Reduce, automate, improve: The impact of generative AI in procurement

Generative artificial intelligence, aka GenAI, has captured the attention of decision makers in every industry and line of business across the enterprise. And for good reason.

Generative AI tools are transforming how business gets done, thanks to their ability to rapidly ingest large data volumes, intelligently communicate in a variety of interfaces, and navigate complex scenarios. In fact, our 2025 Process Optimization Report reveals 99% of business leaders are already deploying AI in one form or another.

But what can generative AI do for procurement teams in particular?

Let’s explore specific procurement operations use cases for generative AI, and the critical benefits of using this transformative technology, as well as how procurement teams can get started.

Procurement’s journey towards artificial intelligence

Procurement professionals have long been digitizing in order to drive efficiencies and improve control over enterprise spending. While procurement strategy over the last few years has been characterized by the incremental use of automation, the next step is moving rapidly towards autonomous procurement operations.

This means the future of procurement could be autonomous from beginning to end, rather than automation just being used to reduce errors and improve cycle times in certain use cases here and there. Imagine a procurement system that autonomously identifies the best suppliers based on real-time market data, negotiates favorable terms using historical pricing and contract patterns, places orders based on demand forecasts, and continuously monitors deliveries for accuracy.

If discrepancies arise – perhaps incorrect quantities or late shipments – the system automatically resolves issues by communicating with suppliers and triggering corrective actions. All with minimal-to-no human intervention.

Why use artificial intelligence in procurement?

Every procurement team must be able to optimize supplier management, as well as contract, inventory, and risk management. By selecting the right commercial partners, negotiating favorable terms, and ensuring that the process of managing orders is as efficient as possible, procurement teams can strengthen financial performance while ensuring compliance and achieving key supply chain management KPIs.

An AI solution can help achieve all these goals by:

• Analyzing vast amounts of text and unstructured data – so procurement teams can investigate processes and suppliers both more rigorously and more rapidly. 

• Instantly producing a range of scenarios to consider – so negotiators and decision makers can assess a more comprehensive range of possible outcomes in less time. 

• Making intelligent recommendations – so leaders have access to better insights and the vast majority of orders can be processed without the need for manual intervention.

Gen AI procurement use cases

These fundamental capabilities are great news for key procurement operations including:

Risk evaluation

Generative AI can be used to analyze historical patterns of risk and fraud in both internal and external data. It can detect anomalies, draw actionable insights, and suggest remedial actions as part of an automated system for corporate governance. By rapidly inferring key issues and insights across all orders, contracts, and suppliers, it gives procurement leaders a more realistic path to transparency at every link in the supply chain and across finance processes, ensuring more effective compliance management. 

• Read more about how procurement is minimizing, mitigating, and sidestepping risk. 

Contract usage and monitoring

Generative AI can make the PR-PO (purchase requisition to purchase order) process easier and more efficient by automating tasks that usually take a lot of manual effort. It ensures the right contract terms are applied automatically, creates important documents when needed, and keeps track of how contracts are being followed by checking data from different systems. This helps streamline the entire process and makes it more accurate and consistent.

Simulated negotiation scenarios

When procurement teams need to assess how best to progress with a wide array of potential suppliers and deals, generative AI can help negotiators prepare for all possible outcomes. It can simulate a range of scenarios and outcomes that might reasonably occur based on previous negotiations. It can even suggest the most appropriate tactics for negotiators to consider. 

Supplier selection

Gen AI applications can provide a procurement function with detailed evaluations of each potential supplier, based on both structured and unstructured data. This data can include past supplier performance, as well their product or service profile, and customer behavior. 

Faster documentation and transactions

In the immediate term, generative AI can greatly accelerate a number of manual processes in procurement by automating the creation of standardized documents. These might be RFPs, charters, contracts, purchase orders, or invoices. By combining generative AI with automations like Action Flows, procurement teams can ensure the stipulations in these documents are appropriately enforced across different systems of record. 

Pricing analysis

Advanced procurement teams already rely on predictive modeling to identify pricing patterns and future price fluctuations based on supplier reliability and other macroeconomic factors. Generative AI can augment these models by analyzing a wider selection of inputs – including unstructured text from news media – while also offering a quick supply of intelligent recommendations based on recent, relevant changes. 

How Celonis can help make AI work for procurement

Successful AI implementation requires organizations to manage the potential risks of automation (like automating suboptimal processes), while ensuring AI has the right data to understand how their businesses run.

With the right data foundation and process insights, AI can make informed, relevant, and impactful decisions. Almost nine in ten (89%) business leaders say it’s crucial that AI has the context of how their business runs – including how KPIs are calculated, their policies and procedures, and how the organization is structured – if it is going to be deployed effectively.

Without process data or business context, companies struggle to make a meaningful impact with AI. To put it another way, there’s no enterprise AI without Celonis Process Intelligence.

How (and why) it works:After Celonis Process Intelligence (PI) creates a digital twin of a business’s end-to-end processes, it then uses AI algorithms to show teams where value opportunities lie and how to capture them.

At the same time, PI provides AI agents, co-pilots, and assistants with the contextual data they need to understand how processes run and interact, like KPI definitions or business rules (such as all invoices above $25,000 being required to go to the Finance Director for approval). All that means PI provides the relevant insights essential to automate processes with AI agents, effectively.

Together, AI and PI can drive everything from individual intelligent process automations, right through to autonomous procurement. With this accurate data and business context powering AI solutions, companies’ automations, predictive analytics, and process optimizations can generate a whole new level of competitive advantage for procurement.

And with Process Intelligence fueling AI, organizations are equipped to adopt a simple three-step approach to implementing generative AI in procurement:

1. Know your processes: Procurement teams first need end-to-end visibility of their processes as they actually operate. These valuable insights help AI determine where inefficiencies lie, which manual interventions add value, and where automations could help. 

2. Test your capabilities: Once there’s an accurate, real-time view of all processes, specific automations can be implemented – triggered and monitored by generative AI. By measuring impact against automation goals, artificial intelligence enables procurement teams to adjust and re-adjust their process optimizations and automations. 

3. Scale what works: Finally, with a reliable view of processes as a whole and the impact of automations, procurement teams can begin to scale their automations to cover more orders, suppliers, and organizations. 

Check out an on-demand demo about how Celonis Process Intelligence helps procurement teams make decisions with precision. Or talk to us to find out how best to plan your journey towards AI-powered autonomous procurement, so you can:

• Operate with an accurate view of every supplier’s true performance 

• Improve your first-time-right rate with automated price and contract changes

• Create powerful automations and rapidly combine them in your processes

Edward Baggaley

Content Marketing Lead

Edward writes about Celonis, its customers, partners, and product. He creates blogs - perhaps the one you’re reading - as well as ads, ebooks, keynotes, and advertorials. Newsweek, The Times, Time, and many B2B magazines have published his work.