More Than 60% of Companies Worldwide Don’t Have Policies On Gen AI Usage: Report

Despite the quick adoption of Generative Artificial Intelligence (Gen AI) across industries, nearly 60% of the companies operating in procurement lack specific policies on Gen AI usage, according to a new report.

This indicates that companies are still in the early stages of understanding and integrating AI into their procurement processes, it added.

A survey conducted by Zycus-Procurement Tactics highlighted the state of Gen AI in procurement and also showed that 69.8% of the respondents do not use Gen AI-based software in their procurement processes.

The “State of Generative AI in Procurement” report provided insights into how GenAI is transforming procurement processes, based on survey data from procurement leaders worldwide.

Key findings of the survey reveal that nearly 70% of the Chief Procurement Officers (CPOs) are yet to implement Gen AI in their procurement processes.

This reflects a huge governance challenge that companies are facing and underscores the urgent need for strategic guidance as the adoption accelerates, it added.

Outlining Gen AI’s transformative potential, the report detailed how GenAI is automating routine tasks and enhancing strategic decision-making across the entire procurement lifecycle.

Interestingly, the survey suggests that 50.6% of respondents utilise GenAI in contract management, with main use cases related to driving efficiency in administration.

31.5% of the respondents use GenAI to gather insights on creating the most effective negotiation strategies. Only 11.5% of respondents use GenAI to streamline communication with their suppliers, which corresponds to the personalization nature of supplier relationship management

Data quality and security emerge as top concerns among respondents, emphasising the need for responsible AI implementation strategies.

Organisations are encouraged to implement comprehensive risk management strategies, ensuring that advancements in GenAI technology are matched with equally advanced governance and security measures, the report added.

The potential of GenAI is immense, but the adoption gap is equally significant. Organisations that fast-track implementation should act soon to integrate GenAI responsibly will gain a substantial competitive edge.