In this article
You might like
No items found.
See the latest spending trends for 25k+ companies on Ramp

Benchmark your company's expenses with Ramp's data.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Spending made smarter
Easy-to-use cards, spend limits, approval flows, vendor payments —plus an average savings of 5%.1
|
4.8 Rating 4.8 rating
Error Message
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Get fresh finance insights, monthly
Time and money-saving tips,
straight to your inbox
|
4.8 Rating 4.8 rating
Thanks for signing up
Oops! Something went wrong while submitting the form.
Ready to partner with Ramp?
Time is money. Save both.
Ready to partner with Ramp?
Time is money. Save both.
Ready to partner with Ramp?
Time is money. Save both.
Table of contents

Procurement has significant challenges due to manual, labor-intensive processes, including vendor selection, cost management, and supply chain disruptions. Artificial intelligence transforms procurement processes by automating critical tasks, from supplier identification to vendor negotiations.

This advancement represents a significant shift for contemporary businesses, enhancing operational efficiency and decision-making. 

In this article, we will explore AI sourcing tools in detail, examining their impact on procurement practices and their ability to improve cost efficiency and supplier management.

What is AI sourcing in procurement?

In simple terms, AI sourcing in procurement refers to leveraging artificial intelligence to automate and optimize supplier identification, evaluation, and management.

Traditionally, procurement teams would manually sift through endless supplier databases, Request For Proposals (RFPs), and market trends to find the right vendors. Now, AI tools can analyze this vast data more efficiently, providing businesses with actionable insights.

Benefits of AI Sourcing in procurement

Managing vendor relationships becomes a tedious task as global supply chains become complex. Here's why AI sourcing is crucial for procurement:

  • AI tools help businesses save money by facilitating competitive bidding and identifying suppliers that offer the best value. They can predict future price trends, helping procurement teams negotiate better deals.
  • Supply chain risks, such as vendor underperformance or disruptions due to geographical issues, are a significant concern. AI can flag potential risks early on, allowing businesses to find alternatives before problems escalate.
  • One of AI's greatest advantages is its ability to automate mundane tasks. What previously took days, such as supplier vetting and RFP management, can now be done in hours.

Top AI sourcing tools in procurement

AI sourcing tools have emerged as invaluable assets in procurement, each offering unique features tailored to different business needs. Here's an overview of the top AI tools transforming procurement:

1. Ramp

Ramp’s AI-driven procurement platform revolutionizes purchasing by automating workflows and enhancing transparency. With its advanced features, businesses can improve decision-making and reduce inefficiencies in their procurement processes.

Key features:

  • Ramp consolidates procurement requests, making tracking, approving, and managing spending across departments easy.
  • The platform automates approval workflows, reducing delays and streamlining procurement operations.
  • Integrates with tools like Slack, enabling instant communication between procurement teams for quicker decision-making.
  • Provides actionable insights for managing vendors, identifying cost-saving opportunities, and improving procurement ROI. 
  • Provides AI-driven insights for better vendor negotiations. Offers real-time insights by comparing vendor quotes using data from 25,000+ businesses.
  • Identifies redundant subscriptions and unused services for cost optimization.
  • Matches purchase orders with invoices and flags discrepancies like duplicate charges.

2. LevaData

LevaData provides real-time insights into supplier performance, market trends, and cost-saving opportunities, enabling better supplier negotiations and risk mitigation.

Key features:

  • Offers deep insights into material spending, uncovering cost-saving opportunities by processing large datasets.
  • Predicts risks, optimizes sourcing strategies, and enables better negotiation with suppliers.
  • Analyzes lead times and geopolitical risks to manage supply chain vulnerabilities proactively.
  • Provides vendor scorecards for tracking performance and strengthening supplier partnerships.
  • Delivers real-time updates on pricing trends and alternative suppliers to help companies stay competitive.

3. Xeeva

Xeeva Sourcing leverages deep expertise across multiple spend categories and provides comprehensive supplier and product data, allowing businesses to make data-driven decisions efficiently.

Key features of the tool:

  • Access to complete supplier and product data across 70 spend categories.
  • Buyer-focused taxonomy for precise indirect spend management.
  • Collaboration tools to streamline sourcing operations and contract management.
  • AI-powered insights for accelerating eRFQ and auction outcomes.
  • Integration with Xeeva Marketplace, offering vetted suppliers across diverse categories.

4. Fairmarkit

Fairmarkit focuses on tail spend management. It automates supplier discovery, bidding, and purchasing processes, helping companies cut costs and enhance procurement efficiency.

Key features of the tool:

  • Automates sourcing for tail spend and RFx management, saving time and reducing manual work.
  • Uses AI to recommend optimal suppliers based on past performance and cost.
  • Easily integrates with existing ERP systems for smooth data flow and operations.
  • Provides access to a global network of vetted suppliers to promote competitive bidding.
  • Offers detailed insights into spending data to optimize procurement strategies.

5. Keelvar

Keelvar specializes in optimizing large-scale, intricate sourcing activities, particularly in logistics, raw materials, and transportation industries.

Key features of the tool:

  • Designed to optimize large and complex sourcing events across multiple categories, including logistics, transportation, raw materials, and MRO (Maintenance, Repair, and Operations).
  • Using AI-driven bots automates repetitive procurement tasks, such as RFx and auctions.
  • Leverages machine learning to provide data-backed recommendations for supplier selection and bid optimization.
  • Provides category-specific insights to manage both direct and indirect spending effectively.
  • Allows users to run various what-if scenarios for more informed decision-making.

6. Scoutbee

Scoutbee Discovery Gen AI is a supplier discovery platform that utilizes Generative AI to make procurement more efficient. Procurement teams can quickly find suppliers through natural language interaction by shifting from keyword-based search to conversational AI. This AI assistant tailors results to specific needs, making supplier scouting faster, more accurate, and more secure.

Key features of the tool:

  • The conversational AI interface engages in natural language queries to find suppliers quickly.
  • Instant supplier search delivers results within seconds using continuously updated data.
  • The result rating system refines search accuracy over time with user feedback.
  • Enhanced security ensures data protection with encryption and compliance protocols.

AI in procurement – cognitive and innovative procurement explained. Learn about cognitive technologies driving smarter decisions. Read now!

Comparison guide for AI sourcing tools

This comparison guide breaks down the pros and cons of leading AI sourcing tools to help you choose the best solution for your business.

Tool Pros Cons
Ramp
  • Streamlines workflows through automation
  • Enhances vendor transparency and approval workflows
  • Integrates seamlessly with communication tools like Slack
  • Less suitable for businesses needing extensive supplier management, as it lacks tools for discovering and vetting new suppliers.
  • Limited to primarily integrating with NetSuite and QuickBooks, which may be a drawback for businesses using other financial software.
LevaData
  • Real-time insights on supplier performance and market trends.
  • Predictive analytics for risk mitigation.
  • Detailed procurement spending visibility.
  • Pricing can be expensive for smaller businesses.
  • The setup process is complex, especially for teams without dedicated resources.
Xeeva
  • Access to comprehensive supplier and product data.
  • Strong for managing indirect spending.
  • AI-driven insights for rapid RFQ outcomes.
  • High cost, starting at $75,000/year/user, which may be prohibitive for small businesses.
  • Lacks flexibility for smaller-scale operations.
Fairmarkit
  • Excellent for automating tail spend management
  • AI-based supplier recommendations
  • Integrates smoothly with ERP systems
  • Reporting features are limited, and lacking detailed supplier evaluation criteria.
  • Bid management does not account for quality or durability beyond price.
  • Steep learning curve due to multiple modules.
Keelvar
  • Great for complex sourcing, especially in logistics and transportation
  • Machine learning-based bid optimization
  • Category-specific insights for both direct and indirect spend
  • Confusing user interface, particularly with data filtering options.
  • Some functionalities are missing; they are not fully optimized for all procurement categories, particularly in direct procurement.
Scoutbee
  • Uses conversational AI for fast supplier discovery
  • Instant search results with continuously updated data
  • Enhanced security and compliance protocols
  • Pricing is not transparent and is available only upon request.
  • As a newer platform, it is still evolving, with some features yet to be fully developed.

Steps to implement AI sourcing in procurement

Implementing AI sourcing requires careful planning to ensure it integrates smoothly into your existing systems. Here’s a step-by-step guide:

Step Action
Step 1: Assess procurement gaps
  • Identify inefficiencies in current procurement processes.
  • Conduct a thorough review of slow supplier onboarding, long negotiation cycles, and poor spend visibility.
  • Gather input from procurement teams to understand their pain points and challenges.
  • Analyze historical data to pinpoint recurring issues that may affect efficiency.
Step 2: Choose the right AI tool
  • Evaluate the size and complexity of your procurement operations.
  • Consider the scale of your supplier network and the specific functionalities you require from an AI sourcing tool.
  • Determine your available budget for AI sourcing tools.
  • Research different options, comparing features, costs, and potential ROI.
  • Select a tool that best fits your requirements, ensuring it can address the gaps identified in Step 1.
Step 3: Integrate with ERP systems
  • Plan for integration to seamlessly incorporate the selected AI sourcing tool with your existing ERP systems.
  • Collaborate with IT and software vendors to develop an integration strategy that minimizes disruption.
  • Facilitate smooth data exchange between the AI tool and ERP systems to enhance operational efficiency.
  • Test the integration thoroughly to confirm that all systems communicate effectively before full implementation.
Step 4: Train procurement teams
  • Develop training programs for procurement teams to familiarize them with the new AI tools.
  • Use hands-on workshops, tutorials, and documentation to enhance learning.
  • Educate teams on interpreting data-driven insights provided by the AI sourcing tools.
  • Encourage ongoing training and support to ensure the teams are confident and proficient in using the new technology.
Step 5: Start small and scale
  • To test the system's effectiveness, begin by automating a specific area of procurement, such as supplier onboarding or contract management.
  • Collect feedback from users and analyze performance metrics to evaluate the success of the pilot.
  • Identify any additional areas for improvement or expansion based on the insights gained.
  • Gradually extend the use of AI sourcing tools to other areas of procurement based on the performance results and feedback.

