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 February’s global procurement research.
Save your own time reading research when you can get the key takeaways in one place!
Reviewing this month’s reports, a narrative of transformation and adaptation emerges. At the heart of this transformation is the rapid adoption of artificial intelligence and digital technologies.
Procurement teams are increasingly leveraging AI-powered platforms to automate routine tasks, freeing up valuable time for strategic decision-making. This shift is not without its challenges, as organisations grapple with implementation concerns and the need for upskilling their workforce.
Cost reduction remains a cornerstone of procurement strategy, but it’s no longer the sole focus.
Teams are now expected to drive value creation across the business, balancing financial goals with sustainability and ethical sourcing. This expanded role has elevated procurement’s strategic importance, with many teams now steering corporate strategy and collaborating closely with suppliers to fuel innovation.
The geopolitical landscape continues to shape procurement priorities, with supply chain resilience taking centre stage. Teams are bracing for potential ‘black swan’ events, adapting their strategies to navigate inflation, sustainability regulations and talent gaps.
This focus on risk management has led to a shift in operating models, with many organisations centralising their procurement functions and creating dedicated teams for supplier relationship management.
Technology investments are reshaping the procurement toolkit, with spend analytics, contract lifecycle management and e-procurement solutions leading the way. The adoption of generative AI is accelerating, particularly in areas like contract management and risk analysis.
Reviewing these reports, it’s clear that the success of procurement teams will hinge on their ability to embrace these technological advancements, prioritise sustainability and develop agile strategies to navigate an increasingly complex business environment.
Procurious: Next Level Procurement
According to the study of 137 procurement leaders globally, procurement’s future hinges on three pillars: tech adoption (especially AI), supplier collaboration and strategic agility.
As teams juggle cost pressures with ESG demands, the winners will be those using AI-powered platforms to automate grunt work and focus on big-picture value creation.
The report identifies that while 51 percent still prioritise cost reduction, teams are now steering corporate strategy, balancing sustainability with financial goals.
Over half (54 percent) are doubling down on ethical sourcing and 77 percent expect procurement to drive value creation across the business. 60 percent of respondents say suppliers are their top stakeholders with the aim of building collaborative partnerships that fuel innovation and ESG wins.
Half of procurement leaders plan to spend more time working directly with suppliers, especially as tariffs and geopolitical shifts force supply chain reshuffles, while 45 percent of teams are already testing generative AI for tasks like contract management (44 percent) and risk analysis (57 percent).
Elsewhere, 43 percent still hesitate about implementation, as early adopters report efficiency boosts – 63 percent say it’s supercharging productivity. As one exec put it “AI agents will fundamentally change how procurement pros spend their time.”
With 81 percent bracing for another ‘black swan’ event, resilience is non-negotiable. Top pressures include inflation (75 percent), sustainability regulations (63 percent) and talent gaps (58 percent).
Most teams (74 percent) have overhauled strategies recently, but only 19 percent adapt quickly to sudden changes. The report suggests that the fix is more agile systems and tech investments that enable real-time pivots.
Procureability: Future-Proofing Procurement
According to the report, procurement’s role in 2025 hinges on cross-functional collaboration, AI adoption and agile risk management. Teams that invest in upskilling, interoperable tech and sustainability frameworks will drive measurable ROI while future-proofing operations.
AI adoption is accelerating, with tools like contract clause analysis reducing cycle times by 30 percent. By 2027, 50 percent of organisations will use AI for supplier contract negotiations.
Cybersecurity threats rose 30 percent in 2024 which procurement and organisations must seek to balance.
Cost reduction targets are increasing according to the paper, with hard savings targets of seven to 10 percent which demand advanced strategies, including:
- Deploy should-cost modelling and game theory negotiations
- Collaborate with finance to define clear savings metrics
- Embed ESG practices across Tier 2/3 suppliers to unlock long-term value
Amazon: State of Procurement Data 2025
According to this study of over 3000 respondents – 2500+ procurement from all levels and 650+ remaining C-suite (non-procurement) – procurement’s evolution hinges on balancing cost efficiency with sustainability, technology and collaboration. By embedding data-driven decision-making and advocating for strategic influence, leaders can cement procurement’s role as a growth catalyst.
Procurement is now a growth driver, with 59 percent of teams expecting budget increases, yet only 46 percent of decision-makers feel fully included in strategic forums. 64 percent of leaders prioritise AI and analytics to streamline operations, yet adoption lags – 42 percent use AI for purchasing decisions (down five percent YoY).
