kpmg.com Open in urlscan Pro
2.17.22.11  Public Scan

Form analysis
3 forms found in the DOM

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POST /kpmg-us/content/experience-fragments/kpmg/us/en/site/sitewide-contact-us/master/_jcr_content/root/contactrfpmodal_copy.submit.json

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THE FUTURE OF PROCUREMENT: GEN AI’S IMPACT

Robust new AI can revolutionize procurement by automating most tasks, but some
challenges remain. Here’s how to get ahead of them.






Estimated read time: 4 minutes

Gen AI gets a lot of buzz for its potential to reimagine how businesses work, so
it can be hard to separate close-in opportunities from what-if aspirations.

But one area of the business where the attention is definitely warranted is
procurement. Indeed, we believe Gen AI will transform the procurement
function—quickly, unequivocally, and for the better.

The technology will reshape procurement’s operating model, automating tasks and
enhancing efficiency. It will also elevate the status of procurement within the
organization, as its accelerated transformation becomes a guiding light for
others to follow. This, in turn, will give procurement leaders (finally!) a seat
at the strategy and innovation table.

Many Gen AI use cases within large organizations are fraught with uncertainty
related to how to integrate the technology safely and responsibly. Within
procurement, leaders don’t see as many obstacles: A new KPMG survey of 400
procurement and outsourcing executives found that an astonishing 96 percent have
already made progress toward implementing Gen Al.

That said, challenges and risks still exist, including a quickly changing
regulatory landscape and the lack of skilled talent to develop, implement, and
scale Gen AI. That’s why it’s essential that leaders begin by building an
institutional framework that aligns with the organization’s risk tolerance,
cultural complexity, and investment appetite.

Here’s what procurement leaders need to know to prepare—and benefit from—the
quickly emerging Gen AI revolution.



96%

The percentage of procurement and outsourcing executives that have already made
progress toward implementing Gen Al, according to KPMG research.







PROCUREMENT’S MANDATE BROADENS

Why are procurement leaders so bullish on Gen AI?

For starters, KPMG simulations have found that the technology has the capacity
to automate 50 percent to 80 percent of current procurement work. This will
equip procurement organizations with more time and resources, enabling them to
negotiate more effectively (and with better insights), exert greater influence
on each transaction, and reduce costs. 

Gen AI will also enhance the management of supplier relationships, optimize
performance, and mitigate risks. Interactions will be guided, intuitive, and
streamlined, as Gen Al will be able to automatically populate much of the
information that users manually enter into systems today.

In addition, procurement will expand its reach into areas that it doesn’t
support today because of bandwidth, capability, or credibility. With Gen Al,
procurement will be positioned to deliver deep insights into category and
sourcing strategies, process improvement ideas, and supplier development plans.

Along with transforming itself, procurement will play a leading role in the
organization’s broader adoption of Gen Al, helping internal stakeholders manage
their AI implementations and realize efficiency gains as well. 

As a result, procurement—long thought of as a shared service—will earn greater
influence on decision-making, positioning it to lead all negotiations and
support a wider range of spend-related activities. In addition, Gen AI will
enable procurement to influence more of the organization’s requirements and
demands, develop deeper sourcing insights across a broader array of spend
categories, and help the organization arrive at better sourcing decisions.

Gen Al also enables procurement to foster innovation within the company’s
products and services, providing insights into supply market trends, technology
disruptions, and emerging value chain models. Additionally, it will expedite
sourcing and onboarding, facilitating the inclusion of new suppliers with
innovative capabilities.



50-80%

The amount of work within the procurement function AI has the capacity to
automate, according to KPMG simulations.







BUT FIRST, SOME ESSENTIAL STEPS

To successfully implement Gen AI within procurement—and fulfill on the promises
above—leaders must rise above the day-to-day and assess the strategic direction
of the overall organization. 

The implementation and application of Gen AI within procurement must map to a
larger institutional framework that considers the organization’s risk tolerance,
cultural complexity, and investment appetite for technology-led transformation.
Here are six initial steps to take:



ASSESS AI’S IMPACT:

Determine where Gen Al will add value, both within the procurement function and
enterprise-wise. Define specific use cases that the organization can explore
through proof-of-concept efforts.

START SMALL:

Once you’ve scoped a few use cases, build them. Then expand their scope as you
prove out the value. Scoring some quick wins will help build momentum within the
larger organization.

CONSIDER BUILD VERSUS BUY:

Some organizations require specific capabilities and are leveraging
off-the-shelf Gen Al solutions to accelerate their execution. The major downside
of buy is that multiple AI assistants can quickly lead to a fragmented user
experience.

DOUBLE-CHECK READINESS:

Many organizations will need to make foundational improvements in data quality,
completeness, and integration to effectively scale Gen Al solutions and realize
full value.

ASSUME A LEADERSHIP POSTURE:

Procurement executives often complain they lack a “seat at the table” and are
seen more as a compliance and transaction processing group than as a strategic
partner. This is your chance to change that.

ENSURE RESPONSIBLE AL:

A successful Gen Al implementation must proactively address risks and security
implications, including accuracy of outcomes, data protection and privacy, and
loss of intellectual property.



OVERCOMING OBSTACLES

There’s little doubt that Gen AI can transform the procurement function. But
getting from here to there will require companies-and procurement teams-to first
clear institutional and regulatory hurdles.

In our latest report, “How generative AI will transform procurement as we know
it,” we outline the challenges, present practical solutions, and reveal a
responsible AI framework that will help procurement leaders mitigate the threats
and make the most of the technology now and into the future.




UNLEASHING THE POWER OF GENERATIVE AI IN PROCUREMENT

Explore more in our full report, including practical solutions and responsible
AI framework.

Learn more



EXPLORE MORE INSIGHTS AND OPPORTUNITIES:


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2023 KPMG Generative AI Survey

An exclusive KPMG survey shows how top leaders are approaching Generative AI

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Supercharge your Finance workforce with GenAI

Knowledge workers in finance have significant opportunities to capture value and
reshape the workforce with the use of GenAI

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HR holds the keys to creating value from generative AI

Only workforce transformation can deliver the technology’s true operational
benefits

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MEET OUR TEAM






Contact Us
Len Prokopets
Advisory Managing Director, Procurement & Outsourcing Advisory, KPMG US
Read bio
Dipan Karumsi
Principal, US Consulting Sector Leader for Life Sciences, KPMG LLP
Read bio




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