The role of artificial intelligence across the source-to-pay framework: Theoretical and practical aspects

The procurement function is undergoing a significant transformation driven by the integration of Artificial Intelligence (AI) and other Industry 4.0 technologies across the Source-to-Pay (S2P) process. While prior research has acknowledged the potential of digital procurement tools, there remains a lack of clarity regarding AI's role in specific stages of the S2P framework. This study addresses that gap by examining how AI is applied across three key procurement domains: Source-to-Contract (S2C), Purchase-to-Pay (P2P), and Supplier Relationship Management (SRM). Using a qualitative approach, we conducted semi-structured interviews with procurement professionals to explore AI's practical uses, perceived benefits, and challenges. The findings show that AI enhances efficiency, decision-making, and supplier collaboration, while also driving cross-cutting advances such as orchestration, Application Programming Interface (API) integration, data governance, and new skill requirements. Beyond these process-level benefits, the study highlights practical implications for organizations, including improved cost control, agility, and stronger supplier relationships. Overall, the research contributes to the literature on AI in supply chain management and offers actionable guidance for organizations seeking to leverage digital transformation to innovate and build resilience in procurement. • Explores AI and Industry 4.0 technologies across sourcing and purchasing. • Combines theory and real-world practices of AI in procurement functions. • Provides practical steps for adopting AI and Industry 4.0 technologies in procurement. • Identifies key enablers like data quality, APIs, and organizational readiness. • Offers strategic advice for aligning AI with digital procurement transformation goals.