Welcome to the January 2026 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!
Several themes appear consistently this month. First up, AI adoption is widespread, but scaling remains elusive. Organisations are experimenting extensively, but struggling to achieve enterprise-level impact.
Second, internal barriers outweigh external challenges. Budget constraints, competing priorities and organisational change block progress more than market volatility or geopolitical disruption.
Third, supplier relationships require fundamental reframing. Suppliers deliver customer experience, indirectly employ the workforce and hold innovation potential. Treating them transactionally sacrifices competitive advantage.
Fourth, technology fragmentation undermines transformation. Excel dominates where purpose-built solutions should operate. Integration gaps prevent the visibility and automation organisations need.
And last but not least, workforce impacts demand attention now. AI will transform millions of jobs annually. Organisations that focus solely on layoff announcements miss the larger challenge of redesigning roles and building capabilities.
State of Flux: 2025 Global SRM Research Report
Supplier relationship management maturity continues to decline globally, according to State of Flux. Only six percent of organisations have mature supplier management capabilities, down from eight percent in 2023.
Researchers surveyed 484 respondents across 335 companies, revealing a concerning disconnect: CEOs spend just one percent of their time with suppliers, despite suppliers delivering 50 percent of customer touchpoints and employing more than half the workforce indirectly.
Organisations that achieve ‘customer of choice’ status with suppliers gain priority access to innovation, better pricing and improved service during disruptions. On this topic, 90 percent of ‘Leader’ organisations report that suppliers bring their best people when the relationship is strong. Meanwhile, 81 percent of Leaders engage in joint account planning, compared to only 17 percent of ‘Followers’.
The primary barriers to SRM progress remain internal: competing business priorities, organisational change and budget constraints outweigh external challenges.
Technology remains fragmented, with 87 percent of organisations relying on Excel or Office tools to manage suppliers. Only 10 percent of Leaders have tools prioritising value and innovation creation.
The report argues procurement must reframe conversations from efficiency to enterprise value.
Suppliers are brand ambassadors who directly influence customer experience. Treating them as transactional vendors undermines competitive advantage. Investment priorities should include purpose-built SRM technology, capability building for supplier-facing roles and governance models embedding SRM into business rhythms.
McKinsey: State of AI 2025
According to the McKinsey report, AI adoption is nearly universal, with 88 percent of organisations using AI in at least one business function, yet most remain stuck in experimentation.
Only 32 percent have begun scaling AI across the enterprise. The gap between adoption and impact persists, with just 39 percent reporting EBIT impact at the enterprise level.
AI agents have emerged as a significant focus area. 62 percent of respondents are experimenting with agents, and 23 percent are scaling agentic systems somewhere in the enterprise.
The technology, media, telecommunications and healthcare sectors lead agent adoption, with IT, knowledge management and software engineering functions showing the highest scaling rates.
High performers differentiate themselves through ambition. They are 3.6x more likely to pursue transformative business change with AI than incremental efficiency gains. They fundamentally redesign workflows, achieving a 2.8x higher workflow transformation rate than peers. They invest over 20 percent of digital budgets in AI, compared to 10 percent for average organisations.
Elsewhere, workforce impacts vary. 32 percent of respondents expect workforce decreases from AI in the next year, while 43 percent expect no change and 13 percent expect increases. Larger companies are more likely to anticipate workforce reductions. Each year, AI will significantly transform 32 million jobs, requiring upskilling or complete role redesign.
Gartner
RPA Relevance in the AI Era
RPA remains the optimal solution for rule-based processes involving high volumes of structured data. AI and intelligent automation suit complex, dynamic or unstructured tasks, but require higher investment, strong data quality and organisational readiness.
The report maps specific RPA use cases across source-to-pay processes. Sourcing benefits from automated request monitoring via standardised email forms. Contract management gains from data cleansing and expiry monitoring. Supplier management improves through automated documentation requests and pricing updates. Procure-to-pay functions benefit from requisition validation, purchase order maintenance and three-way matching automation.
