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Agentic reasoning, multimodality and AI agents will transform the role

The advancement of Generative Artificial Intelligence (GenAI) is poised to impact the procurement function through advances in three areas, according to the Gartner, Inc.. Agentic reasoning, multimodality and AI agents are the advances that will redefine the purchasing operation and significantly impact the agendas of CPOs (Chief Procurement Officers).

“Agentic reasoning, multimodality and AI agents are coming to shopping. These advances will take shopping into an era where the gap between ideas, insights and actions will rapidly shrink,” says Ryan Polk, Senior Director Analyst at Gartner. “Procurement leaders who build their foundation now, with a focus on data quality, privacy and risk management, have the potential to achieve new levels of productivity and strategic value with technology.”

According to a July 2024 Gartner survey of 258 global respondents, 72% of procurement leaders are prioritizing the integration of GenAI into their strategies. This highlights recognition of its potential to drive significant improvements in efficiency and effectiveness, as well as several viable use cases, including improving the procurement process contract management.

The three advancements in GenAI that will impact purchasing include:

Agentic Reasoning: Agentic reasoning in GenAI enables advanced decision-making processes that mimic human cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.

Multimodality: Multimodality refers to GenAI’s ability to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance the ability of buyers to gather and analyze multiple sources of information, leading to deeper insights and better-informed strategies.

Artificial Intelligence Agents: Artificial Intelligence (AI) agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving, and exceptional cases. As AI agents become more integrated into procurement technology, they will shift the role of procurement professionals to strategic decision-making, stakeholder relationship management, and innovation.

Gartner research provides three initial recommendations for CPOs to maximize the value of GenAI in procurement:

– Strengthen data governance: AI models require large volumes of data to train, including data on procurement processes beyond basic performance metrics, to be effective. Ensure that real procurement data from internal and external sources is collected, analyzed, and maintained in a structured format to ensure quality. Standardize and document decision-making models for procurement value streams, and invest in process mining to uncover and utilize “dark data” from procurement for more comprehensive AI training.

– Develop and incorporate privacy standards into contracts: Work with compliance and legal leaders to understand AI data privacy risks and design organizational safeguards. Develop and implement AI data rights policies with key vendors. Incorporate data privacy standards as key criteria in vendor evaluation.

– Increase purchase limits: In the future, automated buyers (machine buyers) will become commonplace, taking over a significant portion of traditional sourcing and purchasing activities. Procurement teams will become smaller and will be deployed only to manage the most strategic sourcing activities, manage exceptions and outliers, or guide business stakeholders (or AI bots) on how to make their own purchases.

Gartner clients can read more at: How Generative AI Progress Will Shape the Future of Procurement. Non-customers can learn more in the next webinar: An Introduction to Generative AI for Procurement.

About Gartner for Supply Chain Practice  

The Gartner Supply Chain Practice provides actionable, objective insights for supply chain leaders and their teams so they can respond to disruption and innovate for the future through leading-edge supply chain management practices. Additional information is available at https://www.gartner.com/en/supply-chain.

About Gartner 

Gartner, Inc.. provides objective, actionable insights that drive smarter decisions and better performance for enterprises’ mission-critical priorities. To learn more, visit www.gartner.com or follow Gartner news and updates for IT executives using #GartnerIT.

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