| Date |
|---|
| 16th May 2025 |
AI is no longer just a buzzword—it’s here and it’s reshaping how procurement teams work, make decisions, and create value. At this year’s LUPC SUPC Conference on 27 March 2025, some standout sessions focused on the future of AI in procurement. Here’s what we learned—and why it’s time to get serious about embracing change.
AI in procurement: Why now?
Whilst AI has been around for decades; it’s generative AI that’s transforming the landscape. Tools like ChatGPT have made it possible to create, summarise, and interpret content instantly, opening new doors for procurement. But it’s not just about flashy tools. Many companies have already been using AI behind the scenes: forecasting systems, spend analytics, and automated invoice processing have been doing the heavy lifting for years.
Breaking down the basics
To use AI effectively, a basic understanding goes a long way. Here’s a quick overview:
- Machine Learning (ML): Learns from data (e.g. fraud detection, healthcare diagnostics)
- Deep Learning: Makes complex decisions (e.g. autonomous driving)
- Generative AI: Creates new content (e.g. drafting emails, RFPs)
- Natural Language Processing (NLP): Understands and interprets text (e.g. contracts)
- Computer Vision: Recognises images and video (e.g. facial recognition)
- The newest frontier—generative AI—is where procurement is seeing the biggest shifts.
Three ways to use AI in procurement
Use (free tools – with caution)
Tools like ChatGPT are widely accessible—but come with risks. Free versions often rely on public data, so avoid sharing sensitive information unless you’re using an enterprise license.
Smart ways to apply free AI:
- Drafting RFPs or market summaries
- Supporting bid evaluations
- Running negotiation simulations
But always double-check outputs. Generative AI can make mistakes—or invent things.
Buy (embedded AI tools)
Procurement platforms like Symphony and Archlet already include AI-powered features. These tools:
- Automate spend analysis
- Streamline e-sourcing
- Flag risks in contracts via AI-driven redlining
This route is often safer, as the tools are pre-trained, secure, and aligned with industry standards.
Make (build in-house capabilities)
For organisations ready to invest, building your own AI solutions can offer a serious edge. One example shared: a company handling 120,000 requisitions a year used AI to clean and correct poor-quality data—freeing up buyers to focus on high-value work.
Key requirement? Strong data governance. Your AI is only as good as the data behind it.
Where AI adds value
Procurement teams are using AI to:
- Cut costs via smarter spend analytics
- Automate supplier selection
- Predict market shifts
- Monitor supplier performance in real time
- Manage contract lifecycles more efficiently
This isn’t about replacing people. It’s about clearing the admin fog so your team can focus on what really matters.
What to watch out for
AI isn’t perfect. It can:
- Hallucinate (generate false answers)
- Reflect biases in the data it’s trained on
- Be influenced by misinformation, even malicious actors
Always approach with a critical eye and remember, data quality is everything.
FAQs from the conference
Should suppliers declare if AI was used to write a bid?
Yes, as transparency helps manage expectations. But ultimately, it’s about whether the supplier can deliver—not how eloquent their proposal is.
Does it matter who writes the bid?
Sometimes. But AI could level the playing field – particularly for SMEs without bid-writing team.s
Will AI replace people in procurement?
No, but it will reshape roles, reduce repetitive tasks, and require new skills—especially in data interpretation and tech oversight.
Choosing your AI partner
Before jumping in with both feet, ask tough questions. Who’s building the tool? What do they stand for? Where is your data going?
Some early due diligence pointers:
- Are they familiar with or certified in ISO 42001 or BS ISO/IEC 42001:2023?
- Are they UK/EU registered and GDPR-compliant?
- Can they show their AI in action—case studies, references, sector experience?
- Are costs clear? What’s their risk management plan?
And beyond the tech:
- Will the AI model be documented?
- Who owns the IP?
- What’s their SLA post-deployment?
The best partner is one who’s transparent, compliant, and invested in your long-term success—not just the contract.
Before you buy: Operational considerations
Our Operations Manager, Lucie Kibbey, has written some helpful guidance on key operational considerations for members to take into account when considering purchasing any AI services.
Final thoughts
If you’re not already exploring AI in procurement, now’s the time. Whether you’re using, buying, or building AI, the goal is the same: to make smarter, faster, and more strategic decisions. The future isn’t coming—it’s already here!