AI is enhancing RPA rather than replacing it. New capabilities include reduced bot development timelines, improved exception handling and self-healing bots. Organisations should monitor RPA performance continuously and reassess automation strategies as AI matures.
The recommendation is clear: use RPA for high-volume repetitive tasks, delivering immediate gains while selectively deploying AI where it provides strategic value.
AI and Jobs Report
AI will create more jobs than it eliminates beginning in 2028-2029. However, 32 million jobs will transform significantly each year. Daily, 150,000 jobs will evolve through upskilling, while 70,000 will require a complete redesign. Job transformation demands 20 times more organisational effort than layoffs or hiring.
Industry impacts vary dramatically. The technology sector faces the most severe disruption, but represents less than two percent of the global workforce. Asset-intensive industries show lower AI exposure due to physical work requirements. Services and public sectors will experience more job losses than gains due to weak adaptability despite high automation pressure.
The analysis reveals critical nuances. Less than one percent of announced layoffs in early 2025 were attributable to AI productivity gains. 79 percent had no AI connection whatsoever.
Acting on layoff hype will create strategic errors. Financial services and public sector organisations will face severe skills shortages as expectations outpace feasibility.
Top AI Strategic Predictions 2026 and Beyond
By 2027, 75 percent of hiring processes will require AI proficiency testing. Half of the gains in GenAI performance depend on prompt quality. Job postings mentioning AI skills command 28 percent salary premiums.
Organisations should immediately integrate AI proficiency assessments into their talent management.
Critical thinking skill atrophy will force 50 percent of organisations to require AI-free assessments through 2026. Overreliance on AI degrades inherent abilities. Staff at the beginning of their careers face the highest risk, skipping validation steps that build cognitive capabilities.
By 2028, 90 percent of B2B buying will be AI-agent-intermediated, affecting over $15 trillion in spend. Multi-agent AI systems will dominate customer-facing processes. Organisations must shift from optimising for human persuasion to enabling autonomous agent interaction. Verifiable operational data becomes essential currency in this new ecosystem.
WorldCC: Benchmark Report 2025
This year’s report identifies that 87 percent of organisations face high uncertainty levels, yet contracting capability remains neglected. 88 percent of executives acknowledge contract management excellence matters, but a massive gap separates recognition from action. Only 10 percent execute successfully on improvement plans, while 50 percent struggle to formulate any response.
Almost half of respondents (48 percent) acknowledge that no clarity exists over who owns contracting process quality. Analysis reveals the true figure is 70-80 percent. Contract management suffers from superficial shared responsibility without genuine ownership. The report states that this governance failure undermines all other improvement efforts. Buy-side organisations operate with greater rigidity; processes designed for compliance rather than flexibility.
AI adoption accelerates. 40 percent of organisations use AI in approved forms, with 23 percent under review. High-performing organisations show 80 percent interest in AI and machine learning versus 57 percent for those with less integrated processes. The Global Contract Management Standard, launched June 2025, offers a framework for sustained improvement.
Sphera: Geopolitical Disruption Survey
A study of over 200 global CSCO and CPOs identified that 95 percent of CPOs and CSCOs express concern about geopolitical instability impacting supply chains in the next 12-24 months. 64 percent are very concerned.
Macroeconomic volatility follows closely at 95.5 percent concern. Regulatory uncertainty affects 88.5 percent and supplier financial health concerns 88 percent. Geopolitical tensions represent the single most disruptive risk for 35.5 percent of respondents, followed by macroeconomic instability at 24.5 percent.
Organisations are responding with geographic supplier diversification (52.5 percent already implemented), nearshoring production (40 percent completed) and increased inventory buffers (55.5 percent in place).
Barriers to resilience remain substantial. 55 percent cite supplier engagement challenges, 50 percent report budget constraints and ROI justification difficulties, 45 percent lack accurate supply chain data and 39 percent have limited visibility beyond Tier 1 suppliers. Only 10 percent report no current barriers.
