Why 2025 is Already the Year of Procurement Orchestration
Procurement orchestration is set to take centre stage in 2025, with its rapidly evolving tools and strategies poised to reshape procurement operations worldwide. The concept, which involves harmonising purchasing processes and integrating advanced technologies, is driving significant innovation across industries.
A new wave of companies are already emerging as leaders in this transformation. These innovators are using sophisticated technologies and novel approaches to streamline processes, improve collaboration and enhance efficiency at every stage of procurement. With increasingly complex supply chains and a growing demand for agility, procurement orchestration is becoming essential for businesses aiming to remain competitive in the global market.
Zip: Leading the charge
Zip has emerged as one of the companies at the heart of this orchestration drive – and is even referred to by some as the company which brought it to the mainstream. It was named a Leader in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Spend Orchestration 2024 Vendor Assessment published in September.
2024 was a landmark year for Zip, as it established procurement orchestration as a critical capability for the modern enterprise. Over the course of the last 12 months, the platform processed more than US$107bn in spend across a vast pool of suppliers surpassing more than four million.
HP, AMD and Anthropic are just some of the major players successfully streamlining their operations and driving measurable results thanks to Zip and its world-leading orchestration capabilities.
So, what does 2025 have in store for Zip and the wider topic of orchestration?
Nick Heinzmann, Head of Research at ZIP, spoke to Procurement Magazine on why 2025 is already the year of procurement orchestration.
How will AI-driven procurement orchestration transform supply chain operations and decision-making in 2025?
AI-driven procurement orchestration will change the way procurement relates to and is perceived by stakeholders. The usual perception of procurement as an order taker or a roadblock will give way to a more touchless, empathetic experience that helps stakeholders get the best experience from procurement.
Orchestration will connect all of the disparate applications and tasks in the procurement process into one seamless experience and AI will enhance that experience to make it not only intuitive but also intelligent.
No longer will stakeholders have to ask, ‘what exactly is a commodity code?’ or ‘how exactly do we define personally identifying information?’. AI will become a virtual procurement assistant that guides stakeholders through a seamless orchestrated experience.
How will intake and orchestration technologies change procurement processes?
The procurement operating model will shift from insular and siloed category professionals to one where procurement staff are focused on business partnering and embedding team members in other partner business functions.
According to Hackett, we will see a shift to building “spend orchestration teams” that focus on overall procurement process design and stakeholder experience measurement. The focus on experience will be new for procurement, with areas like internal customer CSAT becoming the new North Star for CPOs.
Intake and orchestration will also “democratise” the procurement process to make it more accessible, more transparent and, in some cases, more stakeholder-led, giving stakeholders autonomy for appropriate scenarios while maintaining procurement oversight and auditability.
How will AI enhance risk management in procurement orchestration?
Orchestration and agentic AI will merge to create a new kind of risk management solution.
AI needs good data to act upon, but much of this data sits outside of the company with specialist data providers.
Orchestration will enable the consolidation and centralised analysis of many third-party data sources and then the ability to action those insights in the workflows or connected systems tied together by orchestration.
This is a perfect use case for agentic AI – providing a trigger, like a risk event, a regulation change, that can cause AI to gather information, for example, find risk provisions in a contract, start a remediation, e.g. schedule meeting with supplier, kick off a dispute resolution workflow and track completion or remediation of the risk.
Orchestration feeds AI and vice versa, creating a symbiotic relationship that improves procurement's ability to respond to and mitigate risks.
What strategic capabilities will procurement orchestration develop by 2025?
Orchestration providers started out as "point" solutions that addressed the gaps in legacy S2P suites around user experience, data integration and configurability.
By 2025, however, orchestration providers will have expanded to be able to orchestrate the true end-to-end procurement process – not just intake but truly running and adding value to any process.
Contracting is a great example. Contracts run through many different stakeholders and systems and involve a lot of complexity and risk. Capturing the full process from the request for a contract through the drafting, risk review, execution and even monitoring of the provisions in the contract after the fact is a highly cross-functional effort. Orchestration not only ties all of that together, but a mature provider can layer AI on top to offer risk analysis, automate approvals and manage the renewal/disposition of a contract.
Orchestration is becoming the operating system (a true platform) to enable procurement transformation efforts.
How will generative AI impact procurement orchestration implementation?
Gen AI will specifically make implementation faster and smoother. Faster because it will slash the amount of time it takes to get a new company's data into the system, uploading contracts with extracted metadata, helping configure new sourcing events or workflows faster. Smoother because it will create a much more intuitive user experience for stakeholders and procurement users that effectively replaces the concept of change management.
Zip uses AI to enhance the training and help centre experience. You can expect the death of the dreaded 100-page PDF guide filled with red arrows and laundry lists of instructions of where to click.
Today, you can just describe what you want to do or ask a question to an AI and the application will solve the issue for you. Implementation can thus go much faster and companies can ensure their investment with guaranteed adoption.
What role will predictive analytics play in procurement orchestration?
As procurement orchestration gathers more data on the processes it unifies, it will have the foundation to create predictive recommendations on how to make the process faster, what steps in the process could be automated and where to find new savings opportunities.
The role will be instrumental in the future. In order to prevent procurement orchestration from being just another "empty app" layer on top of other applications, it needs to become more intelligent and insightful about what happens across your tech stack. Orchestration will then become more than an "experience" layer and instead a true operating system for procurement.
Will 2025 be the year of procurement orchestration?
2025 already is the year of procurement orchestration, because this entire decade is the orchestration decade. We are seeing a shift entirely from procuretech 2.0 to procuretech 3.0. This is not an isolated annual trend; it’s a movement and an evolution from legacy technologies.
To read the full article in the magazine, click HERE.
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