My 2026 ProcureTech Market Predictions

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Last January, I made 5 predictions about where ProcureTech was heading in 2025.

Time to face the music, {{FIRST_NAME|readers}}.

Before I tell you my thoughts on what's coming in 2026, let's see how I did for 2025. Because predictions are worthless if you never go back and check them against reality.

(Spoiler: I got some things right. I got some things wrong. And one prediction might have been a year early...)

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Before getting into predicting the future, let’s see how I did with last year’s predictions. I’ve graded myself below. You can also refer back to my full 2025 ProcureTech predictions if interested.

Grade: B+

I predicted that a rise in global trade uncertainty would drive procurement organizations to adopt risk management practices and push their software providers to develop embedded risk management functionality in all parts of the value chain.

What actually happened: The need exploded. The adoption grew steadily.

The third-party risk management market grew at a healthy 18.5% CAGR. That's solid growth, but not an explosion. (Data Bridge Market Research) Security incidents originating from third parties continued their three-year climb. The 2025 Whistic Impact Report showed that 70% of organizations reported a data breach in the past three years, with 77% of those breaches originating from a vendor or other third party.

So the problem got worse. Organizations felt the pain. But the rush to adopt risk management technology was more of a steady jog than a sprint.

The nuance I missed: I conflated "increased awareness of risk" with "increased adoption of risk management tools." Turns out, knowing you have a problem and actually doing something about it are two very different things… “Let’s wait and see” is always a more popular approach than I imagine.

Grade: B

I said niche providers would keep proliferating. The market would keep growing with new companies dedicated to evermore specific use cases. I also said I didn't see massive consolidation coming. At least not in 2025.

What actually happened: Both statements were technically correct. But I may have underestimated the instability building beneath the surface.

How do I measure this? I use two independent "labors of love" as proxies for the market. Both are maintained by individuals who obsessively track this space:

These aren't analyst firm pay-to-play quadrants. They're comprehensive attempts to document what actually exists. And what they show is a market that's still incredibly fragmented.

But the Mega Map also tells a more sobering story: 54 companies are gone from the previous edition. More than 10 have been acquired or renamed, and could be discontinued at any time. James’ Procurement Software Finder tells a similar story.

And here's the thing: both James and Michael have mentioned there are many more solutions they didn't even get to cataloguing. That supports my hypothesis that there are actually more vendors around than last year, not fewer. Anecdotally, I came across a number of new startups from 2025 that weren't on my radar before. That also influenced my perception.

The nuance I missed: Proliferation and instability can coexist. The market kept fragmenting even as the foundations got shakier with higher turnover/churn. 2026 might be the year the chickens come home to roost.

Grade: A

This was my strongest prediction. I&O platforms continued gaining traction as both the "main procurement system" for net-new installations and the "bridge solution" for organizations stuck with underperforming S2P suites.

SAP Ariba's pivot (”replatforming”) announcement validated what I'd been saying. I covered this in my article “SAP Ariba Just Killed the Legacy Source-to-Pay Suite." The legacy S2P Suite players are feeling the warm breath of “Next Gen” procurement platforms on the nape of their neck.... And it’s a bit too intimate for comfort…

I also predicted we'd hear more about "Direct" I&O scenarios and that we'd see the first big I&O project failures. Both are materializing (more on this in my 2026 predictions).

Grade: A-

I said organizations would start caring less about whether a solution is "supported by AI" and more about clear ROI and business outcomes. Vendor messaging would shift from "leading with AI" to centering on business results.

What actually happened: This played out largely as expected. The conversation shifted from "AI will do everything and replace everyone!" to "what can AI actually do for us, and how do we measure it?"

Two studies from 2025 captured the reality check perfectly:

The viral MIT study ("The GenAI Divide: State of AI in Business 2025") found that 95% of enterprise GenAI pilots failed to deliver measurable P&L impact. Only 5% achieved rapid revenue acceleration. The core issue wasn't the technology. It was flawed enterprise integration. Generic tools excel for individuals but stall in enterprise settings because the workflows and integrations required for results are an order of magnitude more complex...

Meanwhile, the Stanford Digital Economy Lab and ADP Research released "Canaries in the Coal Mine," a study using payroll data from the largest payroll provider in the U.S. They found that early-career workers (ages 22-25) in AI-exposed occupations experienced a 13% relative decline in employment since widespread GenAI adoption. More experienced workers in the same occupations? Stable or growing. AI is already reshaping the labor market, but not the way the hype suggested.

You could see the correction in my own content throughout the year. Pieces like “The Dirty Little Secret Behind Gen AI Functionality Pricing" and “AI in Procurement: Why Most Teams Will Never Cross the Finish Line all tracked this reality check.

The hype didn't disappear, but it got tempered by experience. Organizations that rushed into AI projects started hitting walls. The survivors learned to ask harder questions before writing checks… The trough of disillusionment awaits…

Grade: C+

I predicted that organizations would realize they need specialized, AI-competent talent and start re-hiring after the initial AI-driven layoffs.

What actually happened: Partial validation. The pattern is more nuanced than I expected.

