This month, in his exclusive PASA column ‘Gordon’s Window’, Gordon Donovan, VP of Global Procurement Research at SAP, provides a handy expert summary of April’s global procurement research.
Save your own time reading research when you can get the key takeaways in one place!
The reports this month indicate that the procurement landscape of 2025 stands at an inflection point, shaped by artificial intelligence’s rapid evolution, intensifying supply chain disruptions and shifting strategic priorities that demand unprecedented agility.
As organisations navigate geopolitical turbulence, inflationary pressures and sustainability mandates, procurement leaders face dual imperatives; harnessing emerging technologies while fortifying foundational capabilities.
This analysis synthesises insights from a number of pivotal industry reports to reveal how AI-driven automation is redefining operational models, why supply chain resilience now requires multi-tier risk visibility and what separates leaders leveraging “purposeful AI” from those trapped in pilot purgatory.
Read on to discover how top-performing organisations achieve 3.5x revenue growth through aligned data governance, why 60 percent of AI initiatives risk failure without addressing talent gaps and which metrics (from Scope 3 emissions to time-to-recovery) are reshaping procurement’s value proposition.
The Hackett Group: Supply Chain Agenda
The 2025 Supply Chain Agenda and Key Issues Study highlights five critical focus areas for procurement leaders: cost optimisation, supply chain resilience, digital transformation, talent development and risk mitigation.
These priorities align with broader enterprise objectives to enhance customer satisfaction, achieve cost leadership and navigate disruptions.
Cost Leadership and Efficiency Imperatives
Improving supply chain cost-efficiency remains the top priority for organisations, with cost of goods sold (COGS) identified as the most critical metric. Over 75 percent of organisations view economic downturn risks as a major concern, necessitating leaner procurement strategies. 58 percent of organisations underperformed on inventory turnover metrics, underscoring the need for procurement to collaborate with supply chain partners on inventory optimisation.
Building Supply Chain Resilience
Geopolitical tensions, trade wars and supply disruptions rank among the top enterprise risks.
Procurement must prioritise supplier diversification, with 63 percent of organisations focusing on qualifying alternate suppliers and conducting regular risk evaluations. Multi-sourcing strategies and regionalising supply networks will mitigate vulnerabilities.
Digital Transformation and AI Adoption
Digital transformation re-entered the top five supply chain priorities for the first time since 2022, with planning technologies and predictive analytics delivering the highest business value. While Generative AI adoption is nascent, 50 percent of organisations are piloting AI tools for demand forecasting, spend analysis and contract management.
Talent and Skill Development
Talent acquisition and upskilling emerged as the top initiative for 2025, with 72 percent of organisations prioritising capabilities in AI, data analytics and change management.
Risk Mitigation and Strategic Alignment
Procurement’s role in risk mitigation extends beyond supplier evaluations to include geopolitical monitoring and logistics flexibility. Adjusting transportation modes and nearshoring critical suppliers are key tactics, aligned with the enterprise-wide goal of improving on-time-in-full (OTIF) performance.
Gartner
There have been a number of reports from Gartner this month, so rather than exploring them one by one, I’ve combined them into key takeaways.
AI and Data Analytics Dominance: All reports highlight AI/GenAI and data analytics as top priorities, with 68-72 percent of CPOs prioritising these investments. However, 49 percent cite data accuracy and governance as critical barriers, underscoring low data maturity as a systemic challenge. 60 percent of CPOs may fail to realise AI’s value due to governance gaps, according to one of the reports, and stresses that low data maturity could delay ROI until 2028.
Sustainability and Risk Management: Sustainability integration into procurement processes (e.g. supplier selection, contract management) and proactive risk management (e.g. geopolitical, supply disruption) are universal priorities. Supplier risk management ownership remains fragmented, with 31 percent attributing it to CPOs, 28 percent to supplier risk managers and 18 percent to strategic sourcing teams.
Talent Transformation: Structural labor shortages and evolving workforce preferences necessitate gig workers (predicted to comprise 25 percent of procurement talent by 2029) and reskilling for strategic roles (e.g. insight generation, AI oversight).
