By 2027, 50% of organizations will support supplier contract negotiations through the use of artificial intelligence (AI)-enabled contract risk analysis and editing tools, according to Gartner, Inc.
“Interest in AI for procurement has increased dramatically, and we expect to see a rise in use. In our survey, 58% of procurement leaders said they already are implementing, or plan to implement AI in the next 12 months,” says Kaitlynn Sommers, senior director analyst, Gartner Supply Chain Practice. “AI-enabled risk and editing solutions will help procurement expedite business decision making, decreasing time spent on the contracting process and increasing capacity for additional tasks.”
Key takeaways:
- Sourcing and contract life cycle management is expected to be the area where GenAI can be most impactful on businesses over the next 12 months.
- GenAI can help procurement teams take on more ownership in the supplier contract negotiation process by using automated editing tools that leverage legal department guidance and previously agreed-upon terms. GenAI can also add efficiency to the contract negotiation process by highlighting potential risks and offering risk reduction options.
“GenAI promises to empower procurement professionals to make informed, data-driven decisions that yield tangible results faster,” adds Sommers. “Our research reveals that procurement leadership anticipates a 21.7% increase in productivity from the use of GenAI in the next 12 to 18 months. Both procurement professionals and solutions providers should be taking action now or risk being at a disadvantage over the next three to five years.”
