How AI is reshaping procurement in Australia from strategy to interoperability

In procurement, being a strategic partner for the business is no longer optional – it is the baseline. Today, C-suites in Australia and beyond have placed much higher demands on their procurement functions to become more operationally resilient and predictive amid global supply chain volatility.

Our research conducted by SAP Taulia shows that over two thirds (68%) of procurement leaders in Australia say their challenges have increased in the last year. This compares to 74% in the UK, 66% in Germany, 68% in Singapore and 72% globally.

What are driving these challenges?

• Mounting stakeholder pressures, as outlined above
• Ongoing supply chain disruptions
• The expectation to produce more value with fewer resources

However, before we discuss in more detail, it’s important to emphasise that not everyone is experiencing these challenges. Australia was one of the countries reporting the highest proportion of decreases in procurement challenges (15%) of respondents. This data hints that procurement leaders here may be adapting or responding slightly more positively to AI than other world regions.

How is AI reshaping procurement in Australia?

Our research shows that half (50%) of procurement professionals in Australia use AI in their roles, while only 10% admit to not using these tools.

48% of respondents who use AI-powered procurement tools apply them to develop procurement strategies and business cases. GenAI tools in particular are more often used for spend analysis and categorization (44% of respondents using these tools).

Most respondents agree that AI will impact their roles and departments

About 80% of procurement leaders in Australia say AI will have a major or moderate impact on their function.

However, this technology is advancing faster than many of these organizations can keep up – and there are some concerns about the long-term implications of AI as more procurement teams adopt and scale it. Our research has revealed that many procurement leaders worry that AI may reverse its evolution into a strategic, resilient partner.

39% of our Australia-based respondents also believed that AI will make it harder for procurement to demonstrate value to stakeholders. Just over a third (35%) felt AI will lead to too much emphasis on cost savings rather than strategic value, similar to our global findings.

But one expert believes the opposite is true

Gordon Donovan, Global Vice President of Research for Procurement & External Workforce at SAP, in Melbourne, Australia, believes AI is the best opportunity for procurement teams to make their final move to become more resilient, commercially integrated partners.

He explains that as procurement leaders grapple with higher demands and unpredictable supply chains, it’s more important than ever to break down the deep silos that are still holding them back.

How AI can prevent late payments and support business continuity

AI has the potential to support the integration of procurement with finance and supply chains. Donovan highlights late payments as a prime example of this.

“Paying late is one of the fastest ways to damage supplier relationships,” Donovan says.

“Procurement often confirms they’ve approved a payment but the accounts payable team may not have paid it. AI can finally help share this data across teams so everyone understands what the consequences are,” he added.

In Australia, supply chains are particularly vulnerable to global shocks, due to its high reliance on exports and imported manufactured goods.

This can intensify the pressure on those supplier relationships due to the increased likelihood of disruption during these events. That’s why it’s important for procurement teams to improve their day-to-day operational performance and build stronger relationships with suppliers, minimize cash flow risk, and support long-term business continuity, even during shocks.

Australia’s potential supply chain vulnerability could be a reason why respondents here were significantly more likely to cite procurement and supply chain management as their leadership teams’ top priority for AI investment and growth. In comparison, just 20% of respondents in the UK and 36% in France gave this response.

AI can help by:

• Detecting risks such as delayed payment runs
• Automating invoice-matching processes to accelerate payment times
• Providing real-time updates of supplier performance
• Sharing intelligence between procurement, accounts payable, and the rest of the supply chain

Focusing on strategy and resilience

Automating more operations can help procurement teams spend more time on refining strategies and becoming more resilient.

Recent events such as the US tariffs and geopolitical tensions have upended global supply chains and created much more uncertainty for procurement.

Ultimately, AI gives procurement leaders the predictability and stability they need to operate with confidence and certainty, even if the macroeconomic environment remains highly unstable and uncertain.

The future of AI in procurement

Currently, just over a third (35%) of procurement leaders in Australia believe AI will drive strategic value, such as value creation, innovation, and resilience, in the years ahead.

However, through the automation of routine- and data-intensive tasks, procurement teams are better equipped to identify and mitigate risks, allowing them to respond quickly to supply chain disruption.

As Gordon Donovan says: “AI-driven automation frees up time and resources across procurement, allowing teams to focus on the bigger challenges and build real resilience into supply chains. So, the question is, what are you going to do with that extra time?”