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:
