Procurement Automation Emerges as Strategic Fix for Construction’s Labor, Inflation and Supply‑Chain Woes

Alberta, Canada, September 3, 2025

News Summary

Construction and industrial operators are increasingly adopting procurement automation to tackle skilled labor shortages, volatile material pricing and supply‑chain disruptions. Companies are replacing spreadsheets and ad hoc processes with connected procurement systems that centralize spend data, speed invoice reconciliation and improve supplier management. Large industrial builds are pairing automation design with procurement strategies to lower risk and standardize repeatable modules, while oilfield and MRO markets embrace specialized RFx and PO tools to shorten sourcing cycles. Successful adoption requires process redesign, talent development and ecosystem integration to shift procurement from transactional work to strategic category management.

Global construction procurement is evolving under pressure from labor shortages, inflation, and disrupted supply chains, prompting a shift toward automated, data‑driven processes. The Engineering, Procurement, and Construction market remains one of the world’s largest industries, with projections of substantial growth through the mid‑2020s. At the same time, the adoption of procurement software is expanding rapidly, signaling a move away from spreadsheets and emails toward integrated, real‑time systems that connect procurement with finance and operations.

Market backdrop and growth prospects

In today’s market, labor shortages, inflation pressures, and supply chain disruptions create complex challenges for project delivery. These forces are driving unprecedented avenues for innovation across the construction sector, with the sector showing a long history of adaptability in cyclical conditions. The global EPC market is projected to reach $974.4 billion by 2025, underscoring the scale of opportunities for firms that adopt modern procurement solutions. The construction procurement software segment was valued at $851.3 million in 2023 and is expected to grow at a CAGR of over 8.5% through 2032, roughly triple the pace of broader EPC growth.

Despite the market’s size, many contractors continue to rely on manual methods such as spreadsheets, phone calls, emails, and handwritten notes. This legacy approach, which has persisted for roughly two decades, often leads to fragmented information, slow invoice reconciliation, and higher error rates. As project complexity rises, the need for real‑time visibility and centralized procurement workflows becomes more pronounced to protect schedules and budgets.

Costs, risk, and the case for automation

Surveys and research highlight the tangible inefficiencies in traditional procurement. For instance, a prominent professional services survey found that manual vendor management contributes to widespread errors, with a large share arising from manual data entry. Delays in material delivery, vendor no‑shows, and poor coordination are linked to significant project delays. In parallel, industry analyses have identified a recurring loss of revenue per project due to late orders, miscommunication, and price volatility. Collectively, these factors emphasize why procurement inefficiencies remain a major source of disruption in construction.

Against this backdrop, procurement automation is positioned to reduce errors, increase efficiency, and convert operational risk into a competitive advantage. A centralized system can provide live pricing access, real‑time order tracking, and supplier performance insights, enabling more proactive decisions that align procurement with finance and operations. Automation also supports faster, more accurate decision‑making, where timing and precision are crucial for protecting margins and schedules.

Leading programs and practical deployments

One notable engagement involves an automated procurement partnership for a major petrochemical project. In this case, an automation provider agreed to support as the automation partner for a large, decarbonization‑oriented facility expansion that includes retrofitting existing assets. The project aims to decarbonize a substantial portion of the site’s emissions and increase ethylene capacity in a phased approach through 2030. The collaboration will examine how automation tools can improve energy efficiency, standardize design practices, and optimize operations across future sites. Specifics include expanding automated control systems, integrating additional I/O channels, and delivering standardized solutions to manage risks and costs. The project is expected to create thousands of jobs during peak construction and hold a meaningful footprint in regional economic development, illustrating how digital systems can support both sustainability goals and workforce activity.

In parallel, procurement software vendors have been advancing capabilities tailored to the oil and gas sector. Key features include RFx or Bid‑Out style bid requests, single‑application communications, audit trails, custom templates, and price validation workflows. These tools aim to replace scattered emails and spreadsheets, providing a unified platform for bid creation, comparison, supplier communications, and spend analytics. The goal is to enable faster sourcing for quick‑turnaround items, robust supplier qualification, and more consistent compliance with procurement terms.

