Procurement leaders face a stark disconnect: Every organization in a new survey deploys artificial intelligence in some capacity, yet only 11% deem themselves fully prepared to scale it effectively. ProcureAbility’s freshly released 2026 Annual ProcureCon CPO Report, drawn from senior professionals across industries, spotlights this gap as organizations grapple with data hurdles and strategic shifts.

The report, partnered with ProcureCon, reveals 100% of respondents utilize AI in operations, with 65% calling themselves ‘mostly ready’ amid pilots and strategies. But the remaining 89% flag three dominant obstacles: data privacy and compliance worries at 67%, subpar data quality and system silos at 54%, and fears of AI supplanting human discernment at 51%. ‘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 release.

This comes as chief procurement officers (CPOs) prioritize supplier ties—55% deem it a high focus, 42% moderate—followed by AI automation at 45% and sourcing intelligence at 42%. Challenges ahead include talent struggles (54%), cost-growth balance (52%), and ESG demands (46%).

Ubiquitous Adoption Masks Maturity Deficit

ProcureAbility’s findings echo prior benchmarks. Their 2025 AI Adoption report showed 92% satisfaction with tools, 88% planning investment hikes, yet 59% limit AI to targeted initiatives. Top uses: supplier discovery (77%), spend analysis (76%). Benefits span cost cuts (55%) and sustainability gains (54%). Barriers then included proof shortages (35%), change resistance (29%), echoing 2026’s data woes.

In a Yahoo Finance analysis of the 2026 report, Snover emphasized, ‘Data readiness is the biggest constraint,’ warning against automating flawed processes to avoid hallucinations. Procurement’s fragmented data—spanning ledgers, contracts, suppliers—demands harmonization for reliable AI outputs. ‘Test pilots give you a training-wheels program,’ he noted, as 65% stick to contained trials lacking governance for scale.

Snover views AI as procurement’s leapfrog chance: ‘AI has a fundamental capability to automate and improve tactical work. That’s what allows procurement to focus on strategic alignment with the business and finally earn a seat at the table.’ Laggards risk enterprise drag, he cautioned.

Data Privacy Tops Hurdles in Fragmented Systems

The 67% citing privacy/compliance reflect broader tensions. Deloitte’s 2024 CPO survey pegged data security as the prime external threat for generative AI, with quality second internally. Skills shortages compound issues, demanding curiosity and tech savvy. McKinsey’s insights highlight user experience gaps stalling P2P and SRM tools, urging CPO reorganization for AI.

ProcureAbility’s site for the report adds: 82% foresee amplified CPO influence, prioritizing cloud platforms (43% mission-critical). CPOs evolve as strategists, sustainability collaborators, AI governance drivers, and communicators. ‘While procurement is currently undergoing a transformation led by AI, the function remains a people business,’ said Darshan Deshmukh, ProcureAbility president.

Earlier ProcureAbility data, like their October 2025 benchmark, showed 100% AI use but just 6% advanced maturity, with digital transformation topping 2026 agendas at 65%.

CPO Priorities Signal Strategic Pivot

Supplier partnerships lead 2026 agendas, underscoring procurement’s relational core amid AI push. Deshmukh noted, ‘The investments organizations make in nurturing supplier, partner, and customer relationships continue to be vital in unlocking long-term value.’ Talent retention at 54% challenges scaling AI, as teams need reskilling for analytics and governance.

Broader industry voices align. Procurement Tactics forecasts AI risk management rising, with CPOs defining agentic AI rules. ISG’s study cited in Art of Procurement shows procurement at 6% of enterprise AI cases, trailing sales, signaling catch-up potential. EY’s 2025 CPO survey has 80% planning gen AI in three years, focusing analytics and contracts.

Coupa’s research flags data/integration as 77% barriers, urging platforms with governance. ‘This research is a wake-up call,’ said Dennis Bruder, Coupa’s AI chief product officer.

Overcoming Barriers Through Governance and Pilots

Snover advocates hybrid models: ‘Leading organizations already have hybrid workforces… AI is going to be one of those tools.’ Pilots build proof, but scaling demands operating models. ProcureAbility’s prior reports stress cultural shifts: ‘The most successful organizations are pairing technology deployment with cultural change,’ per Satyen Pathak, managing director–India.

As CPOs drive supplier AI standards and sustainability, the report positions them as enterprise linchpins. With 82% expecting clout gains, per ProcureAbility’s page, proactive firms will embed AI strategically, turning barriers into edges. Hesitation yields to systematic action in this pivotal shift.