The Predictive Enterprise: How Realigning Incentives Can Accelerate Procurement

This article originally appeared on Forbes.com as part of the Forbes Technology Council on August 27, 2026.

Procurement has always been a balancing act between cost, quality and delivery. Today, there is a fourth constraint: the speed of the decision-making process itself.

An excellent agreement is only excellent if it is reached in time to meet the urgency of the business need. Budget owners and stakeholders are increasingly impatient.

Procurement may deliver value, maybe even strategic value, but if the deal takes much longer than expected to close, these contributions will not always be appreciated by internal stakeholders and budget owners. For procurement leaders seeking to be viewed as trusted advisors and skilled negotiators, long or unpredictable dealmaking cycles pose a real challenge.

In the first installment of this series, I explored the apparent conflict between supplier rationalization (fewer suppliers) and supply chain resiliency (more suppliers) and how the predictive enterprise approach offers a useful framework for leveraging AI to transform this double bind into a win-win.

This second double bind is just as familiar: Procurement teams today are expected to negotiate better deals across more spend while helping the business move faster, often without adding additional headcount.

The only way to deliver this outcome at scale is by redesigning the process so that better deals take less cycle time.

Why Dealmaking Takes Longer Than It Needs To

Procurement teams are typically evaluated on the commercial outcome of a deal. Yet the time required to reach that outcome also affects its ability to meet operational requirements, such as lead time.

Logistics procurement teams know this challenge particularly well. An enterprise team can spend weeks collecting and comparing rates from carriers across thousands of freight lanes, only to discover that capacity and pricing have changed before the analysis process concludes.

The sourcing event may have followed every step perfectly. Yet it still fails to produce the desired outcome of a usable set of freight rates.

Charlie Munger’s well-known dictum was “Show me the incentive, and I’ll show you the outcome.” Salespeople operate within quotas, financial quarters and predefined closing windows for deals. Research by Stanford economist Paul Oyer found that these incentives concentrate sales activity near fiscal year-end.

To anyone who has worked in procurement, the fact that dealmaking activity spikes at year-end may come as a blinding flash of the obvious. What may be more surprising is that this outcome is the result of powerful incentives embedded in the procurement process itself. And these incentives can be reengineered.

Let’s assume for a moment that salespeople at suppliers are trained to hold back their best and final offer in order to manipulate the specific timing that a deal will close (e.g., prior to year-end).

That means that the first offer they have put in front of the business is, by definition, not their best offer. It is an offer that creates an anchor, leaves room to get negotiated down and therefore also leaves value on the table for procurement.

Now, let’s also assume that procurement teams who are aware of the salespeople’s incentives are also willing to play a game of chicken with the year-end deadline. What we have here is a negotiation process where both sides have an incentive to delay.

Making Offers To Suppliers Reverses The Delay Incentive in Dealmaking

Over the past decade, we have seen the rise of a new model in procurement called “predictive procurement.”

In this approach, procurement teams or buyers in the business make offers to suppliers, instead of vice versa. Using AI to simulate a negotiation before it begins allows procurement teams to make offers that are anchored closer to their desired outcome versus the desired outcome of the seller.

However, the reason that predictive procurement creates meaningful gains in speed has little to do with automation. Instead, it has to do with how changing the order changes the incentives.

Predictive procurement puts the ball in the supplier’s court by giving them a starting point. This moves the heaviest decision step away from the oversubscribed procurement team. It may also give the salespeople more transparency into what they need to do to win the deal faster.

Leveraging this simple change in process incentives, predictive procurement harnesses AI to create a world where more deals can be executed in parallel, across much more spend, with much shorter cycle times and yield higher rates of value per deal.

The element of predictive procurement has existed for decades, like target pricing and should-cost models. Over the past decade, as the founder of a company helping large organizations embed AI into procurement processes, I have seen companies scale this approach beyond isolated use cases into a default preferred buying channel for quotes.

However, I’ve also come to understand that making the first offer in a supplier negotiation is not always an intuitive motion for procurement teams. For certain spend archetypes, such as New Product Introduction (NPI) spend, predictive procurement may seem at odds with efforts at clean-slate price discovery.

Part of the reason that predictive procurement has become more popular has to do with its incentives that are built around closing deals faster rather than using delays to withhold concessions.

The Power Of Eliminating Steps: Imagine A World Without Sellers Offering Quotes

What if there was no forced choice between better deals versus faster deals? Let’s imagine a world where the deals with better discounts on cost and superior commercial terms were faster than the worse-off deals.

When procurement makes the first offer, suppliers are incentivized to make their best offer sooner rather than holding back. The result is that better deals take less time than worse-off deals. And when better deals are faster, procurement is perceived as more strategic and more aligned with stakeholder needs.

By controlling and accelerating the cycle time of supplier dealmaking, procurement teams can both earn and expand their role as a trusted advisor. A faster procurement team is one that gets brought into deals early and often, gets elevated within the C-suite and is asked to influence more spend. For any large enterprise, that is a true win-win.