The AI adoption gap in procurement: challenges and future trends

Technology has the potential to transform the way in which businesses operate, and procurement is no exception.

 

Armed with information around what organisations are spending and with which suppliers, procurement teams can set about ensuring they are obtaining value for money. That could lead to making decisions on switching suppliers, consolidating the number of suppliers used and taking steps to ensure spend is better controlled.

 

Such insight can also help teams channel spend through approved suppliers, which meet wider company mandates for responsible business and sustainability.

 

Amazon Business’s 2025 State of Procurement Data report provides a glimpse into both how technology is currently being used, and the emphasis procurement leaders now place on it.

 

The priority for generating better insights into spend and other data varies across EU markets, with the UK leading at 64%, followed by Spain (59%), France and Italy (both 57%), and Germany (46%).

 

Nearly half of procurement leaders highlight efficiency and complexity as their primary challenge, with rates ranging from 42% in Spain to 49% in the UK and Germany. Internal system inefficiencies are particularly prominent in France (64%), Italy (62%), and UK (60%).

 

When it comes to the use of artificial intelligence, the fall is more notable. Only four in 10 (42 per cent) of procurement functions use AI to optimise the decisions they make, and this has fallen by 5 per cent over the past year.

 

AI, though, has potential to make even better use of data, providing quicker and more reliable information, and even providing glimpses into likely future demand and pricing. It’s also vital in helping to identify risks, whether from overreliance on particular suppliers or regions or the financial health of individual organisations.

 

It’s no surprise, then, that 68 per cent of senior leaders and 61 per cent of decision-makers see using AI to analyse data and optimise operations as very important and/or a top-three priority for the next two years. In fact, this was the most common top priority for senior leaders, reflecting the growing emphasis on AI.

 

There are signs that investment in this area is coming. More than a third of respondents (38 per cent) say they plan to invest in AI demand forecasting over the next two or three years, with the same number intending to develop capabilities in AI-driven spend analysis and AI automated procurement processes.

 

Only slightly fewer (37 per cent) will use AI to help with supplier risk management, and 36 per cent intend to use AI-powered chatbots and virtual assistants. Investment intentions in AI are remarkably high across EU markets, ranging from 93% in Italy to 98% in France, with specific focus on spend analysis (UK 47%, Spain 40%, Italy 38%).

 

One technology procurement leader is looking at how AI could help operations: “Data cleanup is an area where AI is helpful, and we are also looking at AI in a couple of other areas, including automation, contracts and purchase over management.”

 

Yet there is also an awareness of the risks that come from a greater use of AI and associated reliance on technology. While AI adoption is high on the agenda, procurement teams across the EU are focusing primarily on short-term cost reduction rather than strategic AI implementation, with markets like the UK (32%), France (43%), and Spain (40%) showing strong interest in learning more about AI’s potential for advanced data analytics. And 34 per cent of senior leaders and 30 per cent of decision-makers are worried about cyber-security threats.

 

The benefits of AI for procurement teams and organisations, though, are evident. “Technology plays a critical role in managing today’s supply chains from embracing emerging technologies such as AI and machine learning to investing in procurement analytics and insights,” says Brenda Spoonemore, VP of Commercial and Public Sectors at Amazon Business.

 

“This digital transformation is revolutionising procurement, providing customers with greater efficiency, transparency and cost-savings.”

For more information on how Amazon Business could help your business get valuable insight through using AI, visit business.amazon.co.uk

To access the report, visit business.amazon.com/en/cp/state-of-procurement-data - download-report.