Welcome to the December 2025 edition of Gordon’s Window with Gordon Donovan, your comprehensive guide to the latest shifts and challenges in global procurement and supply chain management. Save your own time reading research when you can get the key takeaways in one place!
Across the reports this month, three trends stand out:
- Flexible, agile procurement operating models are the new competitive differentiator
- AI and analytics drive efficiency and resilience, but require deliberate strategy, skills investment and integration
- Contract and supply chain complexity demand advanced intelligence platforms and process automation
Procurement leaders should prioritise business-aligned technology adoption, scenario-based planning and cross-functional talent development. Process and organisational design must emphasise agility and strategic value, deploying orchestration and AI tools wherever possible. Agility and digital mastery will define the winners.
Raindrop: Ambition Meets Attrition
An interesting report that discusses how procurement and finance leaders face a major gap between their ambitions around agility and AI innovation, and their ability to deliver real change.
Raindrop’s survey of 1,000 US decision-makers shows 73 percent prioritise flexibility, yet only 27 percent feel empowered to innovate, and a staggering 18 percent have not adopted any AI in procurement.
Legacy cost-focused mindsets, slow institutional buy-in, outdated technology and skills shortages block progress.
The COVID pandemic and subsequent shocks (Ukraine, Panama Canal, shipping crises) forced abrupt changes. Many teams found themselves unprepared – 40 percent endured severe delays – and years spent prioritising cost savings over digital capability left organisations exposed.
AI adoption is limited but promising. Only 15 percent have embraced advanced tools, yet over 80 percent see themselves responsible for innovation. Barriers include culture, investment and skills gaps, not system readiness alone.
The report insists that flexibility in procurement is no longer optional. It must be linked to strategic business outcomes, not just cost or risk metrics. AI’s best opportunities – in data analysis, automation, collaboration and risk management – free talent for strategic work.
Leaders should measure procurement not only by savings but alignment with growth, supplier relationships and business enablement. The future will favour those who move rapidly to adopt AI, change executive perceptions and partner with proven technology providers to close readiness gaps.
Practical next steps include: Invest in AI-native platforms, upgrade talent and restructure incentives around flexibility and strategic impact. Flexibility, combined with AI, is now the critical foundation for future-proof procurement.
Zip: State of Spend
Zip’s global survey of 1,030 procurement and finance leaders reveals that AI already shapes how businesses plan, hire and spend. Over two-thirds (67 percent) use AI in spend and supplier management, with 17 percent deploying it widely.
The shift is broad: Processes are moving digital, tech stacks are fragmenting and spend priorities are shifting from goods to people-based services, especially professional services, consultancy and contingent labour.
Nearly three-quarters now factor AI capability into hiring decisions, and IT headcount is projected to rise, while procurement teams remain flat or shrink in large organisations.
Despite strong optimism around AI, execution lags. Most leaders feel somewhat prepared, but lack defined strategies, skills and operational governance. The top skills for future procurement are AI fluency, data analytics and supplier collaboration.
Smaller companies embrace best-of-breed and orchestration approaches, while large enterprises consolidate and await incumbent vendor innovation. Leaders cite inflexible processes as the single biggest barrier to procurement’s influence; modernisation and automation are urgent.
Spend control and tech strategy must reflect this landscape. Procurement leaders should prioritise data architecture for orchestration, embrace hybrid tech stacks and focus savings on people-related services.
The next three years require deliberate investment in talent, process redesign and adoption of orchestration technologies. AI will reshape operating models, but success depends on business alignment and technology readiness.
S&P Global: Supply Chain Q4 Outlook
According to S&P Global’s latest report, the Q4 2025 supply chain outlook is dominated by uncertainty: tariffs, trade reviews and sector-specific duty changes that will disrupt global flows.
US duties remain in flux – from emergency (IEEPA) programs to Section 232 and 301 reviews impacting electronics, medical supplies and aerospace.
Trade activity is slowing: October saw a 0.4 percent drop year-on-year, with weak growth forecast (1.7 percent for 2026).
