AI-driven sourcing cuts costs by 20% for Global 2000 firms

New research published by Globality has found that AI-driven autonomous sourcing can reduce costs by 20% and increase productivity by 70% among Global 2000 companies. The study, conducted by HFS Research in collaboration with Globality, highlights significant efficiencies and savings brought about by the use of AI in procurement processes.

The report, entitled "Freedom within Fences: Autonomous Sourcing Goes Mainstream," examines how leading companies such as Fidelity Investments, T. Rowe Price, and UCB Pharma are implementing this technology. According to the findings, organisations are achieving substantial cost reductions while simultaneously boosting productivity and speed-to-market.

Matt Prichard, Chief Procurement Officer at Fidelity Investments, noted the substantial impact of AI-driven sourcing on the company's operations. "We now require only eight resources instead of 50," Prichard said. "We have achieved over 20% savings compared to standard rates. It took about three months to break even, and after that, it was all pure savings resulting in the company's bottom line."

The report highlights several key benefits of AI-driven sourcing and spend management:

Cost Savings: Automated spend management is delivering immediate savings of 20% and enabling enterprises to competitively manage more spend, even with a reduced procurement headcount.

Efficiency and Speed: Traditional RFx processes, which often take up to six months, are significantly streamlined, with autonomous sourcing enabling companies to go to market in as little as 23 minutes and complete 64% of projects in less than a day.

Strategic Impact: AI-driven spend management automates many aspects of the corporate buying model, allowing procurement teams to shift their focus from transactional tasks to strategic initiatives that drive business growth.

Joel Hyatt, Globality's Chairman, Co-Founder, and CEO, emphasised the transformative potential of AI in procurement. "CFOs are seeking to deploy AI to reduce costs and capture operating efficiencies. The procurement function is the low-hanging fruit for achieving that objective because deploying AI-powered sourcing and procurement is the quickest and easiest way for Global 2000 enterprises to generate substantial value," Hyatt said. "Our customers are saving hundreds of millions of dollars through the use of AI-driven sourcing technology and making faster, smarter spending decisions."

The concept of the "Generative Enterprise," as identified by HFS Research, underscores the broader benefits of AI in spend management beyond cost savings. According to the study, AI-powered autonomous sourcing platforms could enable organisations to generate new value through innovation and agile responses to market changes.

Tony Filippone, Chief Research Officer at HFS Research, affirmed the strategic advantages of incorporating AI in procurement. "As organisations navigate a complex and competitive landscape, integrating a top-tier AI autonomous sourcing platform like Globality offers substantial advantages, positioning the spend management function as a critical enabler of innovation, cost savings, and competitive differentiation," Filippone said.

This research underscores the growing recognition of AI-driven technologies in transforming traditional business functions. With significant cost savings and productivity gains, AI-powered procurement solutions are increasingly being viewed as essential tools for enhancing operational efficiency and driving enterprise growth.