Laying the foundation: Preparing government procurement for AI integration

While much has been said about the potential of AI to revolutionise procurement processes within Government agencies, this article takes a different approach. Rather than exploring futuristic scenarios or the art of the possible, we focus on what truly matters now: the groundwork required to enable AI to deliver meaningful transformation across Government procurement. Success doesn’t start with technology—it starts with preparation. That means setting up the right structures, building capable teams, and ensuring your data and performance metrics are robust from day one. Without these foundations, even the most advanced AI tools will fall short.

The digital evolution of procurement

AI is at the forefront of every government and business agenda, promising transformative potential across organisations. For governments, the fiscal pressure to reduce costs, boost efficiency, and improve performance has never been greater. One of the most critical areas under scrutiny is procurement—where transparency, value for money, and outcomes are under the spotlight.

To meet these demands, governments must accelerate investment in digital transformation, with AI as a key enabler. Yet many are unsure where to begin: which areas to prioritise, how to build strong foundations, and how to bring their people along on the journey. 

How AI is enabling better procurement outcomes

Digital tools have already changed the way procurement supports broader organisational goals—and the introduction of AI is set to take that even further. For procurement professionals, this means moving beyond traditional tasks and playing a more strategic role. With the right approach, AI can help procurement teams deliver greater value, faster insights, and stronger alignment with the organisation’s priorities.

Through our work with our clients, we’re seeing first-hand how AI is transforming procurement—making it faster, smarter, and more efficient. Some of the key benefits include:

• Boosting productivity: AI tools enhance team efficiency by streamlining tasks and bridging skill gaps across the workforce.
• Unlocking new savings: Automated sourcing, smart benchmarking, and predictive insights lead to better commercial outcomes.
• Improving supplier performance: Real-time data from multiple sources helps identify issues early and hold suppliers accountable.
• Enhancing spend visibility: AI aggregates and analyses real-time spend data, offering a clear, unified view of spending patterns and anomalies.
• Optimising working capital: AI helps manage payment terms, inventory, and rebates, while forecasting future cash flow needs.
• Strengthening compliance and reducing risk: Continuous monitoring and real-time data analysis enable quick course correction and better decision-making.

These are just a few examples of how AI is reshaping procurement, and the list is by no means exhaustive. As the technology continues to evolve, the opportunities to drive value, efficiency, and resilience across the function will only grow.

Priorities for integrating AI in your procurement processes

To successfully integrate AI into your procurement process, it’s essential to focus on the practical steps that lay the foundation for long-term impact. Rather than jumping straight into technology adoption, procurement leaders should consider four key priorities that ensure AI delivers real value—both operationally and strategically. These priorities help build the right environment for AI to thrive and support better, faster, and more transparent decision-making.

1. Implementing AI is an iterative journey

Success is rarely achieved through a single ‘big bang’ implementation. An iterative and scalable approach allows you to learn from real-time feedback and build internal capability and trust. This mindset also enables more targeted use cases and proof-of-concepts that can scale based on real-world outcomes and team readiness.

2. Empowering teams with AI-driven capabilities

AI should be used to elevate people, not replace them. By automating lower-value and repetitive tasks, it frees up your people to focus on critical thinking and enable higher-order decision-making earlier in their workflows. This shift demands a different skillset and mindset. 

3. Data quality is critical 

AI systems are only as good as the data that powers them. Ensuring access to clean, clearly defined, and continuously enriched data enables accuracy, reliability, and fairness - driving confidence in AI-powered insights and decisions. Building robust data governance, defining sources of truth, and ensuring ongoing data stewardship are critical steps to making AI a sustainable and scalable capability. 

4. Redefining success

Traditional financial metrics are just one measure of success. Forward-thinking organisations are shifting towards outcome-based metrics that reflect procurement’s evolving role as a strategic enabler. AI should be judged not just by what it automates, but by how it helps procurement deliver business-wide impact.

How Baringa can help

As the pace of change accelerates, Baringa is uniquely positioned to support organisations embarking on their AI-enabled procurement transformation journey. We help shape procurement operational strategies that align with evolving demands, assess the readiness of your people, processes, and technology to adopt AI, and identify capability gaps within your teams. Our approach includes prioritising AI initiatives that not only reduce procurement costs but also enhance performance, developing robust vendor management strategies, and establishing clear frameworks for measuring benefits.

If you would like to discuss any of the themes discussed in this article, please reach out to our team.