Supplier challenges surged, with 19 percent citing inadequate digital support (up 10 percent YoY). 65 percent of leaders prioritise talent retention, emphasising skills in data analytics and strategic supplier management.
The report suggests some interesting actions for procurement leaders, including:
- Invest in AI-driven demand forecasting and spend analysis tools while upskilling teams to bridge the tech-talent gap
- Audit supplier capabilities and prioritise partners offering transparent communication, ESG compliance and real-time inventory visibility
- Develop rotational programs to integrate procurement with cross-functional teams, fostering strategic thinking
Hackett: Key Issues Study
This annual study, which is highly anticipated within the procurement community (at least by myself, anyway!), is put together both through a survey and discussions with a wide range of procurement leaders and also wider organisational leaders.
The future of procurement is digital, data-driven and strategically aligned. Start preparing now to lead the charge in 2025 and beyond specifically:
- Digital transformation is King: AI, automation and real-time data visibility are set to revolutionise procurement. Embrace these technologies to stay competitive
- Skills gap alert: The procurement skill set is evolving. Invest in upskilling your team in areas like digital proficiency, data analytics and sustainability
- Do more with less: Workloads are increasing, but budgets aren’t keeping pace. Leverage technology to boost productivity and efficiency
- GenAI is here: Early adopters are already seeing benefits. Explore embedded GenAI solutions in core procurement tools
- Operating model shake-up: Centralisation is on the rise. Consider dedicated teams for supplier relationship management and risk management
- Analytics maturity matters: Most teams are stuck in descriptive analytics. Push towards predictive and prescriptive capabilities, especially in spend analytics
- Sustainability takes centre stage: ESG reporting is a top priority. Ensure your team can deliver on this growing demand
Priorities
In terms of priorities, spend cost reduction remains the #1 priority as teams tackle economic uncertainty and inflationary pressures whilst supply continuity remains as the second priority driven by geopolitical disruptions and shifting trade relations to make securing supply chains a top focus.
Operating Model Transformation has risen to third place which reflects the need to adapt to AI, stakeholder expectations and process simplification, and driving a digital transformation is fifth.
Sustainability and ESG Integration driven by stakeholder demands for environmental and social accountability pushes sustainability to seventh place, up from ninth in 2024.
The report identifies several areas for improvement as well, in areas including:
- GenAI Implementation: Pilots in PO processing, spend analytics and CLM show early promise, but concerns around data quality (73 percent) and IP leakage (48 percent) persist
- Intelligent Automation: RPA and GenAI lead deployments, with predictive AI and agile orchestration emerging as high-investment areas
- Talent upskilling was identified as a critical area, as a growing skills gap in digital proficiency, analytics and sustainability demands targeted training programs. Only 21 percent of organisations have dedicated procurement talent teams
- Operating Model Shifts, with 69 percent of resources centralised, expected to rise to 71 percent by 2028 with dedicated teams building SRM, risk management and COEs for analytics and supplier diversity
- Analytics Maturity: whilst most teams rely on descriptive analytics, priority areas for growth should include predictive capabilities in spend analytics (56 percent plan upgrades) and prescriptive tools for ESG reporting
Technology
When we look at the technology investment areas we can draw some good insights:
60-74 percent of organisations already use end-to-end tools like spend analytics, CLM and e-sourcing with planned investments being:
- Spend analytics: 61 percent plan upgrades (highest priority)
- CLM: 54 percent aim to enhance contract lifecycle tools despite 30 percent of deployments underperforming expectations
- e-Procurement: 58 percent favour embedded GenAI solutions to streamline catalogue management
Emerging technologies identified include:
- Category management: 49 percent adoption with 37 percent planning upgrades
- Sustainability/ESG tools: 40 percent adoption but 43 percent report solutions fell short of goals
- Supplier collaboration: Low ROI (38 percent underperformance) driving re-evaluation of investment strategies
GenAI deployment:
- PO processing: 26 percent already implemented, 47 percent using embedded solutions
- Spend analytics: 20 percent deployed, with 45 percent opting for custom-developed tools
Investment focus:
- Predictive AI: 56 percent plan new investments despite 33 percent underperformance
- RPA: 50 percent adoption but limited expansion plans
The report identifies that organisations are doubling down on embedded GenAI for CLM/e-Procurement, custom analytics builds and centralised operating models. Success hinges on addressing data quality gaps while scaling pilots in high-impact areas like spend analytics and supplier risk.
