Flat budgets and rising costs are squeezing public procurement teams, with inflation eroding purchasing power. Euna Solutions’ 2025 State of Public Procurement Report highlights how agencies are turning to AI and automation to maintain delivery under mounting pressure.
Budget Strains and Staffing Gaps Undercut Delivery
Euna Solutions’ 2025 State of Public Procurement Report highlights a widening gap between stagnant budgets and rising costs. While most agencies report flat funding, inflation and market volatility are steadily eroding their buying power, more than half of respondents named cost pressures as their top concern.
The strain is compounded by limited headcount. Many procurement offices operate with just one to three staff, tasked with managing complex, end-to-end sourcing across multiple departments. Without digital tools to streamline operations, the report notes, large projects can demand more than 130 hours, time that smaller teams simply don’t have. Routine manual processes are eating into strategic capacity and hampering supplier engagement.
Automation and AI Are No Longer Optional
As public sector leaders search for efficiencies, investment in automation is gaining momentum. Nearly 70% of agencies surveyed have implemented or plan to implement contract lifecycle management (CLM) systems within the next 12 months. Other digital priorities include supplier performance tracking and invoice automation, technologies increasingly viewed not as optional upgrades, but as critical to sustaining operational continuity.
Even amid tight budgets, the shift toward intelligent automation is proving difficult to ignore. According to the National Association of State Procurement Officials, 42% of U.S. states now have official AI policies in place. All 54 chief procurement officers surveyed for the report listed AI adoption as a strategic priority this year. Early-stage use cases, such as AI-powered invoice review tools that catch billing discrepancies and digital marketplaces that surface the best-value purchasing options, are already delivering measurable impact.
The Real Bottleneck Isn’t Technology, It’s Procurement Design
While tools like contract lifecycle software and invoice automation are gaining ground, the deeper constraint may lie in how procurement is structured and governed. Fragmented workflows and outdated approval hierarchies often outlast any system upgrade, limiting the returns on digital investment. As public agencies modernize, the focus must shift from digitizing existing processes to redesigning them entirely, removing low-value steps, collapsing silos, and aligning procurement closer to outcomes rather than transactions. Without that shift, technology will only deliver incremental relief in a system overdue for overhaul.