According to Gartner, the technological research and consulting company, progress in generative artificial intelligence (GenAI) is poised to impact the procurement function through advancements in three key areas.

Specifically, AI agents, agentic reasoning, and multimodality are the advancements that will redefine how procurement operates, significantly impacting the agendas of chief procurement officers (CPOs).

AI Agents

AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.

As AI agents become more integrated into procurement technology, they’re set to shift the role of procurement professionals towards strategic decision-making, stakeholder relationship management, and innovation.

Gartner’s research provided three recommendations as starting points for CPOs to maximise the value of GenAI in procurement:

• Double down on data governance: AI models require extensive training data, including data on procurement processes beyond basic performance metrics, to be effective. Ensure that real-world procurement data from internal and external sources is collected, scrutinised, and maintained in a structured format to ensure data quality, the firm advised. Plus, standardise and document decision making models for procurement value streams and invest in process mining to uncover and utilise procurement “dark data” for more comprehensive AI training.
• Develop and incorporate privacy standards into contracts: Gartner also suggests working with legal and compliance leaders to understand the AI data privacy risks and draft organisational protections; developing and cascading policies governing AI data rights to key suppliers; and incorporating data privacy standards as key criteria in supplier evaluations.
• Increase procurement thresholds: In the future, machine buyers are to become common, absorbing a significant portion of traditional sourcing and procurement activities. Procurement teams will become smaller and be deployed to manage only the most strategic sourcing activities, manage exceptions and edge cases, or advise business stakeholders (or AI bots) on how to do their own buying, the research firm said.

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Agentic Reasoning

Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability is set to enable procurement functions to leverage GenAI to analyse complex scenarios and make informed decisions with greater speed and accuracy.

Multimodality

Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement’s ability to gather and analyse diverse information sources, leading to more comprehensive insights and better-informed strategies, noted Gartner.

Commenting further on these three advancements, Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said: “Agentic reasoning, multimodality, and AI agents are coming to procurement. These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly.

“Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology.”