Humans Wanted: Procurement’s Future in an AI World

Welcome to the Procurist Podcast. Today we're really diving into strategic planning for 2026, specifically looking at procurement. And, you know, right now it feels like CPOs are navigating this really narrow path. They've got intense, just relentless cost pressure on one side, and then this rapid, almost overwhelming force of AI integration pushing from the other.

That tension is exactly it. It's the core of what we're looking at today. Our mission really is pretty straightforward. We're synthesizing the key findings from 2 critical sources, the Strategic Planning Guide 2026 and the Procurement Salary Survey 2025. We want to give you, the listener, a fast track to being really well-informed on this, you know, rapidly evolving AI-enabled talent landscape so you can strategize effectively.

Okay, let's unpack that right away then. What is the absolute non-negotiable number one priority driving procurement strategy right now? What's the headline?

It's cost, full stop. I mean, the data isn't really ambiguous here. 55% of respondents to the strategic planning guide said cost reduction is their top deliverable.

55%?

Yes, 55%. That's, well, staggering. It's almost 4 times higher than the next priority they listed. So that's the clear mandate.

That's a huge external mandate then, find massive savings out there in the supply chain. But the sources also show they're facing internal pressures too, right?

Absolutely. Yeah, this isn't just about squeezing suppliers. CPOs are definitely feeling the heat internally to cut the costs of running the procurement function itself. More than 3 quarters of respondents indicated they were under pressure to cut functional operating costs.

Okay, let's just pause on that term, functional operating costs. For our listeners, what exactly does that cover?

Right, we mean the internal budget, so salaries, overheads, Software licenses, you know, the actual cost of running the procurement department.

To hide it.

So yeah, they're tasked with delivering these huge external savings while also proving they can be leaner, more efficient internally. It creates this fascinating, almost contradictory set of priorities.

How is that even possible? You've got this aggressive 55% focus on external savings, but you're also cutting your internal budget. What are the main levers, the strategic enabler CPOs are actually relying on to hit those targets?

Well, if we look at the data, specifically Table 1 from the guide, 2 key enablers really stand out as the solution to that exact contradiction. First is team and talent management, and second, following very closely, is digitalization.

Talent and technology.

Exactly. They're seen as the primary ways to meet this dual mandate. Now, there are other important ones, of course, business partnering, category management, data analytics, but the conversation really starts with people and tech. And digitalization, well, it's soaring up that priority list specifically because of the potential AI offers. We're talking about agentic AI tools here.

Agentic AI, another term we should probably define quickly. What does that mean in practice?

Think of it like AI that doesn't just, you know, process data or answer a question; it actually takes action. It's technology that can automate many tactical, transactional tasks pretty much on its own.

Like what kind of tasks?

Oh, executing low-value sourcing events, maybe responding to basic supplier queries, managing data quality checks, and that sort of thing. And this automation is key because it directly frees up your team's capacity for those really important high-value strategic initiatives, the ones that actually drive that 55% cost target.

Okay, this is where it gets really interesting for me because this isn't just theoretical future stuff, is it? Do we have hard evidence, like specific examples from the sources showing this AI productivity is already happening in procurement?

Yeah, we do. Yes. Definitive proof, actually. Take the case study involving Roche. They partnered up with a provider to co-create an AI-powered sourcing platform. They called it One Marketplace. And this wasn't just a pilot; it was operational almost right away.

Okay, so what did that look like? What was the scale? What were the results?

Well, within just 18 months, that single platform processed over 25,000 orders.

25,000?

Yeah, from about 1,600 users. And the payoff? It was huge. It delivered double-digit savings and it boosted productivity by streamlining things, improved the user experience, gave them better, faster data insights. So the tools work and they scale.

That really changes the conversation, doesn't it? It's not a small test program. This is core operations showing real tangible returns. So if it works this well, how fast are procurement functions actually moving to adopt this technology? Are they jumping on it?

They are moving fast. Procurement functions are already actively piloting and deploying these tools quite widely. Around 2/3 of the people surveyed think that somewhere between 11% and 30% of their core activities will likely be automated in the next 3 years.

Just 3 years?

