When it comes to generative AI adoption, procurement departments are often touted among the fastest-moving functions in enterprise organisations. Research from Deloitte shows 45% of Chief Procurement Officers who have deployed AI are already seeing 2-5x return on investment—a benchmark that’s driving significant new investment in the space. According to procurement executives who hit the conference circuit in recent weeks, this is just the beginning as departments turn their focus to advanced analytics, contracting automation, and supplier intelligence while legacy system challenges persist.
Written by Stephan Donze, CEO of document management company, AODocs.
The Promise and Peril of AI in Procurement
When implemented with proper foundations, AI can transform how procurement officers work. Successful AI deployments help teams automatically evaluate supplier proposals by analysing pricing structures, delivery timelines, and compliance requirements across hundreds of submissions simultaneously. AI systems can detect hard-to-spot changes in supplier conditions—flagging when a vendor quietly adjusts payment terms or delivery clauses between contract versions. These systems excel at selecting the best offers by weighing multiple criteria simultaneously, from cost optimisation to risk assessment, and can automatically generate comprehensive RFPs based on historical successful procurements and current market conditions.
However, rushing to implement AI without solid document management foundations can accelerate costly mistakes rather than preventing them. Consider the procurement officer who makes a critical sourcing decision based on the wrong version of a supplier’s commercial conditions, resulting in budget overruns when the actual terms differ significantly from what the AI analysed. Or the team that overlooks an essential appendix in a complex proposal because their AI system couldn’t access or properly categorise supporting documents, leading to supplier selection based on incomplete information. Perhaps most concerning are scenarios where AI processing outdated contract versions allows unwanted automatic renewals to proceed, locking organisations into unfavourable terms they thought they had renegotiated.
When AI operates on the wrong documents—outdated versions, incomplete files, or improperly categorised information—it doesn’t just fail to deliver value, it actively amplifies the consequences of poor document governance. In procurement, where decisions involving millions of dollars hinge on contract details and supplier terms, ensuring AI works with accurate, complete, and current information becomes mission-critical.
A ‘document management problem’
Chaotic file systems are creating operational headaches for procurement teams of all sizes. Some departments are rushing ahead with AI deployment on existing SharePoint libraries, while others are taking a more cautious approach until they can establish proper document governance.
Procurement leaders are making it clear that regardless of which AI platform they choose, establishing unified document management comes first. Modern procurement teams process millions of documents daily—from supplier proposals and contracts to compliance certifications and performance reviews—and AI is only as good as the document management system behind it.
Organisations are investing heavily in consolidating information from legacy repositories while maintaining strict version control and audit trails. One insurance company reported reducing the staff needed to support legacy content management systems while dramatically improving response times for procurement teams seeking supplier information.
Managing AI expectations and rollout strategy
When procurement organisations first look at AI deployment, there’s often a desire to tackle everything at once—contract analysis, spend dashboards, supplier risk assessment. Most successful implementations have narrowed that scope, focusing on high-impact use cases first.
Deloitte data shows that 38% of procurement organisations have already piloted or deployed AI for spend dashboards, while 19% are using it for RFI/RFP/RFQ generation. Contract summaries and key terms extraction, help desk management, and intake management each capture 18% of current implementations.
Looking ahead, 57% of CPOs plan to explore AI for enabling functions in data and analytics, while 55% are targeting contracting applications. These represent procurement’s most ambitious AI applications yet but will require significant expectation management around timeline and complexity.
Executing on AI while keeping legacy systems functional
Current implementations show procurement departments generating significant value from AI, with returns coming roughly half from improved analytics and decision-making capabilities, while the remaining half involves productivity gains from automated document processing.
The integration challenge is substantial. Legacy ERP systems, contract management platforms, and supplier databases often use incompatible data formats and proprietary APIs that can take months or years to connect to modern AI platforms. Most procurement organisations deal with Oracle databases, legacy file shares, and various cloud repositories that don’t communicate with each other.
Many organisations are implementing intermediate document management layers that can connect to both legacy systems and modern AI platforms. These solutions provide the unified access that AI requires while maintaining connection to existing procurement systems.
The Document Management Foundation
Forward-thinking procurement leaders recognise that investing in unified document management creates the essential platform for true digital transformation. When properly implemented, this foundation delivers measurable returns—procurement professionals reclaim significant portions of their workweek as AI handles supplier research and document retrieval that once consumed hours daily.
The transformation sequence matters critically. First consolidate and govern documents, then leverage AI to extract maximum value. Companies that reverse this order and rush to AI deployment over chaotic document environments amplify existing problems rather than solving them.
Modern document management platforms offer features procurement departments need for AI readiness: version control and de-duplication, configurable archiving policies, advanced search capabilities, and security controls across supplier data. These systems serve as the essential bridge between legacy data accuracy and modern AI accessibility.