– Article by Philip Allouche – Founder of SaaSrooms
AI spending skyrocketed to $13.8 billion in 2024—a more than sixfold increase from the $2.3 billion recorded in 2023. Yet despite this significant financial commitment, the anticipated gains in procurement productivity largely failed to materialize. In fact, 91% of procurement leaders reported falling short of their cost optimization targets, highlighting that first-generation AI like chatbots and basic automation do not, and cannot, address the core challenges of technology spend management.
In response, leading companies are rethinking how AI should operate for procurement. What’s emerging is the Agentic Age of Technology Spend Management—where AI agents aren’t just assisting; they’re transforming the workflows that drive cost savings and value creation.
These agents go far beyond tactical labor like automated purchase orders or processing invoice approvals. Instead, they can serve as a bespoke strategic partner—a hybrid management consultant and procurement engineer who never rests—that allows the best procurement teams to negotiate seven-figure contracts by excelling at vendor management, contract renewal planning, executive negotiation, value/cost mapping and more.
A new Accenture survey revealed that 96% of executives anticipate that agentic systems will automate tasks and workflows in their organizations within the next three years. However, only 12% have deployed such tools at scale. When combined with the ROI that agentic AI and workflows deliver, this indicates an important opportunity to leapfrog the competition.
What To Look For When Choosing Agentic AI And Workflows
At the most general level, AI agents can make decisions, take actions and even learn on their own to achieve specific goals. They interact with multiple data sources and systems, reasoning and responding to new situations.
Applied to the complicated field of technology spend management, AI agents promise to unlock savings opportunities and accelerate negotiations. Agentic AI and workflows can engage internal data, systems and processes to forge more strategic relationships with vendors. This not only streamlines operations but enables procurement teams to complete complex negotiation motions consistently and quickly—at scale. But with so much buzz about agentic AI, here are three key requirements to consider:
- Surface Agnostic: Agentic AI and workflows are most effective when delivered precisely when and where procurement professionals need them. This means that they should not exist in a silo; they must be available wherever the procurement team operates (such as Slack, Teams, Copilot, etc.)
- Domain Expertise: Agentic AI must be purpose-built for the target audience, e.g., enterprise procurement teams have different needs from public sector purchasing departments. Purpose-built, trusted agentic workflows should be designed and built by domain experts who understand the nuances, complexities and requirements of the end customer.
- Ongoing Optimization: Agents must continuously analyze vendor contracts to proactively surface new savings opportunities and negotiation strategies based on changing business and financial priorities. Taken across the entire procurement organization, agents can collectively provide a complete, accurate understanding of potential cost savings over time and guidance on how to apply effort in the right ways at the right time to maximize ROI.
When these capabilities align, the power of agentic AI can drive significant productivity gains. Take contract renewal planning, one of the most arduous tasks in procurement, yet one that is highly correlated to cost optimization success. An agentic workflow for contract renewal can automate about 80% of the planning process, from data gathering and research to interpreting pricing models to strategic negotiation.
AI agents can autonomously gather internal data points like usage metrics, current contract terms and existing relationships; identify overprovisioned services; uncover consolidation opportunities and identify additional stakeholders needed to build consensus. This means reducing the time it takes to build a renewal strategy from weeks to hours while improving the quality of the negotiation and procurement outcomes.
Welcome To The Agentic Age Of Technology Spend Management
Industry leaders like to say that agentic workflows represent the biggest change in the way that technology has been used in business in the last several decades.
This is a real disruption. Recently, a large Financial Services organization drove down the creation of its initial contract renewal strategies from seven weeks to seven minutes by using agentic AI workflows. And agentic AI has helped another Fortune 500 company reduce technology spend by 28% and increased average contract savings by 54.8% in 2024.
The message is clear: It’s time to embrace the Agentic Age of Technology Spend Management. Agentic AI won’t replace procurement professionals, but procurement organizations using agentic AI will likely replace those who don’t.
