Procurement Leaders Predict Recession and AI Challenges, Not Job Replacement.
A headline asserting that “84% of Procurement Leaders Say Recession is already here” caught my eye this week.
It made for a nice change from the 24 hour rolling news coverage of the “Bromance Breakup” anyway 😉
To be fair, the detail read “84% of procurement leaders say a recession is already happening or will hit by the end of 2025” which has to be an “evens bet” given the current economic turbulence.
Marina Mayer wrote a fascinating article on this topic in Supply & Demand Chain Executive referring to the Fairmarkit study just released, “2025 AI in Procurement Index”.
There are four striking results reported from the study;
- Over 4 out of 5 procurement leaders predicting a recession this year.
- As cost pressures intensify and supply chains remain unpredictable, leaders are turning to AI to improve speed, precision, and visibility across sourcing decisions (but interestingly, NOT cost).
- 91% of organizations have an executive mandate to adopt AI, but 52% of leaders say their teams don’t fully understand how to exploit the tools effectively.
- One “red flag” here is that any executive mandate to use any technology tends to result in the use of that technology to address the wrong class of problem. The executive mandate may be better targetted at the priority business problems or opportunities to address!
- Only 1 in 20 procurement leaders predict reduction in jobs as a result of AI. 44% of procurement leaders expect their teams to grow with AI adoption.
- The most in-demand skills are reported as data interpretation (82%), strategic decision-making (75%), and cross-functional collaboration (69%).
- There is a fear of being outmanoeuvred by vendors using AI during negotiations. 94% of procurement leaders say their suppliers are already using AI in negotiations and 39% fear AI could lock them into unfavourable deals in fast-moving negotiations.
- A word of advice? Consider the data your AI tools are using and apply critical thinking to any information used for decision making. If you are using the generally available LLMs you may well be getting skewed data from an ocean of marketing material and AI generated content.
The Fairmarkit study itself refers to Gartner research that indicates that nearly 63% of organizations either do not have, or are unsure if they have, the right data management practices for AI.
Frankly, I would worry more about the 37% that think they are in good shape!
They must all be in the top 0.1% 😉
You can read Marina’s article in Supply & Demand Chain Executive here . . .
You can get direct access to the Fairmarkit “2025 AI in Procurement Index” Study here . . .
Procurement Leaders Predict Recession and AI Challenges, Not Job Replacement.
Thanks for reading . . .