How Procurement Leaders Can Create Strategic Value With AI

Procurement teams have a broad mandate: they must control costs, manage risk, and support the business with limited time and resources. As a result, critical work such as competitive sourcing, supplier engagement, and stakeholder management often takes a backseat to routine operational demands. AI is beginning to change that.

By automating manual processes and surfacing insights, AI can help procurement teams prevent value leakage and unlock impactful cost savings.  

John O’Connor, VP of Enterprise Transformation and Procurement Officer at Docusign, oversees the company’s shift to AI-powered procurement. He shared how AI helps his team accelerate supplier contracting so projects start on time, reduce spend, and strengthen stakeholder relationships.

Here are three key takeaways from John’s discussion:  

• AI accelerates competitive sourcing and supplier analysis.

• Greater procurement visibility supports earlier engagement and stronger decisions.

• AI agents expand capacity, but effective governance and human oversight remain essential.

How is AI improving the competitive sourcing process? 

AI can improve competitive sourcing by generating a list of suppliers, competitive criteria and the RFP documentation and then analyzing the proposals received.

Busy procurement teams often have to limit competitive sourcing to keep up with contract volume. Instead of researching alternatives and initiating RFPs, they negotiate with the incumbent—saving time but potentially leaving cost savings and other benefits on the table. 

“Prior to AI, the heavy lift for RFPs, and even for processes as mundane as RFIs and RFQs, frequently had us deciding not to do them as a business,” says O’Connor. “When we do compete, we find profound improvements from the incumbent, and we also surprise ourselves with a new party that we can introduce.” 

O’Connor’s team can simply input an existing supplier agreement into an AI-powered procurement platform and quickly generate a roster of comparable suppliers, competitive criteria, and an RFx. Then, once bids come in, the AI-powered platform can make a side-by-side comparison of proposals and provide a recommendation. A process that could once take weeks can now be condensed into an hour. “Our ability to RFx, whether it's RFQ, RFP, or RFI, has become exponentially easier with AI,” O’Connor says. 

O’Connor cautions against squeezing suppliers solely on cost, which can damage relationships. Most suppliers, he says, welcome the chance to demonstrate value, while procurement gains insight into service, delivery, and risk.

How does AI help procurement engage with suppliers earlier?  

Earlier engagement gives procurement and stakeholders more time to assess benefits, tradeoffs, and risks—strengthening supplier relationships and negotiations.

Historically, O’Connor has found proactively managing the pipeline of renewals and encouraging stakeholders to involve procurement early to be challenging. Stakeholders sometimes try to negotiate contracts themselves, which means procurement misses out on the chance to use their stronger negotiating skills. Bridging the divide between procurement and other business functions is becoming simpler with AI. 

"We can generate a pipeline and meet with our stakeholders to show them everything that’s coming up for renewal in each quarter, what their annual operating plan looks like, and what their spend looks like across categories,” says O’Connor. Stakeholders can then identify targets or gaps in capabilities that might need to be addressed. “That's a much, much more strategic approach than just waiting for them to tell us we need help with this negotiation,” he added. 

Hear more about this process in this video.

Using AI tools also helps us identify purchase orders occurring outside of approved procurement workflows, as well as automatic and last-minute renewals. “Those analytics help our leadership say to their teams, ‘Look, folks, we're leaving money on the table by not engaging sooner,’” says O’Connor. 

AI has also been helpful for tracking the team’s cycle times, from request initiation to the close of a transaction. With AI, procurement’s cycle times are trending downward, providing reassurance for their stakeholders. “Opposed to us slowing stakeholders down, we can show them that they’ll go faster with us, save more money, and have more available budget,” says O’Connor. 

How can AI provide a 360-degree view of supplier relationships? 

