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 July’s global procurement research. Save your own time reading research when you can get the key takeaways in one place!
Procurement leaders in 2025 face unprecedented volatility from tariffs, global trade disruptions and supply chain complexity, driving a 30 percent surge in strategic workload across procurement, finance and supply chain functions.
Organisations are responding by leveraging advanced analytics, AI and scenario planning to build resilience and agility, with AI-powered tools automating routine tasks and enabling dynamic risk assessment.
Recent studies reveal procurement’s rising influence: 85 percent of CPOs report increased significance, yet only 46 percent are proactive at the executive level, highlighting the need for deeper strategic integration.
“Impact leaders” in procurement – teams that are both proactive and influential – drive higher revenue growth and innovation, moving beyond cost savings to shape pricing, supply chain efficiency and supplier-led innovation. However, talent gaps, especially in digital skills, remain a primary barrier to realising procurement’s full value.
Automation and AI adoption are accelerating, with investment priorities shifting toward staff development and digital technology. Yet, supplier diversification and robust contingency planning lag, exposing organisations to risk.
Effective cost management now hinges on scenario planning, data-driven decision-making and embedding a cost-conscious culture, positioning procurement as a strategic partner in navigating ongoing uncertainty and disruption.
Inverto: CPO Study
The 2025 Inverto CPO Survey, featuring 335 CPOs and procurement leaders from across Europe, identifies the traits of “impact leaders” and offers actionable insights for procurement professionals seeking to elevate their influence and value within their organisations.
Key findings include:
85 percent of respondents report that procurement has gained significance within their organisations over the past five years. However, only 46 percent of teams describe themselves as proactive in identifying value sources at the executive committee (EXCOM) level, indicating room for further strategic integration.
The survey defines “impact leaders” as procurement teams that are both proactive and increasingly influential. These teams are linked to an average of +2 percent higher revenue growth compared to their peers. They move beyond cost savings, contributing directly to pricing strategies, supply chain efficiency and innovation.
While cost savings (recurring and avoidance) remain the top KPIs (48 percent and 45 percent, respectively), impact leaders also measure company-wide metrics such as revenue, margin growth and EBITDA impact. This broader measurement approach helps secure procurement’s seat at the boardroom table.
Innovation ranks as the second most critical challenge for companies. Impact leaders prioritise supplier-led innovation, market screening and cross-functional collaboration. For large organisations, 38 percent of product and service innovation is supplier-driven, underscoring the importance of strategic supplier partnerships.
Supply chain disruption remains a top concern. Impact leaders excel by diversifying supplier bases, investing in skills procurement and leveraging digital tools for supply chain monitoring and predictive analytics. Nearshoring and dual sourcing are increasingly adopted to boost resilience.
People and skills are cited as the primary barrier to procurement value realisation (48 percent). There is a significant gap in non-core procurement expertise and digital skills.
While digitalisation and AI are top priorities, only 31 percent of companies leverage digital tools for sustainability, and a quarter have not considered GenAI implementation. Data quality and integration remain key challenges.
CIPS: Procurement Study
According to this report, procurement and supply chain professionals are gaining unprecedented influence in their organisations.
A quarter of CPOs or senior procurement leaders now have a permanent seat on the main board, up from one-fifth last year. This trend signals a growing recognition of procurement’s strategic value in navigating global volatility and supply chain risk.
The majority of procurement functions are at least partly automated, and 83 percent of respondents believe automation will drive greater operational efficiency.
AI has moved from experimentation to practical application, helping organisations manage risk, forecast tariff exposure, optimise flows and renegotiate supplier terms.
Investment priorities are shifting: staff development/training (60 percent) and digital technology (59 percent) top the list, with AI investment rising to 44 percent (up from 35 percent last year), while sustainability initiatives have dropped to 54 percent (down from 69 percent).
The top skills procurement leaders want to develop are strategic thinking (47 percent), leadership (45 percent) and influencing (43 percent).
Procurement professionals are on high alert due to geopolitical instability, trade wars and tariffs. The report highlights a record level of anxiety about the next 12 months, with the ability to act decisively – especially through AI-powered, data-driven systems – becoming a key differentiator.
The profession is expected to do more with less: while 34 percent of procurement teams grew in headcount last year, 23 percent expect further growth in the next 12 months, mainly to add value and manage increased workloads. However, functions remain lean, with 42 percent of teams having 10 or fewer members.
The perception of procurement is improving: 36 percent say it is a trusted business partner embedded in decisions, while 54 percent see it as positively influencing spend efficacy (though sometimes viewed as a blocker to implementation).
APQC: Supply Chain Resilience
APQC’s report into supply chain resilience, with over 500 global respondents, found that most organisations can only shift about 30 percent of their active supplier spend to backup, pre-qualified suppliers if their primary supplier becomes unavailable.
Even top performers can only reallocate 38 percent, highlighting a significant reliance on single suppliers and room for improvement in supplier diversification.
While 77 percent of companies have moderately to highly complex multi-sourcing strategies, only 38 percent deploy the most advanced, tiered approaches across their full bill of materials.
A notable 22 percent still lack comprehensive multi-sourcing or recovery strategies, exposing them to higher risk during disruptions.
91 percent of organisations use purchasing postponement, delaying component or raw material purchases until demand is clearer. Many also use logistics/distribution postponement (67 percent) and manufacturing postponement (61 percent), allowing for greater responsiveness to demand and reduced risk of overstock or obsolescence.
Nearly all organisations (99 percent) have a crisis management team, but only 54 percent have a formal contingency playbook. Just 13 percent maintain a dynamic playbook with risk and resilience embedded across all functions, which is critical for effective response to crises.
Gartner: Cost Management Playbook
The Gartner 2025 Chief Procurement Officer (CPO) Cost Management Playbook and related research highlight the strategies, challenges and opportunities procurement leaders must address to deliver value in this environment.
Key takeaways include:
Six Critical Components of Effective Cost Management Scenario Planning: CPOs must prepare for uncertainty by building scenario plans and defining triggers to adapt quickly as market conditions change
Data-Driven Decision Making: Allocating time and resources for robust data collection and analysis is essential. Data insights enable procurement teams to anticipate cost shifts and inform smarter decisions
Uncovering Untapped Savings: Leveraging databases and advanced analytics helps identify unexplored cost-saving opportunities across categories
Reducing Cost to Serve: Analysing internal processes to identify inefficiencies that drive up supplier costs can lead to better negotiations and lower prices
Aligning Trade-Offs: Proactively clarifying trade-offs between cost, speed and risk ensures alignment with broader business objectives and margin protection
Embedding a Cost-Conscious Culture: Establishing cost discipline in daily decisions and rewarding teams for measurable savings fosters an organisation-wide focus on value.
As always, reach out to discuss more. I’m always happy to hear your thoughts!