Container shipping volumes contract sharply, affecting supply chain costs and timelines. Corporate profits globally have taken a $900 billion hit from supply disruptions and tariffs since January. Firms pass higher costs to consumers selectively, negotiate with suppliers for cost sharing and delay long-term investments in favour of tactical responses.
Regulatory complexity in the US, EU and Asia persists, with ongoing legal cases and shifting exemptions constantly redrawing the risk map. Climate, cyber and conflict risks add further stress.
The report highlights sustained tactical decision-making, with little strategic investment until more policy clarity arrives. Vertically integrated firms have more resilience, but weak supply chains see margin expectations fall by up to 140 basis points.
Procurement leaders should focus on cost modelling, flexible sourcing and contract renegotiation to weather the ongoing uncertainty. Develop deeper supplier relationships, optimise for agility and watch labour cost structures when considering reshoring options.
APQC: AI in Procurement
This report covers the top use cases and benefits of AI adoption in procurement which, according to the research, remain limited.
Over half (58 percent) of surveyed organisations have yet to implement AI, but those that have reported substantial results. The top three use cases are spend analysis (78 percent), sourcing insights and pricing intelligence.
AI tools automate spend classification, detect anomalies and forecast spend. They support supplier discovery, scenario modelling and help manage price fluctuations, renegotiation and total cost of ownership evaluations.
Benefits include improved data quality (80 percent see gains), stronger decision making, increased savings, scaled expertise and reduced contract leakage.
AI enables higher data accuracy, proactive risk management and process automation. It lets procurement functions standardise contracts, analyse risky terms and respond faster to business changes. Procurement teams should experiment with guided onboarding, contract risk analysis and predictive tools.
The report urges firms to address privacy and ethics, manage verification and prepare robust governance to maximise AI benefits.
McKinsey: Transforming Procurement Functions for an AI-Driven World
This article, which takes data from several surveys, suggests that procurement functions face a “perfect storm” combining macro volatility and digital disruption.
Managed spend per FTE is up 50 percent over five years; expectations and complexity have grown. AI agents promise radical gains – potentially driving 25-40 percent efficiency improvements by shifting non-strategic work to automation. Leading firms create hybrid workforces where procurement professionals partner with digital agents, freeing time for strategy. Organisational maturity correlates with profitability. Strategic category management, dedicated centres of excellence and advanced analytics drive tangible value (five percentage points or more in EBITDA margin for leaders).
Examples include firms saving 10-20 percent on costs after redesigning category and sourcing models, deploying AI for invoice reconciliation and leveraging COEs for process excellence.
Attendees at McKinsey’s CPO Forum cite stress, talent and digital enablement as top priorities. Many still underuse procure-to-pay, SRM and e-sourcing tools.
The best advice: Separate strategic and transactional roles, build out COEs, invest in AI and data analytics, and elevate procurement to a central, business-driving function. Process automation is the bedrock of the reimagined procurement organisation.
Icertis: Navigating Tariffs
According to this viewpoint from Icertis, rising tariff complexity forces procurement teams to rethink contract management and sourcing strategies.
The report argues that contract intelligence is critical for navigating cost increases, compliance and supply disruptions brought about by rapidly changing trade policies.
CFOs now cite tariffs as their top concern, up 270 percent this year. Practical responses include pull-forward sourcing, stockpiling, shifting production and contract renegotiation.
Their key advice: Audit contracts to identify price adjustment, termination and hardship clauses. Incoterms, fixed-price and price adjustment clauses determine who bears tariff costs and ability to renegotiate.
Organisations need centralised and AI-enabled contract intelligence to surface critical terms quickly. The average large enterprise has contract data in 24 systems, leading to poor visibility and missed opportunities – up to 70 percent of contract value is lost to obligations not tracked.
Icertis showcases AI-driven workflows for renegotiation, onboarding new suppliers and compliance management.
Leaders should integrate contract intelligence platforms to automate workflows and harmonise terms with ERP systems. The agile use of contract insights ensures rapid, strategic responses to new tariffs and mitigates risk.
As always, reach out to discuss more. I’m always happy to hear your thoughts.