Investment priorities for the next 12-18 months focus on tariff and trade uncertainty (27 percent of resources), geopolitical disruption (25 percent), regulatory compliance (23 percent) and climate-related risks (19 percent).
Organisations relocating supply chains cite geopolitical instability (26 percent), tariffs (26 percent), macroeconomic volatility (18 percent) and regulatory uncertainty (15 percent) as primary drivers.
Economist Impact: Enterprise AI Blueprint
This Economist Impact article states that business leaders face a troubling disconnect. Executives from 57 percent of S&P 500 companies discussed AI during Q4 2025 earnings calls, yet only 10 percent of employees have used AI in recent weeks.
Erik Brynjolfsson, Director of the Digital Economy Lab at Stanford University, offers four critical recommendations for closing this gap.
Organisations must first acknowledge the productivity J-curve. AI requires substantial complementary investments in restructured workflows, employee skills and new processes. These supporting investments can significantly exceed actual AI technology spending. Returns will not appear immediately. Input costs surge before output materialises, creating temporary productivity declines.
Brynjolfsson notes that electrification only delivered productivity gains after factories were redesigned around distributed motors, a transformation spanning nearly three decades.
AI’s J-curve may be shorter because the technology can sometimes address its own implementation challenges.
Brynjolfsson advises structuring work around tasks rather than job titles and using AI to amplify human judgment rather than replace it. The largest gains flow to organisations building centaur teams where humans and AI learn from one another and leaders measure results rigorously.
One Stanford study of 5,172 customer support agents found AI assistance increased productivity by 15 percent on average, with the largest improvements among less experienced workers who benefited from AI capturing best practices of top performers.
MHI: Top Supply Chain Trends of 2026
MHI has released its annual forecast of forces shaping supply chain operations. The 2026 report identifies nine critical priorities that reflect a shift from reactive fixes to proactive preparation.
These nine trends share a common thread. Successful supply chains require technology adoption, proactive risk management and cross-functional collaboration.
The first trend is workforce and talent gap. AI and automation require tech-savvy professionals, prompting organisations to invest heavily in re-skilling programs and workplace cultures that foster innovation. Talent shortages directly limit the pace at which companies can adopt new technologies.
Artificial intelligence and real-time data form the second priority. Generative AI and predictive analytics have moved from optional to essential. Companies use these tools for demand forecasting, supplier evaluation and real-time decision-making to improve customer service. AI-driven decision-making will become mainstream in 2026.
Automation and emerging technology rank third. Robotics and automated systems build flexible operations that counter workforce shortages and sudden demand shifts. According to MHI data, 41 percent of supply chain organisations have already adopted robotics and automation, with another 42 percent planning adoption within five years.
Trade and tariffs rank fourth. Shifting geopolitics force companies to rethink sourcing by diversifying suppliers and reshoring work to reduce risk exposure.
Uncertainty, inflation and rising costs represent the fifth trend. Economic volatility delays some deals while accelerating others as companies hedge against price increases.
Cybersecurity and risk management rank sixth. Greater connectivity expands cyber threat exposure. Companies are building stronger cybersecurity frameworks and deepening supplier relationships to collaboratively protect data. Forbes survey data shows 38 percent of supply chain leaders perceive cyber threats as significant.
E-commerce and inventory pressures come seventh. Customer expectations shifted rapidly. Inventory visibility, accurate forecasting, faster logistics and tighter quality control are now essential.
Agility and resiliency form the eighth trend. Agile supply chains use technology to adjust quickly when challenges arise. Digital transformation, cross-team collaboration and detailed contingency planning anchor rapid recovery strategies.
Environmental sustainability closes the list. Electric vehicles, route optimisation and local fulfilment centres cut emissions and costs. However, AI’s growing energy and water consumption create tension with environmental goals.
