As modern supply chains grapple with continuous
economic and geopolitical disruptions, procurement
teams are identifying new ways to innovate, stay
resilient and drive long-term value beyond cost as
they reconfigure and align with the
broader organisation.
“ Proactive risk management
and mitigation has become the primary value
driver for leading procurement teams in 2024,
and the lens through which non-procurement
executives view the health of their
supply chains
”
Philip Ideson, founder, Art of Procurement
Economist Impact’s research gauges the confidence of
the C-suite in the procurement function and explores
how the function has changed over three years
(2022-2024). The research is centred around a survey
of 2,307 C-suite executives:
As businesses continue to navigate a challenging
risk environment,executives focus on managing a
range of risks key to the next 12-18 months
Top priorities
2024-25
Top priorities 2024-25
More than half (57%) of the C-suite cite
digitalisation as the top strategic
priority for their procurement teams in
the upcoming 12-18 months.
Drivers
-
The need to build real-time capabilities
to better address dynamic market
challenges and make existing procurement
processes more efficient.
-
The preference of data-driven insights
in strategic decision making that allows
for more actionable outputs.
Approximately 42% of C-suite executives
quote having sustainability/ESG as their
second top priority in the next
12-18 months.
Drivers
-
Both internal and external stakeholders
becoming more socially and
environmentally conscious and the
increased demand for transparency and
accountability as a result.
-
Compliance scrutiny and tighter
regulations around ESG requirements
coupled with the risk of monetary
penalties and restricted market access
in case of non-compliance.
Cost management as a focus area for
procurement teams was the third most cited
choice for over a third (34%) of the
C-suite in the short-term.
Drivers
-
Pressure on procurement teams to
identify cost savings and cost avoidance
opportunities to protect profit margins
given rising macroeconomic uncertainty
(eg inflation, rising
interest rates).
-
Cost management being a top performance
metric for the procurement function,
given that its biggest impact over the
last 3 years was on cost savings.
Top priorities
2027-29
Top priorities 2027-29
Over 40% of respondents plan to focus on
improving supplier diversity as a key
strategic area for their procurement teams
in the next 3-5 years.
Drivers
-
Organisations are trying to enhance
competitiveness by fostering innovation
and unlocking opportunities through
market expansion by diversifying the
supplier base.
-
Reducing single-sourcing dependencies to
mitigate against supply chain risks at
the time of disruption.
More than a third (37%) of the C-suite
continue to have sustainability/ESG as
their second top strategic priority for
the medium term.
Drivers
-
Renewed long-term focus on human rights
and sustainability which impacts brand
reputation, influences employee and
investor preferences and mitigates
against operational supply
chain disruptions.
-
The additional value-creation potential
of ESG initiatives through improved
profit margins and returns, going beyond
just reputational risks.
The third key focus area for procurement
teams over the next 3-5 years is
multisourcing, selected by nearly 35% of
the C-suite.
Drivers
-
Focus on risk reduction and building
supply chain resiliency amid growing
vulnerability to external threats (eg
geopolitical shifts, supplier threats,
liquidity risks).
-
Focus on building agility in the supply
chains while ensuring quality, speed and
optimal prices.
Find out more by downloading the briefing paper and
the infographic below:
C-suite leaders are moving towards technology
solutions that enable their procurement teams to be
more efficient, cost-effective, and risk-averse
than before.
Selecting up to two, which technology trends are you
looking to implement or evaluate in the next
12-18 months?
Procurement teams can support organisations in
realising their strategic goals and overcoming risks
through a more streamlined use of
emerging technologies.
In particular, the uptake of AI is expected to
improve the following procurement processes:
48
Procurement process automation
45
Optimisation and guidance
(eg enhanced user experience, scenario
planning, demand forecasting)
34
Productivity /skills gap
30
Sourcing
(eg category intelligence, autonomous
sourcing, ethical sourcing)
Find out more by downloading the briefing paper and
the infographic below:
