Tariffs Driving Up IT Spend? Here’s How AI-Powered Procurement Can Help
- Unmanaged IT spend, often hidden within complex procurement processes, drains significant budget.
- AI-powered spend management tools integrated into procurement platforms offer unprecedented visibility and control over IT expenditure.
- Strategic use of procurement software transforms IT spend management from a reactive task to a proactive driver of value and efficiency.
May 07, 2025 | Procurement Software
Think about the last time your team wrestled with an unexpected surge in cloud costs or the renewal of a sprawling software license agreement. The complexity often lies not just in the technology, but in the procurement processes that govern its acquisition.
Are you truly seeing the full picture of your IT spend, or is it being obscured by fragmented purchasing, decentralized approvals and a lack of real-time data?
Getting IT spend under control is imperative, especially with the tariff situation in the US potentially causing tech spend to rise even faster than expected, and spending on AI set to grow rapidly.
According to Gartner projections, enterprise AI spending is expected to grow significantly until at least 2028, especially in the services sector, with expected compound annual growth rates of 132.5% for generative AI applications and 131.8% for generative AI managed services.
This reallocation of resources means companies must implement more sophisticated procurement strategies or risk uncontrolled spending across both traditional IT and emerging AI investments. With AI systems requiring complex infrastructure, specialized talent and ongoing optimization, the financial stakes are higher than ever for procurement teams lacking advanced visibility tools.
The Hidden Cost of Procurement Silos
For too long, procurement and IT have operated in relative silos when it comes to technology acquisition. IT identifies the need, and procurement executes the purchase, often without a holistic view of existing assets, usage patterns or potential overlaps.
This disjointed approach breeds inefficiency and allows significant amounts of IT spend to drift unmanaged. A lack of transparency creates fertile ground for budgetary waste and missed optimization opportunities.
AI Transforms Procurement from Cost Center to Strategic Asset
Now, imagine a different scenario: your procurement platform has AI-powered spend management tools specifically designed to tackle the complexities of IT expenditure. We’re not talking about just tracking purchase orders; it's about gaining visibility and deeper insights into every IT-related transaction.
Consider a company grappling with escalating SaaS costs. Their AI-powered spend management tools, integrated within their procurement system, automatically analyze usage data against subscription levels across all departments.
AI identifies hundreds of underutilized licenses, flagging them for potential downgrades or cancellation. It also analyzes contract terms, highlighting opportunities for consolidation and better pricing during renewal negotiations.
Suddenly, the procurement team isn't just processing invoices; they're proactively identifying and realizing significant cost savings in the IT budget.
Illuminating Shadow IT and Optimizing Contracts
The benefits extend beyond software subscriptions. AI-powered spend management tools can also shine a light on the often-murky world of shadow IT – those unauthorized software and hardware purchases made outside of official channels. By analyzing network activity and expense reports, AI can identify these rogue expenditures, allowing IT and procurement to address security risks and consolidate spending under approved vendors.
Furthermore, these intelligent tools can revolutionize IT contract management. Imagine an AI tool that automatically flags upcoming renewals, analyzes historical pricing data and even benchmarks vendor proposals against industry standards. With that capability, your procurement team can negotiate stronger terms, avoid costly auto-renewals and ensure you get the best possible value for every IT dollar spent. It's about moving from reactive contract management to proactive optimization, driven by data-backed insights.
Strategic Procurement: The Linchpin of IT Value
The integration of AI-powered spend management tools within procurement platforms marks a fundamental shift in how organizations approach IT expenditure. It transforms procurement from a transactional function into a strategic partner in maximizing the value of IT investments. By providing granular visibility, automating analysis, and offering actionable insights, these tools empower both procurement and IT leaders to make smarter decisions and align technology spending directly with business objectives.
Are you ready to harness the power of AI-powered spend management tools to finally gain control of your rising IT spend and unlock its strategic potential? Explore how GEP's integrated procurement platform with advanced AI capabilities can help you transform your approach to IT spend management and turn a potential drain on resources into a powerful engine for growth.
