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Agentic artificial intelligence (AI) is being used in procurement to address persistent challenges, streamline workflows, and support data-driven decision-making. As organizations deal with increasingly complex global supply chains and compliance landscapes, AI technology has become a crucial tool for logistics professionals.
The Shift from Automation to Autonomy
While traditional automation can streamline tasks, agentic AI goes further by operating independently within defined guardrails. That means it can incorporate feedback loops and dynamic data analysis, which allows systems to modify their actions based on changing input and context.
Agentic AI solutions also require reliable, well-managed data, which provides the backbone for the technology. Simply put, with bad data comes bad outcomes.
“It’s important that your foundation is very strong,” says Sonali Bhavsar, the head of data and AI at AI procurement software provider GEP.
For example, Bhavsar explains, the system must be able to verify data sources and apply proper governance to ensure a rigorous supplier vetting process, even with fewer manual steps.
Implementing autonomy also introduces new oversight requirements, where organizations must clearly define the boundaries within the AI systems and continuously monitor outcomes to ensure compliance and fairness, especially when it comes to supplier diversity and regulatory requirements.
As organizations continue to use agentic AI for procurement, autonomy becomes less about replacing human judgment and more about creating a resilient, continuously improving decision framework. The goal isn’t instant, full autonomy, Bhavsar notes, but rather an incremental evolution where automated processes learn from exceptions, incorporate new data sources, and adjust course when needed.
A New Operating Model for Orchestration
The integration of agentic AI into procurement orchestration models has driven a shift from reactive, after-the-fact decision making to proactive, collaborative workflows. In practical terms, that means using AI to set entry and exit criteria in procurement workflows to help with project intake management, supplier selection and contract management.
“It’s an important piece of the puzzle,” says Bhavsar.
Ultimately, agentic orchestration supports the real-time exchange of information, allowing the system to suggest the best suppliers, monitor contract compliance, and flag areas where human review might be needed. These processes benefit from more consistent and repeatable outcomes, and at the same time, human operators remain involved in decision points where policy, ethics and financial impacts require oversight.
Proactive Risk Mitigation for Orchestration
One of the primary benefits agentic AI offers for procurement is real-time risk monitoring and early opportunity detection. Traditional systems typically rely on retrospective dashboard reporting, which can delay recognition of critical issues. But agentic AI is designed to analyze ongoing contract performance, market conditions and supply chain signals.
Proactive risk mitigation supported by agentic AI allows companies to identify issues like compliance breaches or supplier performance anomalies before they escalate. In a highly regulated industry, this allows for more targeted compliance strategies that address multiple regulatory environments simultaneously.
“If you come with proactive risk mitigation, you’re going to be in a much better space to really look forward,” Bhavsar says.
Real-World Use Cases in Procurement
The world of procurement is in the middle of a period of sizable disruption, says Bhavsar, where many chief procurement officers see this as a wholesale transformation of their finances and supply chains. And as agentic AI has provided firms with a crucial leg up, using the technology to its full potential has become a necessity.
“It is absolutely a must in today’s world,” Bhavsar says.
Today, organizations are using agentic AI to provide support for everything from supplier negotiations to contract compliance monitoring. Others use it to continuously evaluate contract fulfillment, ensuring that agreed-upon discounts or service-level obligations are being realized over time, rather than getting sporadically checked.
Other examples include procurement data integration, real-time supplier vetting across multiple regions, and using AI to make recommendations for financial initiatives. These processes enable procurement teams to identify cost-saving opportunities, all while achieving more transparency and control over spending.
What Leaders Need to Do Now
To fully realize the potential of agentic AI, procurement leaders first need to understand exactly what AI agents are capable of.
“Get familiar with agentic AI in your world,” Bhavsar says, and then work with chief AI officers, chief digital officers, and peer stakeholders to ensure that procurement data is well-managed and reliable.
Leaders must begin by building a thorough understanding of what AI agents can accomplish within their own specific business as well. This requires moving beyond the notion of agentic AI as merely a technical tool and recognizing its capacity to drive tangible improvements across sourcing, procurement and contracting processes.
Those who opt out of this risk losing cost savings, competitive ground, and the insights hidden within their own data, Bhavsar warns. And in the end, agility, responsiveness and proactive leadership will determine which organizations can get the most value out of the technology.
Resource Link: GEP | AI-Powered Procurement and Supply Chain Software, Strategy & Managed Services
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