Why Data is Crucial to Procurement’s AI Future

Procurement has undergone a significant transformation to evolve into a strategic and integral part of business operations. As Lisa Harding, Global Vice President of Product Marketing for SAP Ariba’s strategic procurement portfolio commented in a recent webinar co-hosted by SAP, procurement practitioners have been overhauling processes to align with business goals, transforming relationships with internal partners and vendors, and implementing digital solutions to drive efficiency and cut costs.

This transformation has aligned with the increasing recognition of AI’s general capacity to streamline processes, enhance decision-making, and reduce costs. For the most effective results, it’s important to understand the importance of data for the development of AI in procurement.

In the roundtable, Harding strongly recommended that companies do their best to develop effective processes to ensure data accuracy, consistency and completeness. They also need to ensure data governance frameworks are in place to manage who can access  it.

Ensuring data accuracy, consistency, and completeness is critical, as unreliable data can undermine AI’s effectiveness. SAP Insiders working in procurement who establish governance frameworks to manage data are able to use AI to help provide actionable insights.. This focus on data will, according to Harding, ensure AI continues to drive meaningful innovation in the procurement space.

Looking ahead, the next phase of AI in procurement is expected by Harding to shift from experimentation to full-scale reinvention. AI is no longer a novel concept; it is becoming foundational. According to one CPO research report cited by the VP, nearly half of CPOs have already implemented AI in selected processes. Now, organizations must critically evaluate what has worked, identify gaps, and refine their approach to maximize efficiency and decision-making through data analytics.

SAP also believes AI applications will expand, including the adoption of copilots – intelligent systems that guide users conversationally through processes, forms, and workflows. Copilots such as SAP’s Joule are already simplifying tasks like approvals, report generation, and scheduling supplier meetings through their GenAI capabilities. AI also drives the newly announced SAP Ariba Intake Management solution, with which businesses can create an automated procurement request across multiple systems.

Harding explained that this year we will see more copilots integrate autonomous agents capable of executing complex, multi-step workflows without explicit instructions. These agents will leverage advanced capabilities like planning, self-reflection, and reasoning, while still allowing teams to maintain oversight and control.

The potential for multi-agent collaboration will further enhance these tools, enabling seamless workflows across multiple functions, including finance, supply chain, and procurement. 

“In the future, copilots are expected to learn from interactions with business systems and then optimize responses over time. It’ll be quite the evolution from the early chat bots,” as Harding commented.

What SAP Insiders need to know

Procurement is evolving from a traditional support function to a core strategic driver within businesses, with AI playing a pivotal role in this transformation. SAP end users in procurement must leverage digital solutions and data-driven strategies to optimize operations and remain competitive.

• AI’s Role in Procurement: AI is revolutionizing procurement by automating routine tasks, enhancing decision-making, and driving cost reductions. It allows procurement teams to streamline operations, improve supplier relationships, and better align with business goals.
• Importance of Data: For AI to be effective, accurate, and consistentdata is essential. Poor data quality can undermine AI’s potential, limiting its ability to generate valuable insights. Data Governance: Establishing a clear data governance framework is crucial. This includes defining who can access data and ensuring secure, consistent, and accurate data across functions. Cross-functional collaboration is key to turning raw data into actionable insights.
• AI Tools in Action: Copilots like SAP’s Joule help simplify tasks such as approvals, reporting, and supplier meetings, boosting productivity and efficiency.
• Looking to the Future: This year, expect to see autonomous agents handling more complex, multi-step workflows, reducing the need for human input. These AI agents will improve planning, reasoning, and decision-making while integrating seamlessly across procurement, finance, and supply chain functions.

To stay ahead, procurement teams should consider embracing AI and prioritizing data strategies for continuous improvement and innovation. Incorporating AI into procurement’s everyday processes will be a journey, as there are many considerations to ensure a fit for both the team as well as the organization.