Gen AI on Gartner’s Hype Cycle fast track to mainstream adoption

There may be no hotter topic in supply chain in 2024 than Generative AI. That is especially true in procurement, which is seeing growing interest and rapid deployment of Gen AI.

According to Gartner’s ’s 2024 Hype Cycle for Procurement and Sourcing Solutions, rapid adoption and multiple use cases will move Gen AI into the “Plateau of Productivity” within two years.

“GenAI can already enhance many different workflows in procurement and 73% of procurement leaders at the start of the year expected to adopt the technology by the end 2024,” said Kaitlynn Sommers, senior director analyst with Gartner’s Supply Chain Practice. “This level of adoption, along with promising use cases, such as contract management, means GenAI will rapidly move through the Hype Cycle and reach the Plateau of Productivity at a faster rate than is typical for most emerging technologies in procurement.”

Gartner’s Hype Cycles are used by clients to identify what level of interest they should have in a technology or solution. There are five levels:

1. Innovation Trigger. This is typically early stage with a focus on a potential technology that is drawing interest.
2. Peak of Inflated Expectations. This is the stage where some success stories emerge, but many failures also take place. Companies may or may not take actions on the technology at this point.
3. Trough of Disillusionment. In this stage, interest wanes as experiments and implementations fail to deliver. Failures of companies producing the technology begin with fewer survivors emerging.
4. Slope of Enlightenment. More case studies emerge and the technology becomes more understood, with next-generation products arriving on the market.
5. Plateau of Productivity. This is the stage where mainstream adoption starts to take off.

Gen AI use cases expand

The past 12 months have seen the number of Gen AI use cases expand, with additional capabilities being added by vendors across the sourcing and procurement landscape, Gartner noted. These include contract management, sourcing and supplier management with additional expected use cases to include supporting supplier performance management, P2P and analytics.

 

“The window for building competitive advantage through early adoption of GenAI in procurement is narrowing,” said Sommers. “Despite this, procurement technology leaders should remain aware of the obstacles to successful implementations, notably in the areas of data quality and integration of GenAI with their current systems.”

Sommers added that companies should look to launch “targeted use-case pilots” that can help clarify what capabilities are scalable. Also, monitor developments in the market and look for opportunities to leverage Gen AI without the need to build proprietary infrastructure.

Transformative, eventually

Overall, Gen AI seems to be off to a slow start. EY research has found that while many companies have implemented Gen AI initiatives, 62% of those companies reassessed those programs in the past 12 months and only 7% completed deployment. It doesn’t mean that Gen AI is not living up to its promise, but it could be that companies are still trying to find the right fit for the transformative technology.

In the EY survey, 38% of respondents cited data quality as a top challenge, and another 33% said access to data was a challenge. Matthew Burton, partner and EMEIA supply chain and operations leader at EY, said that is not surprising, as data is often siloed in different departments and systems across organizations leading to “potentially incomplete data.”

More Hype Cycle insights

While Gen AI is getting much of the limelight, there are a number of additional AI-driven technologies that are approaching Gartner’s Peak of Inflated Expectations stage, including autonomous sourcing, predictive analytics and conversational AI.

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