AI adoption gap puts UK businesses at risk in procurement race

New research indicates that a widening gap in artificial intelligence adoption is putting many UK businesses at a growing competitive disadvantage within procurement and supplier management.

A study conducted by Ivalua, based on responses from 300 supply chain and procurement decision-makers, has found that only 32% of UK organisations have deployed AI tools in their procurement and supplier management functions in the past year.

As a result, 55% of businesses reported that their procurement and supplier management operations are now at a competitive disadvantage due to slow progress in adopting AI. The data suggests that organisations moving forward with AI implementation are already securing benefits compared to those lagging behind.

The findings highlight that organisations which have implemented agentic AI are achieving significant gains, with 85% experiencing improved data analysis for decision-making, 83% reporting improvements in task automation, and 79% noting sharper demand forecasting abilities.

The report, titled 'From Risk to Resilience: Supercharging Procurement with Agentic AI', explores how early adopters of agentic AI are distancing themselves from their competitors within the UK market. However, 36% of respondents are still in the process of introducing AI, and almost a third are either only considering adoption or have no plans to proceed at all.

This divergence is creating what the report refers to as an "AI gap"—the difference in capability and performance between those moving ahead with artificial intelligence and those remaining reliant on legacy processes.

"With rising costs, ongoing volatility in trade policies, and constant pressure to do more with less, slow adoption of AI isn't just a missed opportunity, it's becoming a strategic risk," Alex Saric, Smart Procurement Expert at Ivalua, said, commenting on the strategic implications of these findings.

"While early adopters use agentic AI to streamline sourcing, automate supplier management, and unlock real-time insights, slower-moving businesses are grappling with outdated processes, limited visibility, and mounting inefficiencies. The message is clear: the longer organisations wait, the wider the AI gap becomes. As market leaders use AI to cut costs, negotiate smarter, and build resilience, those standing still risk being left behind for good," Saric added.

The research also reveals that 73% of procurement leaders believe agentic AI will transform procurement and supply chain operations, yet many organisations face difficulties modernising their processes to keep pace with early adopters.

Despite these challenges, there are signs of increased investment in the coming year, with 74% of participants stating they intend to boost budgets for AI-powered procurement and supplier management tools over the next 12 months. This trend reflects growing recognition of the role AI could play in strengthening business resilience and competitiveness within supply chains.

However, the study identifies trust as a persistent challenge, with 52% of respondents saying they would not trust agentic AI to make critical decisions during a supply chain crisis.

"To get the most out of Agentic AI, procurement leaders must first lay a strong digital foundation – with consistent data, clear visibility across functions, and centralised policy enforcement. This foundation enables organisations to build better auditability and accountability into every stage of the Source-to-Pay process. The next step is driving adoption, optimising output quality, saying agile, and proactively managing compliance and security risks. With the right approach, procurement can go beyond automation – using Agentic AI to uncover deeper insights, react faster to risk, and deliver real strategic value," Saric said, commenting further on the requirements for effective AI deployment.

The report's methodology involved surveying decision-makers in early 2025, offering a snapshot of attitudes and progress toward AI adoption in procurement at a time when cost pressures and supply chain risk continue to be front of mind for UK businesses.