Ivalua study finds adoption is on the rise, with UK businesses deploying Gen AI in supply chain and procurement reporting a 44% reduction in manual toil

London, U.K., 11th July 2024. Research from Ivalua, a global leader in Cloud Spend Management solutions, has revealed that almost a quarter (24%) of UK businesses have deployed Generative AI (Gen AI) tools in procurement and supplier management in the last 12 months. A further 55% of UK businesses are either in the process of implementing or are considering implementing Gen AI, while 19% have no plans to implement Gen AI.

The study of 300 supply chain and procurement decision-makers in the UK – launched to coincide with Ivalua’s Innovation on Tour event – found organisations that have adopted Gen AI tools have seen a 44% reduction in manual processes across the procurement and supply chain function. Organisations are achieving these efficiency savings by using Gen AI for task automation (69%), internet research (67%), document analysis (59%), and content creation (48%).

The findings also show optimism regarding how Gen AI will improve procurement roles in the future, with 54% of respondents believing Gen AI will improve efficiency and 36% saying it will free up time to focus on strategic objectives. A further 61% agree harnessing Gen AI will also be key to effective spend management. However, there are still lingering fears, with over a third (35%) of procurement leaders confessing they are concerned their role will be replaced by Gen AI.

“Gen AI represents huge productivity gains and resource unlock for procurement,” comments Vishal Patel, VP of Product and Customer Marketing at Ivalua. “But to succeed, careful change management and education are required to show employees Gen AI will enhance their role rather than replace it. With employees on board, businesses can focus on harnessing Gen AI to eliminate routine and time-consuming tasks while focusing on higher-value activities. But another key barrier remains – addressing a lack of progress on digitisation.”

Procurement is becoming the department that transformation forgot

Digital transformation in procurement has stalled in recent years. On average, organisations say they’ve digitalised 48% of procurement processes, compared to 45% in 2019. This lack of progress creates challenges for organisations looking to adopt Gen AI:

• Poor data quality: 22% of procurement leaders cited poor data quality as a challenge to adopting Gen AI in the procurement and supply chain function. 
• Lower technical skills among teams: More than a quarter (28%) of procurement leaders say user resistance is a top challenge to adopting Gen AI, which suggests a lack of digital skills or technical confidence will hinder progress.
• Lack of guardrails and processes: One-third (33%) of procurement leaders are concerned their team is using Gen AI tools without their knowledge, which is why nearly seven-in-ten (68%) agree they need to put more guardrails in place to ensure the accuracy of Gen AI outputs.

“Businesses need a solid data foundation for procurement and supply chain teams to effectively harness AI to improve efficiency and contribute to effective and timely decision making. But the lack of progress in digitisation and common data challenges suggest there is a significant gap to be bridged before Gen AI can deliver more strategic value. Most procurement leaders agree that if their organisation doesn’t embrace Gen AI in procurement, they will lose out on cost savings and broader value creation opportunities. So, businesses must act now to digitalise and close the technology and data gaps in their procurement function. If not, they will struggle to measure up against AI-powered competitors, potentially losing customers and market share,” concludes Vishal Patel. 

About the research

The survey was conducted by Sapio Research on behalf of Ivalua from the 29th April to the 10th May. It is based on a survey of 300 supply chain and procurement decision-makers in the UK.

About Ivalua

Ivalua is a leading provider of cloud-based, AI-powered Spend Management software. Our unified Source-to-Pay platform empowers businesses to effectively manage all categories of spend and all suppliers, increasing profitability, improving sustainability, lowering risk and boosting employee productivity. We are trusted by hundreds of the world’s most admired brands and recognized as a leader by Gartner and other analysts. Learn more at www.ivalua.com. Follow us on LinkedIn and X.