Risks and challenges of AI sourcing in procurement

While AI sourcing tools offer numerous benefits, there are also risks and challenges to be aware of:

  • AI might favor well-known suppliers over smaller or newer vendors, limiting competition because of algorithms.
  • Handling large volumes of supplier data can raise privacy and security risks.
  • Human oversight remains essential to avoid making decisions solely based on algorithmic recommendations.
  • Integrating AI tools with existing procurement platforms can be both complex and costly.

How to choose the right AI sourcing tool for procurement?

When selecting an AI sourcing tool for procurement, consider the following factors:

  • Identify inefficiencies like slow supplier onboarding or poor spend visibility, and choose a tool that addresses these pain points.
  • Ensure the tool offers essential features such as automated workflows, vendor management, risk mitigation, and real-time insights.
  • Seamless integration with existing ERP systems is crucial to minimize disruption.
  • The tool should adapt to your specific procurement processes and scale as your business grows.
  • Ensure strong security measures to protect sensitive supplier data.
  • Choose a tool with continuous vendor support and regular updates to keep your team proficient.
  • Look for advanced AI features like predictive analysis, cost-saving insights, and supplier recommendations.
  • Ensure the tool grows with your business, managing different spend categories and supplier networks.
  • Opt for a user-friendly platform with a short learning curve for your team.
  • The tool should flag potential supplier risks and ensure compliance with procurement regulations.
  • Analyze the tool’s cost against the potential savings and ROI it can generate.
  • Review case studies or customer testimonials to ensure the tool’s effectiveness.

Conclusion

By automating tasks like supplier evaluation, spend analysis and risk mitigation your business can unlock significant savings and streamline operations. As the business evolves, AI sourcing tools will continue to play a critical role in enhancing procurement efficiency and competitiveness.

Ramp is your all-in-one solution for automating procurement workflows, improving transparency, and driving cost efficiencies. With its AI-driven platform, Ramp empowers your team to make smarter sourcing decisions faster. Get started with Ramp today and unlock your business's full potential for AI-driven procurement.

Try Ramp for free
Error Message
 
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Group Manager of Product Marketing, Ramp
Chris Sumida is the Group Manager of Product Marketing at Ramp, located in Ladera Ranch, California. With almost a decade in product marketing, Chris has a knack for leading successful teams and strategies. At Ramp, he’s been a driving force behind the launch of Ramp Procurement, which makes procurement easier and more efficient for businesses. Before joining Ramp, Chris worked at Xero and LeaseLabs®️, creating and implementing marketing plans. He kicked off his career at Chef’s Roll, Inc. Chris also mentors up-and-coming talent through the Aztec Mentor Program. He graduated from San Diego State University with a BA in Political Science.
Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.

FAQs

How Evans Hotels saved time and gained spend visibility with Ramp

“Ramp has been a big win for us when it comes to transparency and visibility. If the executive team wants to dig into spend at a property or review purchases the teams are making, we can have that information really quickly and are confident it’s accurate.”
Caryn Fink, Director of Accounting, Evans Hotels

How Ramp became KIPP Nashville’s biggest financial win

"There was no fire drill for the beginning of the school year this year, because the schools had a process. Ramp will ingest the line items automatically, so no more manual import. It’s made the process so much easier."
Carey Peek, CFO, KIPP Nashville Public Schools

How SAMGI saved time, reduced fraud, and improved employee experience with Ramp

"We transitioned to Ramp without a hitch—our vendors didn’t even notice. Plus, we were able to switch to suppliers with better pricing, thanks to Ramp’s automated receipts and controlled budgets."
Kathleen Cole, Corporate Controller, Surgical Affiliates Management Group

How Ramp made life easier for Adrift Hospitality

“Before Ramp it was more complicated and tedious to do expenses. Honestly it used to be my least favorite tasks- reconciling and coding charges at the end of each month. There are so many more impactful places I can spend my time.”
Beck Blasko, COO, Adrift Hospitality

How Precision Neuroscience streamlined systems and slashed data entry with Ramp

"Ramp’s OCR has been so useful on the procurement side. It automatically takes all the information from the quote and saves all the data entry that we would have otherwise had to type into a purchase order.”
Brian Lautenbach, Financial Controller, Precision Neuroscience

How Liquid Measurement Systems reduced fraud, improved UX, and drove efficiency with Ramp

“Because people can do their own receipts so easily and code in real-time, our accountant has minimal work to do at the end of the month."
Sarah Paxman-Bean, Director of Finance & IT, Liquid Measurement Systems

How Pair Eyewear consolidated systems, enhanced efficiency, and refocused resources with Ramp

“We love NetSuite and Ramp together. It’s like they’re long lost cousins and they’ve come back together. It’s like they were built for each other.”
Staci Robinson, AP Manager, Pair Eyewear