EY: Is Procurement Still the Untapped Lever for Growth?
Chief Procurement Officers (CPOs) are at the forefront of navigating a modern-day landscape marked by technological innovation, geopolitical shifts and rising ESG standards.
The meeting of these factors offers both challenges and opportunities, underpinning the vital importance of strategic third-party collaborations and cutting-edge procurement capabilities in a post-COVID-19 era.
EY anticipates that organisations will continue to invest in and transform procurement, using it as an "untapped lever" to help impact top-line growth, while creating margin expansion by utilising digital tools, revised organisational design and enhanced supplier oversight capabilities.
EY's Global CPO Survey 2025
EY's study, which surveyed Chief Procurement Officers based around the world, reveals the following key statistics:
- 80%: The proportion of CPOs planning to harness the use of generative artificial intelligence (Gen AI) in some capacity over the next three years to accelerate what teams can deliver, with a near-term focus in spend analytics and insights along with enhanced contract management. As it stands, only 36% of CPOs have Gen AI deployed in a meaningful manner.
- 64%: The percentage of procurement organisations who are aligned to activating organisational-wide targets (sustainability goals, regulatory compliance, ethical sourcing) where leaders are actively integrating responsible procurement practices into their strategies.
- 58%: The proportion of global CPOs who are prioritising supplier relationships and performance management as an investment for future development as it has not been fully explored within organisations to command a strategic role in organisational success.
Future-proofing procurement: The vision for 2025 and beyond
Within the report, EY's Global Procurement Leadership team outlines its perception of the procurement landscape.#
"Looking ahead in 2025 and beyond," the authors write, "we foresee a marked rise in the reliance on CPOs by executive leadership to drive margin expansion in response to the external factors affecting supply costs.
"To navigate this landscape, procurement leaders will need to leverage advanced technologies and data-driven insights, not only optimising costs, but also fostering innovation, sustainability and resilience throughout the supply chain.
"The future of procurement hinges on its capacity to create value beyond traditional boundaries, empowering organisations to thrive in an increasingly complex and dynamic market environment."
A call to action
EY's researchers conclude the report by listing five calls to action for CPOs to help them stay at the forefront of business growth:
- Get ahead of the market — Utilise AI-enabled category management and strategic sourcing to adapt quickly, assess total cost of ownership and identify value creation opportunities your third-party spend can deliver.
- Harness the power of AI and orchestration — Don't hesitate to implement AI, analytics and UX solutions within your function. Automation will drive speed to value, efficiencies and rapid response to market changes.
- Invest in talent development — Foster talent, skills and career growth through professional learnings, rotational programmes and new incentives to empower individuals to reach their full potential.
- Commit to long-term sustainability — Align procurement sustainability initiatives with organisational prioritised goals to maximise impact and value.
- Business partnering — Create trusted, mutually beneficial and strategic partnerships oriented to your stakeholders to unlock innovation, efficiencies and value creation from suppliers.
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