Just 3 years. That's a fundamental shift in what the average procurement job actually looks like day to day.

So, to make that practical for listeners, where are leaders starting? Where are they implementing these AI solutions today?

Uh-huh. Figure 1 in the guide clearly identifies the top 4 areas. These are sort of the low-hanging fruit where the tools can have an immediate, measurable impact. They are: Spend analysis and reporting, contract management, market intelligence, and the sourcing process itself.

Okay, so if up to 30% of activities, especially those transactional ones, are being automated, let's shift to the people side. What's the expected impact on jobs? Are procurement professionals, you know, worried that their roles are becoming obsolete?

It's interesting, actually. They seem relatively confident, which was a fascinating finding in the salary survey. Approximately 3 quarters of the respondents feel their role is either highly unlikely— that was 29%— or somewhat unlikely, 45%, to be replaced by AI over the next few years.

That confidence level seems, well, quite high, doesn't it? Especially given the tech is clearly automating key tasks already. Is that confidence justified, do you think? Or is it maybe a bit of, you know, cognitive bias creeping in?

That's a really important question the sources make us ask. Because while the staff feel secure, the data suggests CPOs do expect their organizations to shrink, Just slightly, in 2026. The global average expected headcount change is actually negative, a meager 1.8%. It's subtle, but it's a measurable decrease.

And it's not even across the board, right? Table 2 shows that expected shrinkage is highest, down 2.6%, in those organizations managing between 70% and 90% of total spend. Those are likely the functions under the most intense pressure to prove their efficiency gains.

Exactly right. And this reduction, it's primarily expected to happen through attrition.

Attrition. So, not replacing staff who leave naturally.

Precisely. Letting the automation kind of fill the gap left by people moving on. But you see, this strategy brings up huge retention risks, especially with your high-potential people.

Right. If you're relying on attrition, you risk losing the very people you need to keep those highly ambitious strategic thinkers. What are the career ambitions driving these professionals? What does the data say?

Ambition levels are extremely high. Overall, 38% of procurement professionals told us that becoming a CPO is their ultimate career goal. But here's the crucial part. That ambition level just skyrockets once they reach the senior director level. 61% of those professionals aspire to that top CPO job.

61%.

61%. So think about it. If the organization is shrinking, even by just 1.8%, internal progression opportunities are naturally going to be more limited. This dynamic— really high ambition paired with potentially limited upward mobility inside the company— it highlights this acute risk of losing your best talent if their development paths and progression chances aren't crystal clear.

They'll just look elsewhere.

They absolutely will look externally to fulfill that 61% aspiration.

So that's the core strategic dilemma, isn't it? How do you possibly retain those future CPOs in a leaner structure? The answer has to be about the evolving role and the skills needed.

It absolutely does. The AI age transforms skill requirements in, well, 2 distinct ways. Yes, okay, we need some technical skills to actually leverage the new tools, but the focus shifts overwhelmingly towards those uniquely human soft skills. Skills like communication, collaboration, problem-solving. These become the greatest assets in a function that's pivoting towards strategic value, stakeholder management, and driving innovation.

So, if the machines are handling more of the transactional stuff, what are the most critical human skills identified for the future? What tops the list?

Table 3 in the guide is crystal clear on this. The top 3 skills rated most highly important for the future are collaboration at 90.4%.

90%.

Right behind it, communication at 89.8%, and then problem-solving at 82.3%. These are the high-value, uniquely human skills that are going to distinguish a top-tier procurement professional in, say, 2026.

OK, so that's what CPOs want to see. But here's the, frankly, kind of alarming part of the research you mentioned earlier. What's the gap? The gap between what professionals think their skill level is and what their leaders think.

Yeah, what's really fascinating here is just the sheer size of that disconnect. The data reveals this really dramatic gap between employee self-perception and the CPO's evaluation of current skills, particularly in those crucial soft skills we just talked about.

How big a gap are we talking? Can you give some specific numbers, like on communication?

Okay, take communication.

Yeah.

87.2% of employees rated themselves high in that area. Seems good, right?

Yeah.

Yet only 49.6% of CPOs rated their teams high on communication.

