Fueled by a combination of geopolitical tension, economic instability, and significant supply chain shifts, procurement has taken on increasing importance. Procurement has evolved from a function focused primarily on cost-cutting to one that drives value creation and manages global risk. As a result, today’s organizations are forced to reevaluate how they operate, transforming procurement from a back-office function into a vital strategic partner.
In a broad study sponsored by SAP, Economist Impact highlights this continuing shift in perception and performance, revealing a rising confidence in procurement’s ability to make business impact. This is the fourth consecutive year that SAP and Economist Impact have partnered on a study, and the survey includes responses from more than 2,000 C-suite leaders globally.
The report, titled “The Resilient Edge: Procurement in an Era of Polycrisis,” also underscores procurement’s growing influence in advancing AI adoption and sustainability performance. However, the field still faces obstacles in assuming this larger role, including readiness for technology and building a future-proof workforce.
Still, the overall trend is clear: procurement’s fundamental transformation is putting it in a position to play an important role in business strategy.
Growing confidence in procurement to drive strategic value
Businesses today face a convergence of crises—a “polycrisis”—which includes environmental shocks, shipping delays, and growing regulatory restrictions. Tariffs are the latest disruption, prompting businesses across sectors to seek quick solutions to avoid price hikes.
Weathering this storm requires procurement leaders to take on higher risk as they navigate this uncertainty. The Economist Impact report finds that geopolitical risk has emerged as the top concern for procurement leaders, with 64% listing it as their top focus over the next 12 to 18 months, up from just 30% in 2024. This surge reflects both the growing complexity of global operations and procurement’s expanding influence.
As risk becomes more multifaceted and severe, procurement professionals have a role beyond sourcing supplies at the lowest cost. Instead, they are developing robust strategies to identify, assess, and mitigate risk. This strategic pivot is also reflected in growing cross-departmental trust. In fact, 78% of respondents expressed confidence in procurement’s ability to manage external risk—a 37% increase from last year—signaling procurement’s growing value as a strategic partner.
AI has a central role in procurement
From detecting demand signals and enabling scenario planning to automating routine workflows, AI is dramatically expanding procurement’s capabilities.
The Economist Impact report notes that organizations are prioritizing AI proficiency more than any other skill over the next 12 to 18 months, including predictive analytics, demand forecasting, and managing data bias and privacy concerns. These skills are essential for procurement teams that need to pivot quickly in response to unexpected disruptions.
Most importantly, AI will be at the center of procurement’s continued transformation. An overwhelming 89% of respondents in the study said they are confident in their ability to adopt and apply AI to improve efficiency and productivity. This confidence is grounded in tangible benefits that AI can provide, including identifying early demand signals, optimizing supplier performance, and simulating risk scenarios to support better decision-making
Simply put, AI is no longer optional—it is essential to procurement success and relevance.
Improved environmental results
Sustainability has climbed to the top of corporate agendas, and procurement is now on the front lines of this effort, managing supplier emissions and ensuring ethical labor practices. Over half (53%) of survey respondents named sustainability as their top strategic priority for the next 12 to 18 months.
Cross-departmental collaboration is central to these efforts and has enabled procurement to align with key financial and environmental goals. Tools like ESG scorecards and supplier decarbonization plans are now standard practice for measuring environmental impact. These innovations are helping companies meet rising expectations from customers, regulators, and shareholders alike, while also reducing long-term operational risks.
These developments show that procurement isn’t just supporting sustainability—it’s driving it.
Procurement’s inflection point between strategy and cost-cutting
While cost control remains a key part of procurement’s mandate, the balance for today’s procurement teams is shifting—from tactical cost-saving measures to strategic contributions that enhance agility, foster innovation, and safeguard reputation.
To manage these dual demands, companies are turning to procurement technology, like SAP Ariba Procurement solutions, to address key priorities and reduce siloes across the organization.
On June 26, Etosha Thurman, SAP’s Chief Marketing Officer for Finance and Spend, will join Economist Impact’s webinar “Measuring up: Balancing risks and goals for strategic procurement” to explore how organizations can build procurement strategies that drive measurable outcomes. This event will explore how procurement can balance immediate pressures with long-term objectives—a topic that is more relevant now than ever. If interested, register here.
Gordon Donovan is global vice president of Research, Procurement, and External Workforce at SAP.
