In two years, technology is predicted to reach the peak of the procurement hype cycle.
Generative AI might be the most talked-about topic in supply chain in 2024. This is particularly true in procurement, where general artificial intelligence is being used more and more quickly.
In less than two years, widespread adoption and a variety of use cases will propel Gen AI into the “Plateau of Productivity,” predicts Gartner’s 2024 Hype Cycle for Procurement and Sourcing Solutions. “GenAI can already enhance many different workflows in procurement and 73% of procurement leaders at the start of the year expected to adopt the technology by the end 2024,” said Kaitlynn Sommers, senior director analyst with Gartner’s Supply Chain Practice. “This level of adoption, along with promising use cases, such as contract management, means GenAI will rapidly move through the Hype Cycle and reach the Plateau of Productivity at a faster rate than is typical for most emerging technologies in procurement.”
Clients use Gartner’s Hype Cycles to determine how interested they should be in a technology or solution. Five tiers are present: Spark of Innovation.
Usually in its early stages, this is centered around a promising technology that is generating interest.
Peak of Exaggerated Predictions.
At this point, there are a lot of failures as well as success stories. At this stage, businesses may choose to act on the technology or not.
A period of disillusion.
As trials and implementations fall short of expectations, enthusiasm begins to wane at this point. The technology-producing enterprises’ failures start with fewer survivors emerging.
The Enlightened Slope.
As technology advances and more case studies are published, next-generation goods hit the market.
Productivity plateau.
At this point, acceptance by the general public begins to pick up steam.
Use cases for Gen AI grow
According to Gartner, the number of Gen AI use cases has increased over the last 12 months as more vendors in the sourcing and procurement space have launched new capabilities. These include of supplier management, contract management, and sourcing. Support for P2P, analytics, and supplier performance management are among anticipated use cases.
“The window for building competitive advantage through early adoption of GenAI in procurement is narrowing,” said Sommers. “Despite this, procurement technology leaders should remain aware of the obstacles to successful implementations, notably in the areas of data quality and integration of GenAI with their current systems.” Sommers added that companies should look to launch “targeted use-case pilots” that can help clarify what capabilities are scalable. Also, monitor developments in the market and look for opportunities to leverage Gen AI without the need to build proprietary infrastructure.
Ultimately transformative
Gen AI appears to be getting off to a poor start overall. Despite the fact that many businesses have launched Gen AI efforts, according to EY data, just 7% of those businesses have finished deployment, and 62% of those businesses reevaluated their programs in the previous year. While this does not imply that Gen AI is not fulfilling its potential, it may indicate that businesses are still figuring out how best to use this game-changing technology.
In the EY poll, 38% of participants named data quality as their biggest obstacle, and another 33% mentioned data access as a barrier. That’s hardly unexpected, according to Matthew Burton, partner and EMEIA supply chain and operations leader at EY, as data is frequently compartmentalized across many systems and departments.
Additional insights on the Hype Cycle
While conversational AI, predictive analytics, and autonomous sourcing are among the AI-driven technologies that are moving close to reaching Gartner’s Peak of Inflated Expectations, Gen AI is receiving a lot of attention.
