Thu Sep 26 14:12:04 UTC 2024: ## AI-Powered Procurement: Digital World Class Companies See Huge Productivity Gains and Cost Savings

**Miami, FL – September 26, 2024** – A new report from The Hackett Group reveals that procurement organizations using cutting-edge digital tools and embracing generative artificial intelligence (Gen AI) can achieve dramatic improvements in productivity and cost reduction.

The study, which surveyed global companies engaged in procurement transformation, found that **Digital World Class®** procurement organizations, those achieving top-decile performance in both business value and operational excellence, are projected to see a **54% boost in staff productivity** and a **47% reduction in process costs** by adopting Gen AI.

These companies, already known for their focus on optimization and strategic technology investment, are uniquely positioned to leverage Gen AI’s capabilities.

**Key Findings:**

* **Cost Efficiency:** Digital World Class® procurement organizations already operate at a 21% lower cost than their peers, and Gen AI is expected to further enhance their cost-efficiency.
* **Business Outcomes:** They achieve a 2.5 times higher return on investment compared to their peers, manage 21% more spend, and achieve double the spend cost reduction savings.
* **Streamlined Operations:** With 32% fewer staff across all processes and 56% fewer full-time equivalents (FTEs) in operations and compliance roles, these organizations have significantly streamlined their operations.
* **Faster Turnaround Times:** They experience 23% shorter sourcing cycle times, 76% lower process costs per order, and significantly higher electronic processing of requisitions, change orders, and purchase orders, resulting in quicker turnaround times and reduced manual intervention.
* **Strategic Investment:** Digital World Class® procurement organizations invest 15% of their operating budget in technology, a 32% higher investment than typical organizations, reflecting a significant commitment to digital transformation.
* **Enhanced Supplier Management:** They manage their supplier base more effectively, with 3.7 times fewer suppliers per $1 billion in spend, significantly reducing complexity and enhancing supply base control.

**Amy Hillcox**, senior research director at The Hackett Group, emphasized the transformative potential of Gen AI in the procurement landscape: “Generative AI is revolutionizing the procurement landscape by enabling unprecedented levels of automation and insight. Digital World Class® procurement organizations have laid a robust technological foundation, and our research indicates that embracing Gen AI will further enhance their cost-efficiency, staff allocation, and technological investment.”

**Chris Sawchuk**, principal at The Hackett Group, highlighted the comprehensive approach of these organizations: “Digital World Class® procurement organizations are not merely tech-savvy – they represent holistic excellence by integrating superior data management, strategic partnerships, and top-tier talent optimization. This comprehensive approach has allowed them to realize rapid and profound improvements across all metrics.”

The full report, titled **”Insights From Top Performers: How to Level Up With Gen AI,”** is available for free with registration at: [link to report].

The report provides valuable insights for procurement organizations looking to leverage Gen AI to achieve greater efficiency, cost savings, and strategic value.

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