Due to the mixture of geopolitical tensions, economic instability and clear supply chain shifts, the procurement has become increasingly important. While she used to mainly aim at cost reductions, she has now developed into a department that drives value creation and controls global risks. As a result, companies are now forced to rethink their ways of working and transform the procurement department – from a supportive department in the background to an important strategic partner.
One Comprehensive study sponsored by SAP The Think Tank Economist Impact underlines that the perception of procurement changes and shows that trust in the ability of the department to contribute to business success grows steadily. The fourth year in a row, SAP and Economist Impact have already worked together on a study. The survey is based on a worldwide survey of more than 2,000 managers at the top management level.
In the report entitled “The Resilient Edge: Procurement in an era of polycrisis”, it is emphasized that the procurement department has more and more influence when it comes to promoting artificial intelligence and achieving sustainability goals. However, the area continues to be faced with obstacles when it comes to greater influence, because it has to be ready to use new technologies and has to prepare employees for the future.
The general trend is still clear: Since the procurement is subjected to a fundamental change, it now plays an important role in the corporate strategy.
Growing trust helps procurement to strategic value
Today, companies have to be faced with several crises that occur at the same time and influence each other. The so -called “poly crisis” includes environmental shocks, transport delays and increasingly extensive regulatory requirements. Customs have recently caused economic disorders that have prompted companies in all industries to find quick solutions to avoid price increases.
In order to master the handling of these uncertainties, managers must take higher risks in procurement. According to Economist Impact’s study, the geopolitical risk is the greatest concern of all managers in procurement. For 64 percent of those surveyed, this topic comes first in the next 12 to 18 months. In 2024 it was just 30 percent. This increase is due to the growing complexity of global processes and the increasing influence of procurement.
Since the risks are becoming more and more complex and higher, procurement experts take on a role that goes beyond the pure cost reduction in material procurement. Instead, they develop robust strategies for identifying, evaluating and reducing these risks. This strategic realignment is also reflected in the growing cross -departmental trust. 78 percent of the respondents stated that they have trusted the ability of the procurement department to cope with external risks – and thus signaled the increasing value of procurement as a strategic partner.
AI is of central importance in procurement
From the processing of demand signals to the activation of scenario management to automation routine workflows – with AI, the possibilities of procurement can be significantly expanded.
Economist Impact’s report points out that companies will give significantly higher priority in the next 12 to 18 months of AI competence than any other qualification. And this competence also includes the implementation of forward -looking analyzes and forecasts and the handling of data distortion (data bias) and data protection concerns. These skills are essential for procurement teams because they have to react quickly to unexpected disorders.
Above all, however, AI will be of central importance in the continuous transformation in the procurement. An overwhelming majority of 89 percent of those surveyed are confident that the introduction and targeted use of AI will enable them to increase both efficiency and productivity in their company. This trust is based on specific advantages that AI can offer. This includes, among other things, the early detection of demand signals, the optimization of supplier performance and the simulation of different risk scenarios. They all lead to better decision making.
Simply put: AI is no longer just an option, but crucial for the meaning and success of the procurement system.
Better results in environmental impacts
The topic of sustainability is now on the agenda for companies. The procurement departments play a central role here, since they are responsible for checking the emissions of the suppliers and ensuring compliance with ethical labor practices. More than half (53 percent) of the respondents mentioned sustainability as the top strategic priority for the next 12 to 18 months.
Cross -departmental cooperation is of central importance here. The procurement departments succeed through them to focus on the most important financial and ecological goals of the company. Tools such as ESG scorecards and decarbonization plans for suppliers are now common practice and are used to measure environmental effects. These innovations help companies to meet increasing expectations of customers, supervisory authorities and shareholders and at the same time reduce long -term operational risks.
The developments described show that the procurement departments not only support sustainability, but also promote.
Procurement at the turning point: From cost savings to strategic value contributions
The cost control remains a core task of procurement, but the focus of today’s procurement team is moving – from tactical measures to reduce costs to strategic value contributions that help to increase flexibility, promote innovations and strengthen the company’s reputation.
In order to meet these double requirements, companies rely on procurement technologies such as the Procurement solutions from SAP Ariba. These make it possible to implement important priorities and at the same time to reduce silos throughout the company.
On June 26th, Etosha Thurman, Chief Marketing Officer for Finance and Spend Management at SAP, took part in a webinar by Economist Impact. In the event entitled “Measuring Up: Balancing Risk and Goals for Strategic Procurement”, it was discussed how companies can develop effective procurement strategies that lead to measurable results. In addition, the question of how the procurement can be achieved was to reconcile the pressure to achieve results directly with the long -term objectives – a topic that is more important than ever today. If you are interested in the topic, take a look Here is the video.
Gordon Donovan is Global Vice President of Research, Procurement, and External Workforce at SAP.
