The ‘State of Source-to-Pay Digitization 2025’ report reveals a major shift in global procurement strategies, with increased budgets for digital tools and AI adoption accelerating to improve resilience and cost savings amidst economic uncertainty.
The latest “State of Source-to-Pay Digitization 2025” report from Ardent Partners reveals a significant shift in procurement strategies worldwide, driven by increased investment in technology and a growing focus on artificial intelligence (AI). Based on survey and interview responses from 358 procurement executives globally, the report paints a picture of procurement functions adapting to an increasingly complex and uncertain operational environment.
One of the most notable findings is that over half of Chief Procurement Officers (CPOs)—53%—have increased their budgets for Source-to-Pay (S2P) technology compared to the previous year, a marked rise from 30% in 2024. This reflects a rising confidence in digital tools to enhance procurement performance, operational resilience, and cost control. The report attributes much of this budget growth to the challenges presented by volatile global trade policies and tariffs, prompting procurement teams to double down on cost savings, mitigate supply risks, and push forward with digital transformation initiatives. With 90% of CPOs anticipating 2025 to be more challenging than 2024, 71% are prioritising cost savings, 42% are targeting supply risk reduction, and 37% are focusing on digital transformation efforts.
Vishal Patel, Senior Vice President Product Marketing at Ivalua, emphasises the evolving role of procurement: “As external challenges evolve and supply chains recalibrate from recent disruptions, organizations are re-evaluating costs, dependencies, and resilience. Procurement is once again stepping into the spotlight, with technology now central to business performance.”
The report highlights a rapid acceleration in AI adoption among procurement teams. Nearly half of all CPOs currently utilise some form of AI, with a further 49% planning to adopt AI technologies in the coming year. AI’s applications are varied, spanning supplier discovery, spend and contract analysis, and sourcing activities. Most CPOs see AI as a productivity enhancer, with 79% expecting tangible productivity gains. Nearly half anticipate improvements in decision-making, while others look to AI to boost stakeholder engagement, forecasting accuracy, operational efficiency, and cost savings.
However, the report stresses that the success of AI and broader digital transformation efforts is heavily dependent on data quality and accessibility. Nearly half of the surveyed CPOs (48%) identified better data visibility and advanced analytics capabilities as the most effective means to enhance procurement performance. Poor data quality and limited access to relevant data remain major barriers, cited by 42% of respondents as hindrances to effective S2P technology use.
Patel underscores the crucial role of data in unlocking AI’s potential: “To fully realise AI’s promise and maximise its impact, organizations must treat data as a core enabler of transformation and innovation. That requires investing in data quality, building AI literacy, and adopting integrated S2P platforms built on strong data foundations. The AI transformation will be a continuous journey that demands agility, trusted data foundations, and the ability to adapt at scale.”
Looking forward, almost half of CPOs (47%) intend to adopt integrated S2P platforms within the next year to better navigate operational complexities and improve supply chain management. This trend points to a future procurement landscape where technology-driven insights and automation are central to managing risks and extracting value.
Commissioned by Ivalua and conducted by Ardent Partners, the “State of Source-to-Pay Digitization 2025” report provides an up-to-date overview of how procurement departments are evolving amid economic uncertainty, geopolitical shifts, and ongoing supply chain disruptions. The findings underscore the critical importance of investment in technology and data-driven strategies to enhance procurement performance and resilience in the years ahead.
Source: Noah Wire Services
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