Ironclad Report Finds Fragmented AI Procurement Use

Ironclad has released its second annual State of AI in Procurement Report, based on a survey of more than 800 direct and indirect procurement professionals. The AI contracting company found that 92% of respondents use AI, although no single use case outside contracting has reached 40% adoption. While 64% of procurement teams use general AI assistants, larger organizations and those with more developed AI policies are more likely to use procurement-specific tools. The report also found that 98% of AI users say the technology has improved how they work.

AI Use Remains Fragmented

Organizations are using AI across 14 use cases, including procurement data analysis, supplier discovery and evaluation, spend analysis and forecasting, and identifying cost-saving opportunities. Forty-one percent of AI users combine a general assistant with at least one procurement- or contract-specific tool, while 29% use specialized AI without a general assistant.

Specialized-tool users reported stronger results in several areas. Forty-eight percent reported better visibility across supplier relationships, compared with 37% of respondents without a specialized tool, while 47% reported better risk analysis, compared with 37%.

“Procurement teams have access to many AI tools, but these aren't connected to each other and are missing the context needed to actually understand what's in their contracts and their supplier relationships. The biggest opportunity for AI in procurement is moving beyond analyzing one document at a time to understanding the full contract lifecycle and knowing what's in their contracts and supplier agreements to navigate risk, uncover savings, and avoid value leakage.”

Contract Tools Face Reliability Concerns

Among contract-AI users, 45% use AI to extract and summarize terms, 41% use it to draft and review contracts, and 40% use it to assess contract risk and track expiration dates. Twenty-one percent said managing approvals, amendments, and extensions has been AI’s most impactful use so far, while 52% expect it to be among the biggest future benefits.

Nearly all contract-AI users, 98%, reported at least one problem with their tools. Security concerns were reported by 57%, accuracy issues by 45%, and a lack of vendor support or training by 42%.

Policies Support Strategic Work

Companies with 1,000 or more employees reported wider use of specialized AI tools than companies with 500 or fewer employees, at 84% and 60%, respectively. Seventy-three percent of larger companies reported more strategic work, compared with 59% of smaller companies.

Clearer AI guidelines were also linked with more strategic work. Sixty-seven percent of companies with extensive AI guidelines reported this result, compared with 58% of companies with basic guidelines.

Time Savings Are Not Universal

Sixty-three percent of AI users said they spend more time on strategic and complex work, but 33% said they spend more time reviewing and checking AI outputs than they save. Among VPs and above, 35% reported the sharpest workload increase, while 29% of VPs and managers said reviewing AI outputs takes more time than the tools save.

Ironclad will discuss the findings in a webinar on October 28 at 10 AM PT.