Innovation as a Future Value Driver: While cost reduction remains the top value proposition for 2025, innovation is projected to surpass it by 2030. This requires capabilities like supplier collaboration and digital platforms.
These reports collectively urge procurement leaders to balance innovation with foundational improvements, aligning data, talent and risk strategies to future-proof operations.
HFS: Market Impact Report
The HFS Research report reveals a divide in AI adoption, with only 12 percent of enterprises (Phase 3 leaders) achieving “Purposeful AI” maturity, driving 3.5x higher revenue growth (seven percent vs. two percent) than Phase 1 laggard.
Five lessons emerge:
Break IT-Business Silos: Phase 3 leaders deploy joint AI leadership teams (48 percent vs. 33 percent in lower tiers), aligning investments with strategic goals rather than IT budgets. Organisations relying solely on IT funding (55 percent of GenAI projects) face misaligned priorities.
Escape Pilot Purgatory: While 37 percent remain stuck in experimentation, Phase 3 enterprises achieve 34 percent enterprise-wide AI deployment through standardised governance and automated validation frameworks.
Use Data Responsibly: Only seven percent fully integrate enterprise data with GenAI. Leaders in Phase 3 expose 39 percent of sensitive data securely via robust governance, enabling cross-departmental access for 64 percent of use cases.
Prioritise Cultural Transformation: 65 percent of employees resist AI adoption due to job fears. Phase 3 organisations report 5x productivity gains by embedding mandatory upskilling and ethical AI training.
Centralise Governance: Just 28 percent have defined GenAI data policies. Successful enterprises implement ethics boards (43 percent vs. nine percent in Phase 1) and allocate $6M+ annually to AI/ML vs. $3M for GenAI.
GEP: Outlook 2025
The GEP Outlook 2025 report identifies six critical trends that will redefine procurement strategies, operating models and value metrics.
Artificial intelligence will catalyse a three-phase transformation of procurement operations, fundamentally altering how teams function:
1. Assist Phase: AI acts as a “co-pilot”, automating repetitive tasks such as spend analysis, contract drafting and fraud detection. While decision-making remains human-led, productivity gains allow teams to focus on strategic initiatives like supplier innovation
2. Perform Phase: Advanced AI autonomously manages workflows like category strategy development and demand forecasting, validated by human oversight. Team structures shift towards roles emphasising data analytics, AI governance and complex supplier management
3. Empower Phase: Business users leverage AI-driven self-service platforms for routine procurement activities, while professionals pivot to strategic supplier relationships and value-chain optimisation. Traditional roles decline, replaced by specialists in AI oversight and cross-functional collaboration.
Procurement must invest in data infrastructure, AI fluency and talent strategies that prioritise strategic thinking over transactional execution.
Orchestration platforms enable end-to-end automation of source-to-pay processes, embedding AI-driven recommendations for supplier selection, pricing and compliance. These tools reduce manual effort by 30-50 percent while enhancing agility in responding to disruptions.
Procurement’s success metrics are expanding to include resilience, sustainability and regulatory compliance:
1. New KPIs: Measure supply chain flexibility (e.g. time-to-recovery from disruptions), Scope 3 emissions reductions and ethical sourcing compliance
2. Resilience Trade-offs: Investments in dual sourcing, safety stock and nearshoring may increase costs by 10-15 percent but prevent revenue losses during crises
3. Supplier Relationships: Strategic suppliers are co-innovation partners, not transactional vendors. Contracts must include sustainability clauses and scorecards should track ESG performance.
Geopolitical fragmentation and trade wars are forcing a rethink of globalised supply chains, such as regionalisation. Over 60 percent of firms are shifting production closer to key markets to reduce dependency on volatile regions.