The layoffs were real. AI drove over 54,000 U.S. layoffs in 2025. Amazon cut 14,000, Salesforce cut 4,000+, Workday cut 1,750. IBM aimed to replace 30% of back-office roles with AI. Surveys found nearly 3 in 10 companies substituting jobs with AI by mid-year. (National CIO Review, CNBC, Tech.co, HR Dive)

Some rehiring happened, but selectively. Accenture cut 22,000 jobs early in 2025 but added 4,000+ AI, data, and tech roles later, with a focus on AI retraining. Google rehired ex-employees for 20% of its 2025 AI software engineer positions amid talent shortages. Visier reported rehiring rates rising to 5.3% for laid-off workers by year-end, as organizations realized AI still needed human support. (Insider PH, CNBC, HR Executive)

AI literacy demand is real. Employers ranked AI skills as the #1 requirement for 2025, with 81% prioritizing them during transformations. But only 23% of firms trained staff sufficiently, prompting hires of self-taught AI-proficient talent (particularly Gen Z). (Forbes, HR Executive)

The net impact: Rehiring lagged behind layoffs. AI productivity gains (Salesforce reported 30-50% automation) allowed companies to maintain lower headcounts. Specialized roles filled gaps, but overall staffing stayed below pre-layoff levels. (Durov's Code, HR Executive)

The nuance I missed: Companies are hiring for AI literacy. But they're hiring fewer people overall. The "re-hiring wave" I predicted is happening in pockets, not at scale. And procurement organizations are likely following the same pattern: upskilling selectively for AI adoption rather than rebuilding headcount.

The silver lining for you: Given there isn't much of a skilled labor market for AI-literate resources yet, nor are there generally recognized credentials, you can easily have an edge if you're self-taught. The 23% number above means most of your peers aren't getting this training from their employers either.

If you're investing in your own AI proficiency, you're already ahead. Now you just need to communicate that effectively.

So, in summary, here’s my 2025 scorecard:

Alright, let's see if I can do better this year…

Here are 5 predictions for where I think ProcureTech is heading in 2026:

2026 will be the year having “AI Agents" in your ProcureTech product becomes table stakes. Most will be rebranded workflow automation tools or chatbots sitting on top of user documentation.

But not all agents are created equal…

The real battle will be twofold:

1. Who genuinely delivers Agentic AI? Systems that can observe, decide, and act autonomously within guardrails on an end-to-end process. Not just "suggest" and wait for human approval. We've already seen this happen convincingly in the sourcing space in 2025. 2026 will tell us whether it spreads to other procurement sub-processes.

2. Who delivers the agent toolbox? Platforms that let users configure their own agents become exponentially stickier. Once a customer builds custom agents supporting processes outside the vendor's original scope, switching costs become prohibitive. This is the real prize for vendors IMHO.

Watch for: Vendors who can demonstrate the difference between "AI-assisted" and end-to-end "Agentic AI" execution. The ones who can't explain the distinction are probably just dressing up old automation tools in new clothes.

I called this last year, and 2026 is when the case studies go public.

I&O isn't a silver bullet. Companies that treated it like a “plug-and-play” solution, assuming the technology alone would solve their process problems, are going to hit walls. Expect cautionary tales from organizations that:

This will create a healthy market correction:

The upside? These failures will separate the serious buyers from the tire-kickers. And they'll force the industry to have more honest conversations about what it actually takes to succeed.

The line between Intake & Orchestration and Source-to-Pay Suite is becoming blurrier. It may disappear entirely in 2026.

S2P providers are (re)releasing intake functionality. I&O vendors are adding sourcing, contract management, and Supplier Relationship Management functionality. The category distinction that felt clear in 2024 will feel arbitrary by the end of 2026.

What this means: Buyers will stop asking "should I buy I&O or S2P?" and start asking "which platform has the best architecture to grow with us, in our context?"

The winners will be vendors built on focused, modern, API and partner friendly foundations, regardless of what category they started in. The losers will be the ones operating out of fear instead with an abundance mindset, carrying architectural debt from the 2010s, trying to bolt on capabilities that should be native.

Software vendors will start embedding engineers and implementation specialists directly into client operations; a “Customer Success Team” on steroids. They'll combine AI, talent, and their platform into bundled offerings.

Think of it as the Palantir "Forward Deployed Engineer" model but for procurement.

Palantir doesn't just sell software. They embed talented engineers directly with customers to solve problems on Palantir's stack. It feels like consulting in its proximity to the client, but scales like software in its product-led DNA. The model allows them to prove value faster and create adoption curves that competitors can't match.

In the ProcureTech context, it’s like providing the services of a senior Category Manager who comes armed with tools and data to drive outcomes in their category while working to create value and deploy the tools in other categories at the same time. They become the “go-to” person to solve procurement problems and solve them all with their tech stack.

It’s like a desirable Trojan horse 😅

I've called this "Service-with-a-Software" and it exploits a simple budget reality that every procurement leader knows:

There's always money for “temporary” staff augmentation. There's never budget for “permanent” technology.

By wrapping software inside a service contract, vendors bypass IT procurement almost entirely. For organizations burned by failed tech implementations (remember: 80%+ transformation project failure rate), this becomes an attractive alternative.

This model threatens both pure-play software vendors AND traditional staff augmentation firms. I think the vendors who figure it out first will have a significant go-to-market advantage in 2026 and beyond.

Procurement just needs to ensure they structure the deals in a way that ensures the Trojan horse never become undesirable 😅

As next-gen I&O platforms mature on indirect scenarios, they'll turn their attention to direct procurement. That's where the requirements are machine-generated (e.g. MRP, Maintenance Work Orders, Production Schedule, etc.) rather than human-generated.

Why this matters: Direct spend has been underserved by S2P suites for decades. The workflows are fundamentally different: high volume, tight integration with ERP/MRP systems, demand-driven rather than request-driven.

But it's not just about MRP integration. Direct procurement requires:

Expect: First-mover I&O vendors to announce "Direct Orchestration" capabilities. Manufacturers and MRO-heavy industries get a reason to invest in I&O that didn't exist before.

This is the next frontier. The vendors who crack it will open up an entirely new market segment.

Come January 2027, we'll revisit these and see how wrong I was this time.

How did I do on the 2025 grades? Am I off base on 2026? Did I miss something obvious?

Let me know in the comments 👇

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