“We need to evolve from procurement professionals into business leaders with procurement expertise.” - Israel Santiesteban, Former Chief Procurement Officer and Head of Supply Chain
AI may dominate today's procurement conversations, but technology alone won't determine who succeeds over the next decade. The organizations that create the most value with AI will be the ones that know how to turn data into better decisions and connect procurement's work directly to business outcomes. Perhaps most importantly, they’ll know how to equip their people with the new capabilities needed to make it happen.
That's exactly what I explored in this podcast conversation with Israel Santiesteban. Israel has led procurement and supply chain transformations across global organizations, and he brings a refreshingly pragmatic and, I’d say, even optimistic perspective to AI and its role in procurement. Rather than viewing it as a replacement for procurement professionals, he sees it as a tool that allows us to solve more complex business problems and create value in ways that simply weren't possible before.
AI Creates Time for Better Decisions
"There are a lot of things that you can do without AI, but when it comes to AI, you need to focus on more complex problem solving and more robust scenario planning."
I really like Israel’s distinction here. Too often, conversations about AI begin with automation. How many hours can we save? Which tasks can we eliminate? Those are worthwhile questions, but they aren't the destination.
Israel's point is that AI creates capacity for something far more valuable. When procurement leaders can model dozens of scenarios instead of one or two, they make better-informed decisions. They can evaluate trade-offs more thoroughly, anticipate disruptions earlier, and bring stronger recommendations to the business.
That's where procurement begins to move beyond execution and become a strategic advisor.
AI Can Finally Unlock Tail Spend
"Tail spend is never getting the love or the attention of the executives or buyers, right? So that's a great area to start with AI. … It would otherwise take you a multi-year project for someone to do it. It can be done in three weeks."
Most organizations have a reasonable understanding of their strategic spend categories. The long tail is a different story. Duplicate suppliers, inconsistent part numbers, fragmented purchasing, and incomplete taxonomy often make meaningful analysis incredibly difficult.
AI can now help procurement quickly organize information that would have taken teams months or even years to classify manually. That doesn't eliminate the need for procurement expertise. It allows procurement to spend less time cleaning data and more time acting on it.
Procurement Has to Redefine Value
"Savings will continue to be top, but now transforming those savings into value, that's what will change the future of procurement organizations."
This is a conversation our profession has been having for years, but AI may finally accelerate the shift. Of course, savings will always matter. Every executive team expects procurement to manage costs responsibly. But the opportunity now is to demonstrate how procurement contributes far beyond negotiated price reductions. The procurement leaders who learn to tell that broader story will find themselves having very different conversations with the business.
AI Doesn't Replace Procurement. It Raises the Bar.
"Your job is not at risk. AI is not taking away your job. We need to learn new skills to utilize the technology to do our job better."
This is the core message I hope procurement professionals take away from our conversation. History has shown that every major technological shift changes the work people do. AI will be no different. Of course, procurement jobs will evolve because of AI. How willing are we to evolve with them?
Israel describes seeing new graduates embrace AI naturally while experienced professionals sometimes hesitate or resist because they worry they're somehow taking a shortcut. That mindset has to change. It’s so important for procurement leaders to become comfortable working with and alongside AI, learning its strengths, understanding its limitations, and using it to create more value for the organizations they support.
