Procurement has traditionally been a highly manual, time-intensive process involving multiple steps, such as raising purchase requisitions, sourcing suppliers, managing Request for Quotes (RFQs), evaluating bids, negotiating terms, and creating purchase orders. At the same time, procurement teams are increasingly expected to deliver greater value with leaner resources and tighter timelines. The good news? The emergence of Generative AI in procurement is helping make that possible by streamlining workflows, accelerating decision-making, and enabling smarter, more strategic sourcing.
Generative AI (Gen AI) refers to large language models (LLMs) capable of producing original content that ranges from summaries and reports to analyses, emails, and even full scripts. These systems understand context, learn from data, and generate human-like text at scale. But what does this really mean for procurement?
In the procurement space, Gen AI is being applied to automate and accelerate content-heavy tasks that require significant manual effort. This includes drafting supplier contracts, creating supplier agreements, generating Request for Proposal (RFP) documents, and even summarising bids or evaluating supplier responses. By taking over routine documentation and enabling more intelligent content generation, Gen AI is helping procurement teams work faster, more efficiently
Let us look at some of the ways Gen AI is transforming procurement for the better:
contract creation and review: Drafting contracts and Non-Disclosure Agreements (NDAs) used to be a tedious and error-prone process. With the advent of Gen AI tools, contract drafts can be generated in a matter of seconds. By using natural language models trained on legal and commercial language, Gen AI can automatically generate the initial drafts of contracts, suggest appropriate clauses based on context, and flag areas of potential legal or commercial risk. Platforms like Icertis are leading this shift. They bring together contract lifecycle management and powerful generative AI, enhanced by agentic workflows, to offer smart, streamlined solutions for enterprise-scale contracts.
generation of RFPs and SOWs – Procurement professionals often invest significant time and duration in creating detailed documents such as Request for Proposals (RFPs), Statements of Work (SOWs), and other supporting documents. Gen AI streamlines this process and reduces manual effort, enabling a drastic reduction in time for the generation of such documents. This allows teams to focus more on what matters – strategic decision making rather than documentation.
enhanced contract compliance and risk management – Most procurement contracts are choc-a-bloc with complex compliance requirements, covering a wide range of areas such as delivery timelines, penalties, sustainability, and pricing terms. Gen AI scans through the language in these contracts and flags any kind of inconsistencies or deviations from approved templates. What’s more, it can even go through internal policies and external regulations to identify any possible red flags and reduce legal and reputational risk.
powering strategic spend analysis and forecasting – Procurement contracts are a rich source of data. The challenge lies in extracting insights from this data. Gen AI excels at this. It extracts insights from documents and enables procurement teams to understand supplier performance and spending patterns. It answers a lot of critical questions for procurement teams. Are we getting the best terms from similar suppliers? Are we exceeding our budget? Are there any opportunities to renegotiate contracts? For example, BMW, in association with BCG and AWS, developed “Offer Analyst," an LLM-powered tool tailored to enhance and automate the supplier offer evaluation process. Users upload RFPs and bids, and the AI extracts key details, compares offers based on customisable criteria, and delivers an easy-to-read dashboard.
supporting cross-functional collaboration – Procurement contracts often require insights from multiple departments. This includes the legal, finance, compliance and sustainability departments among others. Gen AI acts as a powerful bridge among various stakeholders by extracting and presenting information from contracts to each department as needed. For example, legal teams might receive clause-level risk assessments, while finance teams would be interested in payment terms and liabilities for a specific contract. Apart from this Gen AI also enables clear version control of contract-related documents by tracking who made which changes and when.
It is clear that the advent of Gen AI has created a true paradigm shift in the creation of procurement contracts. The Hackett Group reports that approximately two-thirds of procurement leaders anticipate a fundamental transformation in their team’s operations driven by this technology within five years. These advances are not just incremental. They are revolutionising procurement and are, no doubt, paving the way for smoother and more agile procurement operations.
how can Infosys BPM help?
Generative AI has become a strategic imperative for businesses aiming to stay competitive. Its ability to drive measurable gains in productivity and spark innovation is well established. Emerging advancements like AI agentic frameworks are now reshaping the landscape further, enabling organisations to automate complex workflows and accelerate decision-making like never before.
Infosys BPM’s AI and Gen AI capabilities, under the Infosys Topaz umbrella, empower enterprises with ready-to-deploy industry solutions, a robust partner ecosystem, and a foundation rooted in ethical and responsible AI practices.