RS/CIPS: 2025 Indirect Procurement Report
The 2025 Indirect Procurement Report, produced by RS and CIPS, reveals a challenging landscape for procurement professionals.
Inflation remains the top concern, with 62 percent of respondents identifying it as a major issue. Managing risk in the supply chain (47 percent) and global political uncertainty (37 percent) are also significant challenges.
The report highlights a growing focus on ESG initiatives, with 64 percent of respondents considering ESG important for company strategy. However, economic pressures have led to a decrease in willingness to pay premiums for sustainable products.
Procurement teams are adopting strategies to improve efficiency, including supplier consolidation and driving value through partnerships.
The use of digital procurement systems is increasing, with 62 percent of professionals now using e-Procurement or supplier punchout systems.
MRO spend has increased by 20 percent over the past year, reflecting a trend towards maintaining rather than replacing equipment.
The report also identifies areas for improvement, including a lack of knowledge about order processing costs and the need for better relationships with internal stakeholders.
Overall, the findings suggest that procurement professionals must balance cost pressures with sustainability goals while leveraging technology and strategic partnerships to drive efficiency.
Payments: Money Mobility Tracker
Cheque fraud remains a significant threat to businesses and consumers, causing substantial financial losses despite advancements in digital payment technologies. The report emphasises the critical need for businesses to transition from paper cheques to digital payment methods.
Despite security vulnerabilities, 68 percent of US companies still use cheques for B2B payments, accounting for nearly 40 percent of all US B2B payment volume. Nine in 10 bankers have experienced higher levels of cheque fraud in recent years, with 28 percent of banks noting an increase of more than 50 percent in the past three years.
Nearly 25 percent of small to mid-sized businesses (SMBs) fell victim to cheque fraud, compared to 15 percent of the general population.
Digital payments offer enhanced security features, including encryption, multi-factor authentication and real-time transaction monitoring powered by AI. These advanced systems significantly reduce fraud risks, lower processing costs and provide improved transaction visibility and operational efficiency. 77 percent of companies utilised instant payment technology in 2024, up from 62 percent the previous year.
Almost all respondents reported that digital treasury processes improved cash flow forecasting (97 percent), enhanced financial visibility and control (96 percent) and boosted profits (91 percent).
Beroe: Category Forecast 2025
This comprehensive report provides insights into key procurement categories for 2025, highlighting market trends, price forecasts and strategic recommendations.
Engineering & Construction:
- Global cement demand expected to increase by three to four percent in 2025
- Structural steel market projected to reach 253 MMT in 2025, with prices rising 10-14 percent in North America and Europe
- Modular construction market forecasted to hit $149.2 billion in 2025, growing 7.4 percent from 2024
Integrated Facilities Management:
- IFM services prices expected to increase four to five percent in 2025
- Key trends include focus on single-vendor partnerships, IoT integration and maintenance 4.0 adoption
Information Technology:
- IT services spending projected to grow seven to nine percent in 2025
- Enterprise software spending expected to increase 10-12 percent
- Managed security services spending forecasted to grow 12-15 percent
- Cloud computing costs predicted to rise five to nine percent across various services
- IT hardware prices expected to increase three to nine percent depending on the category
Labour:
- Global staffing industry revenue projected to reach $675 billion in 2025, growing six percent annually
- US temporary staffing market expected to hit $177.8 billion
- Salary increases forecasted at 3.9 percent in the US, 3.5 to four percent in EMEA and four to five percent in APAC
Logistics:
- Road freight operating costs expected to rise one to two percent in North America, Europe and Asia, but up to 30 percent in Latin America
- Driver wages and fuel remain primary cost elements in road freight
Key trends across categories include:
- Increasing adoption of AI and automation technologies
- Growing focus on sustainability and green initiatives
- Rising labour costs and skills shortages
- Geopolitical tensions impacting supply chains and pricing
- Regulatory changes affecting various industries
To navigate these challenges, procurement professionals should focus on:
- Diversifying supplier bases
- Investing in technology and data analytics
- Prioritising sustainability in sourcing decisions
- Developing flexible and resilient supply chain strategies
- Enhancing workforce skills and adopting innovative hiring practices
As we move into 2025, organisations must stay agile and informed to effectively manage costs, mitigate risks and capitalise on emerging opportunities across these critical procurement categories.
As always, reach out to discuss more. I’m happy to hear your thoughts!
