Category management has underpinned strategic procurement since the 1980s. Born from Peter Kraljic’s seminal Harvard Business Review article and the automotive industry’s need to segment spend, it revolutionised how organisations approached purchasing. By treating categories as “mini-businesses” with tailored strategies, Procurement shifted from transactional buying to value-driven partnerships. Frameworks such as the Kraljic Matrix provided structure—until globalisation, sustainability mandates, and AI disrupted the status quo.

Today, the stakes are higher. Deep commercial knowledge, understanding not just what we buy but how markets and industries are converging, is critical. Where rail travel and car ownership were once distinct, we now see integrated mobility models combining multiple transport modes. This convergence is mirrored in Procurement: category boundaries are blurring as technology becomes embedded across functions. A category manager can no longer specialise solely in Marketing or HR; they must now navigate Martech and HRtech, where digital platforms, data analytics, and automation are essential. Most categories—Professional Services, Facilities Management, and beyond—now demand IT fluency and the ability to collaborate across traditional silos. As industries learn from and merge with one another, Procurement’s complexity and pace of change only intensify.

This volatility demands agility. Yet many are still bogged down in manual data crunching, static category plans, and unreliable insights, leaving little room for strategic thinking or stakeholder engagement.

The Shifting Terrain of Indirect Spend

Historically overshadowed by its glitzier cousin Direct Procurement, Indirect Procurement is maturing. It now sits at the intersection of employee experience, brand reputation, carbon accounting, and financial resilience. Categories such as IT services, HR, Marketing, Professional Services, Business Travel, and Facilities are no longer “non-core.” They are, in many cases, strategic levers of competitive advantage—or reputational landmines.

Consider this: contingent labour spend isn’t just about cost per head—it’s tied to DE&I goals, human rights risk, and talent access in a fluid workforce. Marketing spend? It reflects your brand’s ethical and carbon footprint, especially when working with multiple agencies on complex campaigns. Even office supplies face scrutiny when ESG auditors come knocking. Category managers can’t afford to be commodity buyers. They must be influencers, analysts, risk managers, and sustainability strategists—and they need tech to keep up.

AI in Procurement: Beyond the Hype

The future belongs to category managers who embrace AI as a force multiplier—not a threat. Far from being mere hype, AI is already streamlining tasks such as invoice processing, supplier onboarding, and spend classification, reducing processing times by more than 50%.

In CASME’s recent podcast “Future-Proofing Category Management,” Telia’s CPO Nicolas Passaquin reinforces this view, affirming that AI is no longer a buzzword but an operational reality. He shares how Telia’s procurement function is embedding AI across workflows, including the use of AI to rapidly and accurately review multilingual supplier contracts during recent M&A activity. In this area, significant efficiency gains were realised. He also highlights Telia’s development of AI-enabled, autonomous RFP/RFQ capabilities, which empower end users to run fast, compliant tenders independently. This not only accelerates time to value but also frees up category managers to focus on more strategic and complex negotiations. Listen to the episode HERE. 

These examples demonstrate that AI’s true potential lies not in replacing procurement professionals, but in augmenting their capabilities:

Research & Intelligence: AI agents scan 80+ data sources in minutes—market reports, sustainability certifications, geopolitical trackers—flagging price trends or supply chain risks.

Writing & Communication: Tools such as ChatGPT draft tender templates, supplier responses, and stakeholder reports, with an estimated time saving of 6–8 hours per week.

Scenario Modelling: AI doesn’t just test hypotheses; it creates them. For example “What if biofuel costs rise 30% by Q3?” Complete with impact projections or digital twins stress-testing supplier strategies.

Coaching and Training: AI-powered platforms design micro-learning programmes for onboarding, compliance, and negotiation, plugging procurement skills gaps.

Soon, AI “agents” will serve as specialist advisors: a sustainability bot auditing supplier carbon data, a legal navigator interpreting clauses in real-time, a finance analyst modelling TCO for cloud services. These digital colleagues won’t replace Procurement, they will take care of the heavy lifting, freeing up time to focus on relationships and strategy.

The New Category Management Playbook

As AI reshapes workflows, new roles will emerge:

1. AI Whisperers – Tech-savvy strategists who train bots on category-specific nuances
2. Data Storytellers – Analysts who translate AI insights into boardroom-ready narratives
3. Digital Twin Managers – Specialists managing virtual supply chains for real-time risk simulation.

One truth remains: AI excels at optimising; humans at innovating. While AI can now handle routine negotiations and data exchanges, it lacks emotional intelligence, contextual judgement, and trust-building skills. If a supplier faces bankruptcy, an algorithm might flag it and suggest revised terms—but only a human can read the room, spot unspoken concerns, and craft a solution that preserves both relationship and long-term value.

In moments of ambiguity, it’s the human negotiator who empathises, adapts, and inspires confidence—capabilities still beyond even the most advanced AI.

Actionable Takeaways: Start Small, Think Big

Even if your organisation is hesitant about full-scale AI adoption, start small. Here are some suggestions to consider:

1. Tender Review Prompt
   “Review this set of IT services tender questions. Based on best practice and recent public sector tenders, suggest additions or improvements to cover sustainability, quality assurance, and professional capacity. Highlight any outdated language.”
   → Ensures comprehensive, current tender documentation—without exposing sensitive data.
    
2. Supplier Risk Template Prompt
   “Generate a supplier risk assessment template for Asia-Pacific marketing agencies, including ESG compliance checks.”
   → Aligns third-party practices with sustainability goals, sans manual audits.
    
3. Supplier Evaluation Criteria Optimisation
   "Develop a set of robust criteria for evaluating potential suppliers in [your category/sector]. Include both quantitative and qualitative performance indicators, risk assessment, compliance with standards, and industry benchmarks. Outline a clear weighting system for each criterion and provide guidelines for scalability and continuous improvement. Ensure the criteria reflect the latest sustainability, quality, and regulatory requirements relevant to this category."→ Strengthens supplier selection processes, ensures alignment with best practice and evolving standards, and supports more transparent, defensible sourcing decisions—without exposing company-sensitive data

Conclusion: The Human-AI Synergy

AI won’t commoditise category management—it will elevate it. By automating the mundane, it enables us to hone the art of influence: building alignment, mentoring suppliers on circular practices, and spotting opportunity in the chaos. The future belongs to those who wield AI not as a crutch, but as a catalyst for human ingenuity.

Start small—but start now. Your next breakthrough partnership could be just one prompt away.

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