The Hackett Group, a leading generative artificial intelligence (Gen AI) consultancy and executive advisory firm, has released its 2025 Digital World Class® Procurement research, revealing how top-tier procurement organisations are excelling amid ongoing economic volatility and redefining their strategic roles within enterprises. Despite the economic pause many companies have adopted to conserve cash and protect margins, a select group of procurement teams—termed Digital World Class®—continue to outperform significantly.
These high-performing procurement teams deliver a remarkable 2.6 times greater return on investment (ROI) compared to their peers. They manage operations with 31% fewer full-time employees and maintain costs that are 19% lower as a percentage of spend. Their success is largely attributed to adopting intelligence-driven operating models and harnessing advanced technologies like generative AI to accelerate execution and seize opportunities more rapidly, amplifying their strategic impact.
Chris Sawchuk, principal and Global Procurement Executive Advisory practice leader at The Hackett Group, highlights that these organisations are not merely weathering volatility but using it as a catalyst to transform procurement into a faster, more agile, and insight-led business partner. This metamorphosis is underpinned by four key differentiators:
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Strategic by Design: Digital World Class teams allocate far more resources to strategic activities such as spend management, stakeholder engagement, and supplier management. They leverage operational speed as a competitive advantage, achieving 58% shorter requisition-to-purchase order cycle times and 24% shorter sourcing cycles.
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Sustained Value Delivery: These top performers anticipate cost-saving opportunities more effectively, generating over twice the cost savings relative to spend than their counterparts. They also excel in reducing maverick buying and contract noncompliance, thereby lowering savings lost by 60%.
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Talent Investment: Digital World Class procurement organisations double the annual training hours per employee compared to peers, focusing keenly on digital and AI skills, business acumen, and soft skills. This commitment to talent retention results in markedly lower turnover and 25% longer average tenure among managers, fostering organisational stability and deep institutional knowledge.
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Advanced Digital and Intelligence Capabilities: Investing nearly twice as much in procurement technology, these organisations empower analysts to spend 26% more time on data analysis rather than manual data collection. Their sophisticated information architectures support intelligent dashboards for comprehensive reporting, analytics, and scenario modelling—including areas like cost models, supply risk, and sustainability. Notably, they are moving beyond pilot phases of AI and Gen AI to broader deployments in 2025, further enhancing resilience and intelligence.
Supporting this analysis, supplementary research from The Hackett Group indicates that Digital World Class procurement teams operate at up to 25-33% lower costs than typical organisations, with productivity advantages exceeding one-third. They offer higher-value services such as enhanced stakeholder engagement, stronger supplier relationships, and innovation in product sourcing. Moreover, full adoption of digital tools has the potential to reduce operational costs by up to 45% for standard teams, while world-class teams achieve an additional 33% reduction, freeing resources to invest further in digital transformation and value creation.
Despite a recent trend of rising procurement operating costs—driven by supply disruptions, inflation, and environmental and social governance initiatives—Digital World Class organisations maintain their edge by optimising costs, operating at 21% lower expense with 32% fewer staff than typical peers. This efficiency translates into a multi-million-dollar annual cost advantage and a sustained performance premium, including higher net margins and superior return on equity.
To help typical procurement organisations bridge this performance gap, The Hackett Group’s research outlines a blueprint for transformation. Key recommendations include reinventing service delivery to prioritise speed, stakeholder experience and risk-adjusted execution; embracing Gen AI and agentic AI technologies to automate complex tasks and generate insights at scale; deploying AI for autonomous sourcing, contract management, and stakeholder support; investing robustly in workforce development with a focus on AI fluency and agile working; enhancing information architecture and analytics capabilities; treating external providers as strategic innovation partners; and evolving governance to foster agile, insight-led operations.
The Hackett Group’s report, titled “Transform Procurement Performance with Intelligence and Gen AI,” provides a comprehensive roadmap for procurement organisations aiming to future-proof their operations amid an unpredictable global landscape. As the digital and AI revolutions accelerate, those procurement teams that embrace these changes stand to not only survive but lead with distinction in the coming years.
Source: Noah Wire Services
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