For O’Connor, managing supplier relationships means going further than just procurement spend. His team also considers the company’s opportunities to sell to those same organizations, creating a broader view of the relationship and what he calls a “balance of trade.” For example, his team doesn’t want to ask for terms on the procurement side (e.g., uncapped liability for data privacy breaches, broad indemnification rights, no publicity) that a vendor could leverage into their negotiation for Docusign products on the sell-side.  

“If we’re in a sell-side engagement, it’s often appropriate for us to talk about whether there is a balance of trade and opportunity,” he says. “We want to be careful that it doesn't become entirely reciprocal, but it certainly is part of the conversation.”

AI is providing this broad view. Tools like Docusign Agreement Desk, a collaborative hub for intake and orchestration, can quickly surface information about pending agreements and spend, giving procurement and sales a clear picture of the full relationship. 

“We now have the ability to respond very quickly and get our arms around what's happening on the buy side with that supplier,” says O’Connor. “It takes two minutes to run everything that's pending. Agreement Desk has become a really, really powerful tool for Customer 360.” 

This visibility can also strengthen procurement’s negotiating position. Teams can identify suppliers with potential sell-side opportunities and consider including them in initial bids. Understanding the broader relationship helps procurement approach negotiations with more context while giving suppliers another reason to participate.

AI can also help procurement identify opportunities to consolidate suppliers. Agreement Desk can show how many suppliers an organization has within a category, where there may be overlap, and where increasing wallet share with one supplier could lead to better rates.

How will AI change procurement’s role? 

As O’Connor sees it, procurement teams are looking for ways to optimize spend under management and drive more savings, but their current capacity is limited. AI dramatically expands that capacity. As agents become more capable, they'll be able to take on more work with less human oversight, freeing procurement professionals to focus on high-value activities.

O’Connor adds a note of caution to this new way of working. “The guardrails are going to become incredibly important,” he says. “If you're actually giving agents agency to make commitments on behalf of the company, you need to make sure your guardrails are pristine.” 

O’Connor expects procurement organizations will become flatter as AI takes on more operational work. Contract management can be streamlined with tools like Docusign Agreement Manager, while strategic sourcing can be assisted by agents. That shift can free employees to focus on the parts of procurement where human judgment matters most.

AI can also extend the reach of procurement. Today, teams may choose not to negotiate smaller contracts because the potential savings aren't worth the time and effort required. If AI reduces that effort, procurement can address more transactions without adding resources. “You don't necessarily need to have that artificial threshold,” says O’Connor. “That's where the opportunity to influence spend goes up with fewer resources, and that's a golden formula for procurement.”

Bring AI-powered agreement management to procurement with Docusign

AI is here to stay, and procurement teams can expedite their transformation with Docusign Intelligent Agreement Management (IAM). Docusign IAM, built on the native AI engine Docusign Iris, connects and optimizes every step of the procurement process by embedding AI automation and agents into the agreement cycle. Trained on documents and document workflows, Docusign IAM helps procurement teams eliminate repetitive, manual tasks and gain greater visibility into their procurement pipelines and agreements. A March 2026 survey by Docusign and Deloitte found that only 8 percent of procurement respondents reported using agentic AI, compared to 17% of sales teams.

Learn how Docusign helps procurement teams gain total control over their operations with an end-to-end agreement platform.  

Frequently asked questions

How is AI transforming procurement?

AI helps procurement teams automate labor-intensive tasks, improve visibility into supplier and contract data, and engage with stakeholders and suppliers earlier. It can also expand procurement capacity by assisting with sourcing, analytics, governance, and other repetitive processes.

How can AI help procurement teams control spend?

AI can help procurement teams identify opportunities for competitive sourcing, vendor consolidation, and increased wallet share with strategic suppliers. By reducing the time required for these activities, AI allows teams to influence more spend without necessarily adding resources.

How can AI help procurement teams manage supplier relationships?

AI can give procurement teams greater visibility into spend, pending agreements, and supplier overlap. This holistic approach to managing suppliers can help procurement professionals leverage buy-side opportunities to negotiate more strategically, consolidate suppliers, and manage supplier relationships.