The AI Procurement Paradox: A Missed Strategic Lifeline?

LONDON, UK – November 24, 2025 – While artificial intelligence continues to make revolutionary strides in clinical diagnostics and patient care, a critical operational function within healthcare and other industries is being left behind. New data reveals a startling disconnect: senior leadership is largely overlooking procurement for AI investment, despite its immense potential to fortify supply chains, manage costs, and drive strategic value. This oversight creates a significant risk, particularly for sectors like healthcare where a resilient supply chain is not just a business advantage, but a public health necessity.

A recent report from SAP Taulia, titled the 'AI in Procurement Report,' surveyed 600 senior decision-makers and found that globally, only 35% of leaders are prioritizing procurement and supply chain management for AI investment. This leaves the function trailing behind areas like finance (43%), data analytics (39%), and cybersecurity (38%). The finding is especially concerning given that 72% of procurement professionals report that the demands on their function have surged over the past year—a pressure acutely felt in healthcare systems still grappling with post-pandemic volatility.

A Widening Gap: Potential vs. Priority

The gap between leadership priority and on-the-ground reality is a chasm of missed opportunity. While executives may be focused elsewhere, procurement teams themselves have a clear vision of AI's potential. According to the report, 44% of these professionals believe AI will have a major impact on solving their most pressing challenges. They are not just facing more work; they are facing more complex work, from navigating geopolitical disruptions affecting medical device manufacturing to forecasting demand for new pharmaceuticals.

This is not about simply automating tasks; it's about building resilience. “Procurement sits at the heart of business resilience and supply chain security,” noted Danielle Weinblatt, Chief Product Officer at SAP Taulia. “AI presents a tremendous opportunity to elevate procurement’s strategic impact—transforming how organizations manage risk, relationships, and working capital.” For a hospital network, this translates to ensuring a steady supply of surgical gloves, sourcing life-saving drugs without interruption, and managing contracts with hundreds of vendors, from medical equipment suppliers to facilities management services. The failure to invest in intelligent tools to manage this complexity is a strategic failure.

Despite the low investment priority from the top, procurement teams are not waiting. The report shows that professionals are proactively using available tools, with 63% leveraging generative AI platforms like ChatGPT or Microsoft Copilot and 55% using specialized AI-powered procurement platforms such as those from SAP, Ivalua, or JAGGAER. This grassroots adoption signals a powerful demand from the front lines for better tools to do their jobs.

From Back-Office to Strategic Hub: AI's Transformative Power

The true promise of AI in procurement lies in its ability to elevate the function from a transactional, cost-focused back office to a strategic hub that informs enterprise-wide decisions. Early adopters are already reaping these benefits. An overwhelming 90% of procurement leaders currently using AI report that it allows their teams to focus on higher-value activities such as strategic relationship management with critical suppliers, nuanced risk oversight, and long-term value creation.

The applications are concrete and impactful. Experts in the SAP Taulia study identified AI's biggest potential gains in risk detection and mitigation (28%), data-led strategic decision-making (26%), and spend analysis (25%). By automating routine processes like invoice matching and payment scheduling (23%), AI frees up human expertise to tackle more complex challenges. This shift is vital. Instead of manually tracking purchase orders, a procurement specialist can analyze AI-driven forecasts to anticipate a shortage of a key component for a diagnostic machine, allowing the organization to secure an alternative source proactively.

This is a fundamental change in the nature of the work. “The findings in this report validate what we see every day: AI is a powerful catalyst, and we’re using it to elevate procurement from a back-office function to a strategic partner to the business,” commented John Roberts, Senior Director, North America Procurement at NTT DATA. He emphasized that automation is "not just about cutting costs; it's about unlocking our team's capacity to build resilient supply chains and use data for true risk detection.”

This sentiment is echoed by procurement leaders who see AI as an augmentation tool. “When we use AI to handle the routine, repetitive tasks, our teams are freed up to focus on strategy, the essential human skills, relationship-building, negotiation, and long-term value creation,” said Ashifa Jumani, Director of Procurement at TELUS. For healthcare, this means procurement teams can spend less time on paperwork and more time negotiating better terms for high-value imaging equipment or collaborating with suppliers to ensure ethical and sustainable sourcing practices.

The Barriers to Adoption: Why Leaders Are Hesitant

If the benefits are so clear, why the lag in investment? The hesitation from the C-suite stems from a complex mix of perception, practical hurdles, and cultural concerns. A primary barrier is simply a lack of awareness, with 35% of procurement professionals citing low understanding of AI’s benefits among senior leadership. This is compounded by a persistent, outdated view of procurement as a purely operational function; 30% of respondents believe their function is still not seen as strategic enough to warrant significant AI investment.

Practical concerns also loom large. Data security and compliance (36%) are the top worries for senior leadership, a particularly salient point in the healthcare industry where protecting patient data and adhering to regulations like HIPAA is non-negotiable. This is followed by a cluster of operational challenges: a lack of internal AI expertise, insufficient training for staff, and weak alignment with broader digital strategies (all at 33%). Furthermore, issues like workflow integration uncertainty (31%) and poor data quality (30%) present real-world obstacles. AI is only as good as the data it’s fed, and many organizations, including healthcare systems with siloed departmental data, struggle with the foundational data hygiene required for successful implementation.

Finally, there is the human element. The research highlights that leaders are concerned about AI's impact on their teams, fearing it could reduce the perceived value of procurement roles or push the function back toward a narrow focus on cost-cutting. This cultural resistance must be addressed by championing AI as a tool that empowers employees, not one that replaces them.

A Global Divide in AI Strategy

The reluctance to invest is not uniform across the globe, revealing an uneven adoption curve. The SAP Taulia report highlights stark regional disparities. In the UK, a mere 20% of leadership teams are prioritizing AI investment in procurement. This contrasts sharply with the more aggressive stances in Australia (44%), Singapore (41%), and the USA (37%).

These differences can be attributed to a variety of factors, including national digital maturity, regulatory environments, and the prevailing cultural perception of procurement's role. Regions with strong government support for digital transformation and a business culture that already views the supply chain as a strategic asset are naturally pulling ahead. For multinational healthcare organizations, this divergence is a critical consideration. An AI procurement strategy that works in a digitally advanced market like Singapore may face entirely different hurdles related to regulation and cultural mindset in Europe.

This global inconsistency underscores that the journey to AI-powered procurement is not just a technological one, but a strategic and cultural one. Organizations that fail to recognize this and continue to underinvest in their procurement functions are not just missing out on efficiency gains; they are willingly accepting a higher level of risk in an increasingly volatile world, a gamble that industries like healthcare can ill afford.