Operational and organizational implications

Experts emphasize that procurement leadership is increasingly central to project outcomes. Shared perspectives indicate procurement teams should move from transactional processing toward a broader operating model that emphasizes digital enablement, category management, and self‑service decision making in some contexts. As regulatory and environmental reporting grows in scope, procurement teams are also expected to align cost programs with carbon programs and to consider supplier risk in the broader context of geopolitical stability. Across industries, talent retention and capability development are identified as crucial factors for driving procurement excellence.

What this means for construction stakeholders

The convergence of market scale, labor and supply chain pressures, and digital procurement capabilities signals a shift toward integrated, data‑driven procurement as a core driver of project performance. Companies that adopt centralized procurement systems, improve supplier collaboration, and leverage real‑time data can better anticipate budget pressures, manage risk, and sustain schedules in volatile environments. The ongoing push toward automation is framed not merely as a tool upgrade but as a strategic rethinking of how procurement fits into the broader project ecosystem—potentially reshaping roles, workflows, and outcomes across the construction lifecycle.

Key takeaways

• Labor shortages, inflation, and supply chain disruptions are prompting a shift to automated procurement.
• Market size and growth projections underscore opportunity for digital procurement adoption.
• Manual processes remain common, but the value of centralized, real‑time systems is increasingly clear.
• Automation supports better data quality, faster decisions, and closer alignment with project teams.
• Industry analyses point to substantial productivity gains and reduced project risk through digital procurement initiatives.

FAQ

What is procurement automation in construction?

Procurement automation involves using integrated software and digital workflows to manage sourcing, bidding, supplier management, purchasing, and payment processes in a centralized system, with real‑time visibility across the supply chain.

Why is procurement automation becoming more important for projects?

Automation helps reduce manual errors, speeds up sourcing, improves supplier collaboration, and provides data analytics that support proactive budgeting and risk management in complex projects.

What evidence supports the move toward digital procurement?

Industry analyses show persistent reliance on manual methods and high error rates, while adoption of procurement software is rising, with a growing emphasis on real‑time data, centralized workflows, and cross‑functional integration.

What is the potential impact on project timelines and costs?

Automation can shorten procurement cycles, reduce delays from vendor issues, and improve cost control through better spend analytics, ultimately helping to protect margins on projects.

What are common features of modern procurement platforms?

Typical features include bid management (RFx), supplier directories, side‑by‑side bid comparisons, audit trails, templates, automated price validation, spend analytics, and integration with invoice processing and purchase orders.

Key features at a glance

Feature	Description	Why it matters
Centralized procurement workflows	All sourcing, bidding, ordering, and invoicing in one system.	Reduces fragmentation and accelerates decision cycles.
Real-time pricing and availability	Live access to material pricing and supplier stock levels.	Improves budgeting accuracy and reduces delays due to stockouts.
Automated bid management (RFx)	One‑click bid requests, side‑by‑side comparisons, and supplier communications.	Speeds up sourcing and enhances supplier selection with data-driven insight.
Audit trails and compliance	Capable of recording all bids, approvals, and changes for traceability.	Supports governance, risk management, and regulatory reporting.
Spend analytics	Centralized data analysis to identify patterns and inform planning.	Enables better forecasting and risk management for future projects.
Automation of supplier management	Faster onboarding, communications, and payment processing.	Strengthens supplier relationships and helps reduce cycle times.

Deeper Dive: News & Info About This Topic

Additional Resources

• ABB: Signs agreement with Dow to support Path2Zero ethylene complex
• Wikipedia: Ethylene
• Enverus: RFx product for oil & gas procurement
• Google Search: Enverus RFx
• Bain: Ready, set, go — AI is poised to automate procurement
• Google Scholar: AI procurement automation Bain
• McKinsey: Procurement 2025 — reimagining the function for success
• Encyclopedia Britannica: procurement
• BusinessWire: CAM Integrated Solutions expands operations with new North Carolina division
• Google News: CAM Integrated Solutions expansion