Insight from industry-early lessons learned about AI adoption in core procurement processes, directions for managers and researchers

Abstract

Purpose

There is a growing body of conceptual work considering the potential of AI in supply chain and procurement, and there is great interest in AI among managers. But, according to a recent study, digital strategies for procurement are often missing or not satisfactory. Literature offers conflicting guidance on possible adoption areas for AI in core procurement processes. Given the need for better digital strategies for procurement and the need to further develop the understanding of adoption potential, the purpose of this paper is to explore actual adoption levels, experienced benefits, readiness levels and barriers to implementation in industry. This informs nuanced, not hyped, managerial consideration and identifies further research opportunities.

Design/methodology/approach

Leveraging items used in literature to study adoption of other technologies, the authors conduct the first empirical exploration of actual adoption levels of AI in procurement. The authors do so by collecting survey responses in three manager workshops, and the authors use the workshops to seek manager input in the interpretation of findings and the identification of implications for managers and researchers.

Findings

There appears to be less consideration given to AI in procurement than interest in the topic might imply. Adoption levels are generally low, implying that there is a lot of room for the development of consideration, use cases and possible pilots by managers and researchers. The authors find procurement benefits of AI adoption to be broader than costs and productivity alone, including visibility and innovation. But, readiness appears to be at relatively low levels with factors commonly considered in literature, such as executive support and willingness to invest, less relevant than less widely considered elements such as human sense making and supplier readiness.

Originality/value

This first empirical exploration moves past conceptualization and the study of potential adoption into the study of actual adoption levels in different procurement core processes. The authors expand the consideration of readiness by including additional items of human sense making as called for in literature. The authors also include and develop supplier readiness consideration, which is often missing from research. With the help of participating managers, the authors are able to develop a more comprehensive framework for the consideration of AI adoption. This can help bring nuance, not hype, to consideration and provides a rich portfolio of research items and constructs to further explore.