Procurement leaders face a stark paradox in 2026: artificial intelligence permeates their operations, yet few organizations stand fully equipped to harness its potential. A new study from ProcureAbility and ProcureCon reveals that while nearly 100% of chief procurement officers report using AI in some capacity, only 11% deem their teams “fully ready,” with measurable impacts across functions. The remaining 89% grapple with barriers that hinder scaling, even as AI promises to redefine supplier management and strategic sourcing.

“Many organizations are still facing barriers to embracing AI. While these can feel daunting, the real opportunity lies in tackling them systematically—because every obstacle overcome isn’t just progress, it’s a step toward reshaping procurement’s future and defining the leaders of tomorrow,” stated Conrad Snover, CEO of ProcureAbility, in the 2026 Annual ProcureCon CPO Report. This report, based on surveys of senior procurement professionals across industries, underscores a function in transition, balancing technological disruption with enduring human elements.

The top three hurdles cited by the not-fully-ready majority include data privacy and compliance concerns at 67%, insufficient data quality and cross-system integration at 54%, and fears of AI supplanting human judgment at 51%. These issues echo longstanding procurement pain points, amplified by AI’s data-intensive demands. As Snover noted in a related analysis, “Data readiness is the biggest constraint… don’t automate what’s broken. Figure out the process before you implement AI. Otherwise, you’re going to get hallucinations and other problems.”

Supplier Ties Take Center Stage

Amid AI hurdles, CPOs pinpoint enhancing supplier relationships and strategic partnerships as their paramount goal for 2026, with 55% rating it a high priority and 42% moderate. This emphasis signals procurement’s pivot from transactional buying to collaborative value creation. “While procurement is currently undergoing a transformation led by AI, the function remains a people business. The investments organizations make in nurturing supplier, partner, and customer relationships continue to be vital in unlocking long-term value,” said Darshan Deshmukh, president of ProcureAbility.

Trailing priorities include AI-driven automation at 45% and strategic sourcing for business growth at 42%. Yet challenges loom large: talent acquisition and retention tops the list at 54%, followed by balancing cost cuts with expansion at 52%, and ESG compliance at 46%. These pressures highlight procurement’s expanding mandate, positioning CPOs as enterprise strategists.

The report delineates four evolving CPO roles: strategic leaders driving business outcomes, sustainability collaborators, enforcers of supplier AI governance for data quality, and communicators distilling insights for executives. This shift demands more than tech; it requires governance frameworks to ensure responsible AI deployment across supply chains.

Barriers Rooted in Data Fragmentation

Yahoo Finance’s coverage of the report emphasizes structural woes over cultural resistance. “The resistance to change isn’t as real as people think… It’s often about uncertainty, about replacing people, about losing control, because the rules of engagement haven’t been established,” Snover explained. Procurement’s chronic under-resourcing exacerbates this, with AI eyed to automate tactical tasks and elevate focus to strategy.

Fragmented data—lacking a single source for contracts, suppliers, and finances—fuels errors like AI hallucinations. Pilots offer safe testing grounds, but scaling necessitates new operating models and governance. Leading firms are building hybrid workforces where humans oversee AI outputs, positioning procurement for a “seat at the table.”

Earlier ProcureAbility data from the State of Procurement report aligns, showing 100% AI adoption but only 6% advanced maturity. Digital transformation ranks as 65% of leaders’ top initiative, with ESG at 51% and supplier management at 45%. “The real differentiator for CPOs isn’t whether you’ve adopted AI—it’s how quickly and effectively you scale it,” Snover urged.

Broader Industry Shifts Amplify Urgency

Inverto, a BCG company, forecasts AI evolving into connected value engines for 2026, linking demand insights to supplier collaboration via agentic systems. CPOs must orchestrate ecosystems amid geopolitical turbulence, prioritizing resilient networks and supplier-led innovation. “Winning CPOs invest in workforce readiness, operating-model redesign, and cross-functional change management to ensure AI becomes embedded in everyday decision-making,” the firm states in its Procurement Trends 2026 analysis.

Procurement Tactics outlines 12 trends, from AI platforms projected to hit $18.28 billion by 2032 to agentic AI slashing cycle times 50%. Suppliers emerge as innovation partners, with digitally advanced firms securing 2.03 times higher savings. CPOs are advised to govern AI risks per the EU AI Act, regionalize chains, and upskill for digital fluency.

McKinsey notes procurement under a “perfect storm” of macro pressures and digital waves, urging talent upgrades and user-focused tech. Deloitte’s survey reveals 92% of CPOs assessing generative AI, prioritizing decision-making enhancements at 68%. These convergences paint procurement as a value engine, contingent on overcoming AI readiness gaps.

Talent and Governance as Make-or-Break Factors

Talent shortages dominate CPO worries, with Hackett Group echoing the need for AI fluency. Supplier.io highlights small suppliers for resilience, powered by data-first models. As agentic AI automates negotiations—Walmart already handles 68% via bots—procurement pros must pivot to oversight and strategy.

Gartner’s predictions warn of protectionism disrupting chains, demanding category strategies balancing cost, risk, and sustainability. EY data shows 80% of CPOs planning generative AI for spend analytics. Success hinges on human-AI symbiosis: automating grunt work to free strategists.

For laggards, hesitation risks performance lags; pioneers will leapfrog via systemic change. As Snover concludes, “AI has a fundamental capability to automate and improve tactical work… That’s what allows procurement to focus on strategic alignment.” In 2026, readiness separates leaders from followers in this high-stakes evolution.