Wow, wait.

Yeah.

87 versus 49, that's nearly a 40-point difference on the skill they rated as most important.

Exactly, a massive perception gap.

Are employees just fundamentally misreading what's expected now, or are CPOs maybe setting an incredibly high bar for what high performance means in this new world? What does that gap really imply?

I think it implies a breakdown in really defining the new standard of value. If AI is automating the easier transactional communication, then high communication doesn't just mean writing a clear email anymore. It means complex stakeholder influence, managing executive expectations effectively, translating tricky business needs into coherent strategic sourcing plans. It's a higher bar.

Right.

And we see similar big gaps in problem solving, 82.2% self-reported high versus only 58.7% CPO rating. Adaptability, 78.9% self-reported high, but CPOs only rated 44.6% of their teams that highly.

So if nearly half the team isn't perceived by leadership as communicating effectively or being adaptable, and the remaining strategic work relies entirely on human interaction and collaboration, that huge skills gap seems like it could just grind strategic initiatives to a halt no matter how good the AI tools are.

Absolutely. I think addressing these major gaps in human skills is going to be the ultimate differentiator for CPOs. It's actually far more challenging than just deploying the technology itself.

Okay, so if we connect all these dots, the intense cost pressure, the AI deployment, the retention risk with top talent, and this really acute skills gap, the source material actually offers 5 clear action points for CPOs moving forward to help manage this, well, quite difficult transition.

It does. The guidance is quite prescriptive. Let's walk through them. Number one starts with communication itself. One, be honest. CPOs really need to be transparent with their teams about the functional plans. That includes being open about using attrition and what the implications are for people's roles. We heard a great little anecdote from one financial services CPO. He admitted that putting their future plans out there felt, quote, a little scary, but found that transparency was generally well received by the staff. It builds trust.

Transparency sounds essential, but given the internal budget pressure and that expected shrinkage, Isn't that just a polite way of telling people their workload's changing dramatically and maybe there's a hiring freeze? Sounds like difficult honesty.

It absolutely is difficult honesty, but it sets clear expectations, which leads directly into point number 2. 2, focus on value-adding activities. As automation handles more, CPOs must proactively ensure their staff pivot towards unlocking new sources of value. The forces specifically call out focusing efforts on things like sophisticated supplier relationship management and driving supplier-led innovation. Not just compliance checking.

Okay. And we've established that massive skills gap, especially in the soft skills needed for that value-add work. How do the sources suggest closing it?

That's point 3. 3, look at skills needs. You have to identify the skill gaps, both today's and tomorrow's, and we just saw how large those gaps can be. This really needs rigorous evaluation and critically making sure people managers buy into this and actually formulate proper development plans with their staff focusing on those human-centric skills.

Right. Makes sense. And the final 2 points seem to directly address that retention risk, especially among that ambitious 61% aiming for the CPO role.

Exactly. 4, invest in training and opportunities. Given that limited internal mobility we discussed, development programs become absolutely essential. The sources highlight using tools like rotational programs. These help high potentials grow into outstanding business leaders, not just excellent procurement professionals. That's key for retention and fulfilling that ambition.

Broadening their scope.

Precisely. And finally, number 5, build the business case. Despite all the budget pressures, CPOs need to continually engage and frankly excite internal stakeholders. So procurement is consistently seen as a strategic investment to maximize value from, rather than just being perceived as a cost center to manage down. That really shifts the entire perception of the function's role.

That really does bring it all together, doesn't it? The core tension for 2026 seems to be driving massive cost reduction while simultaneously successfully deploying AI, and that forces this fundamental talent pivot. Procurement has to move decisively away from the tactical work and focus intensely on developing those human soft skills like collaboration, communication, where our sources show these major perception gaps currently exist between staff and leadership.

So here's a final provocative thought for you to consider. Given that very high ambition we saw with 61% of senior directors aiming for the CPO role and the reality of that expected slight organizational shrinkage, How effectively is your organization investing right now in those rotational programs and those real development opportunities to retain that highly ambitious talent before they inevitably start looking externally for that next step?

A crucial question indeed. Thank you for joining us on the Procurus Podcast.