Over the past two decades, procurement has emerged as a strategic cornerstone for businesses, evolving from a back-office function to a central player in resilience, savings, and innovation. As highlighted in the forthcoming 20th annual CPO Rising – State of Procurement report, Chief Procurement Officers (CPOs) have navigated tumultuous waters marked by financial crises, a global pandemic, geopolitical tensions, and rapid technological shifts. Each of these challenges has reinforced the vital role of CPOs in steering their teams through complexities while delivering significant value.
The new report reflects a pivotal moment for procurement as organisations grapple with myriad global uncertainties, including persistent inflation and supply chain fragility. Current economic conditions are overshadowed by escalating geopolitical conflicts and rapid technological disruption, creating a challenging landscape for businesses. Despite these hurdles, the transformative potential of AI-driven procurement technologies is becoming increasingly unmistakable. CPOs find themselves at the helm of this transition, utilising intelligent systems to enhance efficiency, agility, and data-driven insights—essential elements for thriving in this chaotic environment.
According to research, 46% of CPOs plan to incorporate AI into their operations by the end of 2024. While 28% are already utilising such technologies, the emphasis on AI’s potential to revolutionise procurement processes is clear. As businesses face inflationary pressures, 74% of CPOs are prioritising cost savings, with an increasing focus on incorporating Environmental, Social, and Governance (ESG) initiatives into their strategies. This alignment between technology adoption and sustainability goals underscores the shifting priorities within procurement departments, driven by both external demands and internal innovation objectives.
Additionally, the integration of AI aids in improving decision-making and user experiences. Procurement leaders are not only rethinking how they acquire goods and services but also prioritising budgetary controls amid tightening economic circumstances. Many CPOs are making strides to enhance their teams’ capabilities by closing critical skills gaps and making procurement data AI-ready. The urgency to do so is driven by external pressures such as generational shifts within the workforce and emerging energy crises.
As procurement processes evolve, the use of AI-driven tools will reshape sourcing, contract management, and risk analysis. Addressing challenges like tail spend and maverick spending through AI insights will be paramount in the years ahead. In fact, 66% of procurement leaders consider leveraging AI a high priority, with nearly all (92%) monitoring advancements in Generative AI. With plans to double investments in this area by 2025, the focus on enhancing operational capabilities is evident.
The insights from the CPO Rising report provide a comprehensive industry-wide view of procurement’s current state, capturing the experiences and perspectives of 326 procurement executives. Alongside benchmark statistics and best practice recommendations, this wealth of information is invaluable for organisations seeking to navigate the complexities of the supply chain landscape. As CPOs continue to elevate their roles, the strategic integration of AI and commitment to sustainability will be pivotal in shaping the future of procurement.
In summary, the landscape of procurement in 2025 is marked by a confluence of technological innovation and pressing global challenges. CPOs stand at the forefront of this transformation, wielding the tools and strategies necessary to foster resilience, drive value, and ultimately influence the future trajectory of global supply chains.
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Source: Noah Wire Services
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