Hi {{FIRST_NAME|readers}},
AI for Procurement got a reality check last month:
Gartner moved GenAI into the "trough of disillusionment" in their Procurement Hype Cycle…
MIT found that 95% of enterprise AI pilots are failing.
Pentair achieved 90% accuracy in spend classification and $15 million working capital improvement. Their secret? They started with a boring invoice extraction use case, not a grand “Gen AI” based strategic transformation.
The gap between AI hype and reality is wider than most pundits want to admit…
(After all there’s more than $364 billion dollars being spent on the AI infrastructure build out by Amazon, Alphabet, Microsoft and Meta alone… Is AI is becoming “too big to fail”…?)
But that's actually good news. Because now we can focus on what actually works…
That’s what I focused on demonstrating with this month’s Top 5.
Spoiler? The procurement teams building incremental AI supported capabilities and wins are quietly pulling ahead.
Onwards!
How the Monthly Top 5 Works…
Every month, I comb through 1000+ articles across 40+ sources to bring you the best free procurement articles on the web.
My picks are based on what I feel is the most concrete, actionable and useful content I came across that month.
I sort through the noise so you don’t have to.
📰 In this month’s edition:
No. 1 - Early AI Adopters Are Building 2-5 Year Advantages Right Now
No. 2 - Industry Now Controls 96% of Cutting-Edge AI Research
No. 3 - Manual Task Automation Beat Strategic AI Projects in ROI
No. 4 - A Primer on Cost Modeling
No. 5 - The $800 Change Disrupting Global Supply Chains
Let’s dive in!
Note: Some of the content above is only available in the email version of this newsletter. Don’t miss out! Sign up for free to get the next edition.
No. 1 🥇
Early AI Adopters Are Building 2-5 Year Advantages Right Now
Gartner just moved GenAI for Procurement into the "trough of disillusionment" on their Hype Cycle for Procurement and Sourcing Solutions 2025, citing fragmented data and integration nightmares. No surprise there… I’ve been waiting for this since February.
However, organizations that delay experimentation with Gen AI risk falling behind early adopters who are working through these challenges now. The “trough” doesn’t mean Gen AI is dead… It's actually where the real work begins.
The Bottom Line: The companies investing in AI foundations today (clean data, integrated systems, and realistic use cases) are building advantages that will compound over the next 2-5 years. The disillusionment phase is when smart money doubles down.
Action Item: Figure out which AI subdomain is best suited to help optimize your biggest pain points. Experiment. Success with technology comes from incremental wins that stack up.
Gen AI in procurement: From hype to hard truths
by Brian Straight at Supply Chain Management Review
👀 In Case You Missed It…
My Best Linkedin post of the month:
Procurement has changed. And if you're learning procurement from textbooks and whitepapers... You're already 5 years behind.
No. 2 🥈
Industry Now Controls 96% of Cutting-Edge AI Research While Academia Gets Priced Out
MIT research reveals that industry models are 29 times larger on average than those in academia and the largest AI models developed in any given year now come from industry 96% of the time.
Meanwhile, roughly 70% of individuals with a PhD in artificial intelligence get jobs in private industry today, compared with 20% two decades ago. This is fundamentally changing what AI research gets funded and who controls the technology that shapes business operations.
The Bottom Line: While industry-led AI delivers powerful tools, it also means fewer resources for research into AI bias, public health applications, or solutions that aren't immediately profitable.
Action Item: When looking at AI-supported solutions to solve business problems, consider the underlying commercial motivations at play… Not just with your immediate vendor but up the “AI value chain”… Are you buying a product or are you the product?
Study: Industry Now Dominates AI Research
by Brian Eastwood at MIT Sloan
👀 In Case You Missed It…
I recently released a free ebook on how to build business cases for Intake and Orchestration projects. Grab it here.
No. 3 🥉
Manual Task Automation Beat Strategic AI Projects in ROI
Finally, a reality-based look at AI in procurement with actual ROI numbers. The most successful implementations started with manual, repetitive tasks, not grand strategic transformations. Pentair achieved 90% accuracy in spend classification and $15 million working capital improvement focusing on boring processes like invoice extraction.
The Bottom Line: Companies winning with AI treat it like any other process improvement: starting small, measuring everything, and scaling what works. The most valuable AI applications are rarely the sexiest ones.
Action Item: Read over the use cases. If you’ve got similar pain points, try to find someone in procurement from the company on LinkedIn. Reach out. Start a conversation. Learn from their experiment.
10 AI Procurement Use Cases & Case Studies
by Cem Dilmegani at AI Multiple Research
👀 In Case You Missed It…
I was recently a guest on the Art of Procurement podcast:
Listen to Ep. 747 - Continuous Improvement as the Cure for Transformation Fatigue
No. 4 🏅
A Primer on Cost Modeling
This LinkedIn post from Simon Frost is a master class in a fundamental procurement skill: Cost Modeling. As Simon says (sorry, couldn’t help myself 😅): "Cost Modeling is a core procurement technique. Unbelievably, few companies train it."
The Bottom Line: Companies investing in fundamental analytical capabilities like “should-cost” modeling will deliver immediate savings. Competitive advantages are often hiding in plain sight…
Action Item: Audit your team's cost modeling capabilities. Can they build a proper should-cost model from the ground up according to Simon’s post? If not, push for mastery the fundamentals before you chase the frontier.
Cost Modeling is a Core Procurement Technique
by Simon Frost
👀 In Case You Missed It…
The Last 3 Sunday Night Notes:
1/ AI Automation Impacts Viewed Through US Payroll Data
2/ How to Fix Your Procurement Spend Funnel
3/ Reports of Consulting's Death Have Been Greatly Exaggerated...
No. 5 🎖
The $800 Change Disrupting Global Supply Chains
Starting August 29, 2025, the U.S. eliminated the $800 “de minimis” threshold that allowed low-value shipments to enter the country duty-free.
This forced EVERY international shipment entering the US to require full customs clearance. Companies that were routing small packages through the US under the threshold to avoid duties now face massive compliance costs and delays. This isn't just about shipping costs, it's fundamentally changing how global supply chains operate, from inventory positioning to supplier relationships. The regulatory shift will separate agile procurement teams from reactive ones.
The Bottom Line: This isn't just a logistics headache… It's directly relevant to every procurement team supporting global operations. Companies that quickly adapted their international sourcing strategies, consolidated shipments, and renegotiated supplier terms are maintaining competitive advantages while others absorb unexpected cost increases.
Action Item: If you're sourcing internationally, review your strategy immediately and consider relocating inventory closer to end markets. Regulatory agility is becoming a core procurement competency. Build monitoring systems for trade policy changes that could impact your supply chains before they blindside your operations.
The End Of The US $800 De Minimis Rule And What It Means For International Ecommerce
by Hannah Storrs at FlavorCloud
What was your favorite story this month? Why?
🌯 That’s a Wrap…
Otherwise, here are 2 other ways I can help:
Need Help Building Your Digital Procurement Roadmap?
I’ve been helping global procurement teams digitalize their processes and practices for 12+ years. Reply to this email to get a conversation started.You have something to share with our 10,000+ readers?
The digitally-minded procurement professionals reading this newsletter are thirsty for knowledge, insights, and solutions. Reply to this email to get in front of them.
Till next time,
P.S. Please rate today’s newsletter.
Your feedback shapes the content of this newsletter.
How did you like today's newsletter?
Forwarded this newsletter? Sign up here.