Art of Procurement & McKinsey: ProcureTech100 2025/6
The ProcureTech100 Yearbook is a practitioner‑led benchmark for the 100 most impactful digital solutions reshaping procurement, rather than another pay‑to‑play ranking. It highlights a market in rapid convergence, where category boundaries between sourcing, CLM, analytics, S2P, risk, sustainability and SRM are blurring into composable, AI‑enabled ecosystems.
As part of the yearbook, there were a number of roundtables and some key trends emerged:
- Category convergence and the rise of connected S2P stacks demand a deliberate architecture, not opportunistic tool buying. Tech strategies now need to define what is “platform”, what is “specialist” and how data and workflows are orchestrated end‑to‑end
- “Real‑world AI” and agentic systems shift the focus from experimentation to measurable outcomes – productivity, risk, speed and experience – with McKinsey suggesting a potential 20x productivity uplift where agent factories are properly designed
- Connected intelligence and embedded analytics move insight from after‑the‑fact reporting into the flow of work (sourcing, contracting, supplier discussions), making data quality and governance a board‑level concern, not a clean‑up exercise
- CLM is being reimagined around meaning and trust, with modular, AI‑enabled tools for clause analysis, deviation detection and obligation tracking, changing how legal and procurement partners
- Human‑centred procurement, hybrid operating models and orchestrated ecosystems underline that tech alone will not deliver; process design, skills and operating models are now as strategic as category strategies
Gartner: Predicts 2026
Five predictions emerged from Gartner:
- Data/process maturity
- Real‑time supplier evaluation
- Multitier visibility
- AI‑driven roles
- Orchestration
Through 2027, only about 20 percent of procurement organisations will have the data and process maturity to really exploit multi‑agent systems – and they will gain a clear competitive edge.
Poor data quality, fragmented processes and legacy tech are identified as the primary drag on agentic AI, not algorithms.
By 2028, 20 percent of teams are expected to use AI to continuously evaluate suppliers in real time, doubling coverage and extending metrics into collaboration, innovation and sustainability, using unstructured data from emails, chats and tickets.
By 2029, regulation and technology will push 40 percent of organisations to tier‑3 visibility, making supply‑chain transparency a licence‑to‑operate issue rather than a “nice to have”.
Looking out to 2030, Gartner expects roughly 20 percent of procurement professionals to be in new AI‑driven roles, and AI to orchestrate procurement in 30 percent of organisations – routing work between humans and agents based on strengths, context and risk.
The Hackett Group: 2026 Procurement Agenda and Key Issues Study
Hackett’s 2026 study captures how senior procurement leaders are setting priorities in an uncertain macro environment.
The 2026 “top 10” is led by ensuring supply continuity, improving spend cost reduction, deploying AI‑enabled technology and transforming the operating model. Digital transformation, third‑party risk visibility, agility, analytics and organisational velocity complete the list.
Workload is expected to rise by about eight percent in 2026 while FTEs and operating budgets fall slightly, creating productivity and efficiency gaps of around nine percent and eight percent, respectively – gaps leaders clearly expect technology (with tech spend up by around 6.1 percent) and AI to close.
Savings expectations have moderated: more organisations now expect flat purchase-cost reductions and cost‑avoidance performance compared with 2025, even though a significant share still targets increases.
The top value levers remain very traditional: supplier negotiation, strategic sourcing, category management, contract review and demand management – highlighting that AI is being layered onto, not replacing, core commercial disciplines.
Technology adoption is already high across S2P suites, analytics, CLM and e‑sourcing, with further investment planned in spend analytics, CLM, e‑sourcing, advanced analytics and supplier performance management.
Almost three-quarters (71 percent) of respondents report some level of GenAI adoption and 56 percent for agentic AI (mostly in pilot stages), with the strongest reported benefits in cycle‑time reduction, productivity and quality. Value from FTE reduction and spend savings is emerging but less mature.
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