46% CPOs Plan To Utilize AI in Operations by End of 2024: Procurement Metrics Report

As we progress through 2024, procurement leaders face a rapidly evolving landscape marked by increased complexity and heightened expectations. Ardent Partners’ latest research highlights how chief procurement officers (CPOs) are tackling these challenges while leveraging new technologies and prioritizing critical initiatives.

Navigating Increased Challenges

In an environment where uncertainty is the only constant, 68% of CPOs anticipate that 2024 will be even more challenging than the previous year. Factors such as ongoing inflationary pressures and geopolitical instability are pushing procurement teams to optimize their strategies.

However, 65% of CPOs remain confident that their teams will deliver even more value in 2024, signaling a clear commitment to overcoming these challenges.

AI: Transformational Impact on Procurement

One of the most significant insights from the report is the rapid adoption of artificial intelligence (AI) in procurement.

Currently, 28% of CPOs are utilizing AI in their operations, with an additional 46% expected to do so by year-end.

AI is proving to be a force, enhancing procurement processes through:

• Increased automation
• Improved decision-making
• Enhanced user experiences

Notably, 61% of CPOs believe that AI will have a transformational or significant impact on procurement, underscoring its potential to drive competitive advantage.

ESG: A Growing Priority

Environmental, Social, and Governance (ESG) initiatives are gaining momentum as regulatory pressures and consumer expectations continue to rise. The report highlights that:

• 31% of CPOs have made ESG a top priority in 2024, up from 27% the previous year
• 64% of CPOs plan to expand their ESG programs

This trend reflects a growing commitment to sustainable and responsible procurement practices, aligning procurement with broader corporate values and stakeholder expectations.

Key Metrics for Success

To thrive in 2024, procurement teams must focus on critical metrics:

1. Cost Savings:

74% of CPOs are prioritizing cost savings—a 61% increase from 2023—as inflationary pressures persist.

2. Spend Under Management:

Best-in-class performers manage an impressive 91.3% of their spend, compared to an industry average of 66%.

3. Supplier Enablement:

While the industry average for electronically enabled suppliers remains at 45.8%, best-in-class teams are driving greater efficiency with 60.2% of their suppliers enabled.

Also Read: Steps to Bring Your Spend Under Management

The 2024 Procurement Metrics report makes it clear: procurement leaders who embrace AI, prioritize cost savings, and commit to ESG are well-positioned to drive value and resilience in a complex business environment. As the role of procurement continues to evolve, these metrics will be critical in shaping strategies that not only meet today's challenges but also build a sustainable future.

For a deeper dive into these trends and benchmarks, download the full Ardent Partners' 2024 Procurement Metrics report to optimize your strategy.