ProcureCon: The 2025 Annual ProcureCon CPO Report
The 2025 ProcureCon CPO Report highlights significant shifts in procurement leadership, emphasising strategic influence, technological integration and sustainability. Three core themes emerge as critical for CPOs navigating the evolving landscape:
1. Expanding Strategic Influence: Chief Procurement Officers (CPOs) now play a pivotal role in organisational strategy, with 53 percent of respondents noting increased CPO involvement in high-level decision-making over the past year. This trend is expected to accelerate, as 63 percent anticipate further expansion of the CPO’s strategic role.
Aligning procurement strategy with business goals (42 percent) and leveraging advanced analytics (38 percent) are identified as top methods to strengthen partnerships across functions.
2. Technology as a Catalyst for Transformation: Artificial Intelligence (AI) dominates priorities, with 66 percent of CPOs prioritising its integration into procurement processes. While 82 percent have identified AI use cases and 90 percent are exploring AI agents for optimisation, confidence in execution remains low; only 27 percent feel fully prepared to deploy AI effectively.
Key challenges include data quality (75 percent) and integration hurdles (88 percent). Concurrently, 38 percent prioritise enhancing data analytics tools to improve spend visibility and 33 percent focus on AI-driven sourcing. Collaborative leadership is critical, as 60 percent of technology initiatives involve multiple executives alongside CPOs.
3. Balancing Sustainability and Operational Demands: While 48 percent rank ESG goals as a high priority, operational pressures persist. Maverick spend reduction improved for 64 percent of organisations, but supplier risk (23 percent) and quality metrics (26 percent) declined. CPOs must address these gaps while navigating inflationary pressures and supply chain volatility, cited as top challenges by 40 percent of respondents.
APQC: 2025 Supply Chain Priorities and Challenges
The 2025 supply chain landscape underscores procurement’s critical role in building resilience amid persistent disruptions. Key takeaways from this report include:
Strategic Supplier Relationships: Supplier relationship management (SRM) emerged as the top priority (50 percent of respondents), emphasising collaborative partnerships over transactional compliance. This shift recognises that supplier success directly impacts organisational agility during geopolitical conflicts, material shortages and logistics challenges.
Digital Transformation: 35 percent of organisations prioritise implementing AI-powered procurement technologies to enhance supply chain visibility and analytics capabilities.
Process standardisation (46 percent adoption rate) serves as the foundation for effective digitisation, enabling scalable automation while curbing maverick spending.
Risk Mitigation: Procurement teams increasingly focus on multi-tier supplier risk mapping, with 52 percent leveraging SRM improvements to identify vulnerabilities in extended supply networks. This aligns with growing concerns about geopolitical risks (impacting 50 percent of organisations) and cybersecurity threats.
WorldCC: AI in Adoption Contracting
The 2025 WorldCC report on AI adoption in contracting reveals significant shifts between 2023 and 2025, marked by fluctuating enthusiasm, maturing use cases and evolving barriers.
In 2023, initial excitement post-ChatGPT’s release saw 40 percent of professionals anticipating rapid AI integration.
By 2024, this optimism waned as implementation complexities became apparent, though personal GenAI usage surged.
By 2025, pragmatic adoption rebounded, with 42 percent of organisations actively implementing AI in contracting (up from 30 percent in 2024), signalling renewed confidence in AI’s operational value.
The report identifies that early applications focused on automation (e.g. data extraction, contract summarisation). By 2025, AI’s role expanded to strategic tasks like contract value realisation (76 percent aspiration), risk prediction and RFX preparation.
While security (63 percent concern) and data quality (49 percent) remain top challenges, post-implementation surveys show reduced fears – 38 percent reported fewer concerns about AI errors, highlighting improving trust as systems mature.
CFOs now prioritise ROI-linked metrics like cost savings (10 percent measurement focus) and financial performance (11 percent), necessitating clearer business cases from procurement teams.
Resistance to change persists (40 percent cite it), but early adopters emphasise AI’s role in augmenting – not replacing – human skills. Training gaps remain critical, with only 33 percent of employees receiving formal AI upskilling.
The report underscores AI’s potential to transform procurement from tactical to strategic, but success hinges on addressing human, technical and financial barriers with targeted, evidence-based strategies.
As always, reach out to discuss more. I’m always happy to hear your thoughts!
