The Hype Over Generative AI in Procurement
Generative AI (GenAI) in procurement is currently experiencing a slowdown in enthusiasm. According to Gartner’s Hype Cycle for Procurement and Sourcing Solutions, 2025, the technology has entered what is called the “trough of disillusionment.” Many companies are facing challenges with integration, data quality, and managing high expectations.
This phase isn’t necessarily negative; it signals that the technology’s reality hasn’t matched its initial promise, even though some early adopters are already seeing improvements in efficiency and cost savings.
“GenAI is delivering process efficiency, better data insights, and cost savings,” said a senior analyst at Gartner. “But fragmented data and platform integration challenges are slowing progress.”
Despite these hurdles, GenAI is proving useful in procurement, especially for automating tasks such as supplier recommendations, contract management, and generating “Request For” documents. Organizations delaying adoption risk falling behind as competitors move forward with AI implementation.
Understanding the Hype Cycle and Current Position
Gartner’s Hype Cycle visually represents how new technologies evolve through five phases of maturity and adoption. GenAI isn’t alone in hitting the trough of disillusionment; other procurement technologies like sustainable procurement apps, prescriptive analytics, supplier diversity tools, and advanced contract analytics are also in this stage. Interestingly, conversational AI in procurement is projected to become obsolete before reaching full productivity.
The future remains promising for GenAI, but expectations need adjustment. Data fragmentation and integration difficulties pose significant challenges. However, GenAI’s potential across the source-to-pay process keeps interest and adoption strong.
Investment Trends and Strategic Advice
A recent report by Genpact and HFS Research revealed that 53% of supply chain and procurement executives are reallocating funds to support GenAI initiatives. Success hinges on solid data foundations and proactive change management.
Gartner recommends Chief Procurement Officers (CPOs) focus on:
- Investing in clean, integrated data systems
- Choosing vendors with embedded GenAI that align with business outcomes
- Prioritizing sourcing, supplier risk, and contract management areas
- Supporting organizational learning and digital upskilling
- Monitoring evolving AI regulations related to privacy and intellectual property
Gartner predicts GenAI will reach full productivity in procurement within five years. Companies tackling current challenges early will be best positioned for long-term benefits.
Gen AI Applications in Procurement
GenAI-enabled applications aim to automate repetitive, time-consuming tasks such as knowledge discovery, summarization, contextualization, workflow, and execution. This should boost productivity, reduce costs, and free staff to focus on higher-value activities.
Common use cases include:
- Text-to-process conversion
- Workflow automation
- Contract management
- Project scoping
- Supplier recommendations
- Auto-generation of “Request For” documents (RFx)
Challenges Slowing GenAI Adoption
Data fragmentation is a major barrier, but other concerns also impact adoption:
- Job security fears
- Skepticism about AI-driven insights
- Resistance to change
- High and unpredictable costs
- Complex integration with existing systems
- Emerging regulations on privacy and intellectual property
Organizations delaying GenAI integration risk falling behind as early adopters overcome these obstacles and realize tangible gains. The technology is expected to become fully productive in procurement within five years.
Companies ready to invest in data quality, integration, and change management now will have a competitive edge. For procurement leaders, this means focusing on practical implementation steps and preparing teams for digital transformation.
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