Gartner Explores How CPOs Can Lead Through 2025

Chief Procurement Officers are facing an abundance of pressure to handle geopolitical risks and volatile supply chains while reducing costs.

Not only does the rising demand for digital transformation add complexity but CPOs must also ensure sustainability targets are balanced with supplier performance and regulatory compliance.

Given this, American research and advisory firm, Gartner, has released its 'Top 3 Strategic Priorities for Chief Procurement Officers’ report, emphasising the need for CPOs to effectively reshape their procurement strategies to respond to global challenges. 

Ryan Polk, Senior Director and Procurement Analyst at Gartner, explains: “Procurement is at a crossroads. AI is growing more autonomous, protectionism is disrupting supply chains and external forces — geopolitical shifts, energy crises and talent gaps — are reshaping the function. Chief procurement officers (CPOs) must move fast to stay ahead.

“The 2025 Leadership Vision for Chief Procurement Officers highlights the top 3 strategic priorities Chief procurement officers need to tackle now to drive impact.

"74% of procurement leaders say their data isn’t AI-ready, limiting its potential to improve efficiencies and cost savings. As Chief Procurement Officers navigate AI strategy, globalisation shifts and talent transformation, preparing procurement for the future requires a proactive approach.”

How can we make procurement data AI-ready?

CPOs can unlock the effective use of AI in procurement processes by investing in procurement data maturity.

This mature data will support strategic sourcing decisions by offering clearer insights into total cost and supplier performance while allowing procurement teams to ensure compliance and manage risks. 

CPOs can unlock greater agility and resilience amidst the complexity of Gen AI and protectionism by investing in mature data.

Gartner outlines a five-step approach to making your data AI-ready:

1. Align data to AI use cases

Data elements for procurement AI use cases can be identified when procurement works with Data and Analytics leaders.

2. Identify data governance for AI

Procurement and D&A can work together to craft a plan that will mitigate or prevent compliance risks. They can point out regulations, rules and policies needed in the use of AI in procurement results.

3. Evolve metadata from passive to active

D&A leaders can understand the ‘what’, ‘where’, ‘who’, ‘how’ and ‘when’ aspects of organisational metadata by discovering, enriching, analysing and inferring from it. 

4. Prepare data pipelines

D&A leaders can prepare and improve data pipelines for the AI model being crafted by testing and validating input data. 

5. Assure and enhance 

D&A leaders can validate data and its accuracy and adherence to governance requirements by testing and monitoring the AI model.

Responding to geopolitical uncertainty

CPOs can navigate the complexities of supply networks and global trade by crafting a tailored ‘reglobalisation’ strategy.

Supply chains must balance risk, cost and resilience in specific ways to handle geopolitical tensions and regulatory shifts.

A unique strategy that fits the individual needs of the business will mean CPOs can support growth while mitigating risks and disruption.

Gartner points to four approaches we can embrace for globalisation strategies:

Divesting

This will move all procurement activity away from current supply locations. CPOs can utilise this when regulations prevent sourcing from the current market. However, CPOs must consider the impact of the supply chain’s cost to serve and the ability of other supply regions to cope with additional volumes. 

Decoupling

This is when operations are split and a separate ecosystem is created that is independent of current supply locations. This can be used when CPOs create regional supply networks to shrink supply chains or when the need for regional supply networks is impacted by regulations or geopolitics. 

Diversifying 

CPOs can add suppliers from outside of the current locations while still maintaining a portion of sourcing as it is. This can help with being closer to demand points to achieve the required lead time for sourcing (nearshoring) or when balancing risk with cost-efficiency (low-cost diversification).

Doubling down 

CPOs can expand supplier networks with current locations to enhance the robustness of the network. This can help to protect existing supply networks with ongoing investments and maintain the most cost-efficient supply network option. 

Crafting a future-ready procurement workforce

Procurement teams must adapt to changing technology and business demands by embracing personalised talent strategies.

CPOs can enhance performance and craft targeted competencies by ensuring training and learning opportunities are aligned with specific roles.

These personalised strategies will ensure workforces can effectively enhance procurement transformation.

Gartner identifies three pillars that will allow CPOs to unlock new talent impact:

Data literacy programs

CPOs must customise data literacy strategies to key role archetypes of change leader, data creator and consumer. This will mean every procurement employee can make the most impact as they will have D&A competencies.

Target learning moments

Target key workflow opportunities will produce performance-led learning opportunities for employees. This will enhance retention and impact by crafting a relationship between the employee's needs and the business's needs. 

Empowered ownership

Targeted and dynamic talent strategies can bridge the diverse needs of today’s workforce to improve shared ownership and trust. 

Gartner’s report highlights how CPOs must develop tailored global sourcing strategies, advance data maturity for AI readiness and build future-ready talent through personalised approaches to navigate the changing procurement landscape. 

Explore the latest edition of Procurement Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.

Discover all our upcoming events and secure your tickets today. 

Procurement Magazine is a BizClik brand.