is accelerating across industries, the procurement function is lagging behind due to underinvestment, according to new data in SAP Taulia’s AI in Procurement Report¹.
The new data finds that globally, only 35% of leaders are prioritising procurement and supply chain management as an area for AI investment and growth, leaving procurement trailing behind finance (43%), data analytics (39%) and cybersecurity (38%).
Prioritisation of AI in the procurement function
Current pressures underscore the urgency of embracing AI in procurement: 72% of procurement professionals report that demands on their function have increased over the past year. 44% of procurement professionals believe that AI will have a major impact on solving these challenges, indicating a strong appetite that is not yet mirrored at the leadership level.
There’s strong consensus among procurement leaders on where AI could deliver the biggest gains in the years ahead – from risk detection and mitigation (28%) and data-led strategic decision-making (26%) to spend analysis and reporting (25%). Many also believe AI will streamline sourcing and tendering as well as automating invoice and payment processes (both 23%), freeing up teams to focus on more strategic priorities.
Regional disparities are also evident when it comes to prioritisation. In the UK, just 20% of leadership teams are prioritising AI investment in procurement, compared with 44% in Australia, 41% in Singapore, and 37% in the USA. This data underscores an uneven adoption curve and a persistent perception of procurement as an operational rather than strategic function.
Procurement utilisation of AI
Despite limited investment, procurement and supply chain professionals are already leveraging AI tools. Over half (55%) are using AI-powered procurement platforms such as SAP Joule, Ivalua, or JAGGAER, while 63% are using generative AI platforms including ChatGPT, Gemini, or Microsoft Copilot.
Of those who are utilizing these tools, nine in 10 (90%) procurement leaders say AI automation is allowing their roles to focus on higher-value activities such as relationship management, risk oversight and long-term value creation. Similarly, 88% believe AI is freeing up capacity for strategic work, while 87% say data-driven insights are giving procurement a stronger voice in business decision-making.
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Barriers to adoption
Over a third (35%) of procurement professionals cite low awareness or understanding of AI’s benefits among senior leadership. Top concerns from senior leadership for utilising AI include data security and compliance (36%), alongside limited internal AI expertise, lack of alignment with broader digital strategies, and insufficient training (all 33%). Practical hurdles also include workflow integration uncertainty (31%) and poor data quality (30%).
Underpinning these barriers is a broader cultural issue: procurement is still not universally recognised as strategic enough to warrant AI investment (30%). Without a shift in perception, organisations risk overlooking a function capable of delivering resilience, efficiency, and long-term value in a volatile global environment.
“Procurement sits at the heart of business resilience and supply chain security,” said Danielle Weinblatt, Chief Product Officer at SAP Taulia. “AI presents a tremendous opportunity to elevate procurement’s strategic impact—transforming how organizations manage risk, relationships, and working capital. The key is investing with both immediacy and long-term vision.”
John Roberts, Senior Director, North America Procurement, NTT DATA, also commented “The findings in this report validate what we see every day: AI is a powerful catalyst, and we’re using it to elevate procurement from a back-office function to a strategic partner to the business. As we automate tasks such as invoice processing and spend analysis, it’s not just about cutting costs; it’s about unlocking our team’s capacity to build resilient supply chains and use data for true risk detection. Procurement professionals can’t afford to be laggards in this new ‘industrial revolution’ —investing in AI for procurement is investing in the future agility and survival of the business.”
“It’s a clear paradox – procurement leaders understand AI’s potential for strategic decision-making and higher-value work, but many functions are still overlooked in the wider investment strategy,” said Ashifa Jumani, Director of Procurement, TELUS. “To get past this, we need leadership to champion the ‘why’ behind AI, treating it as an augmentation tool that empowers our people, not as a threat. When we use AI to handle the routine, repetitive tasks, our teams are freed up to focus on strategy, the essential human skills, relationship-building, negotiation, and long-term value creation.”
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