How Procurement is Becoming a Competitive Differentiator
Enterprises across the world are rethinking their procurement strategies – moving beyond simply reducing cost and instead looking to optimise processes and reduce time to market.
That's according to a report published by Information Services Group (ISG), a global, AI-centred technology research and advisory firm.
The 2025 ISG Provider Lens Procurement Services report highlights what many experts have been saying – procurement is fast becoming a strategic priority when it comes to mitigating risks and ensuring the continuity of supply chains.
While conflict, geopolitical unrest and tariff uncertainty have presented a seemingly never-ending series of disruptions, innovative companies are finding ways to make procurement a competitive differentiator.
"Enterprises recognise the need to make their procurement processes more efficient, transparent and resilient," says Robert Stapleton, Partner and Lead for Business Process Outsourcing for ISG.
"At many companies, modern procurement services from leading providers play an important role in these efforts."
Technology reshaping the procurement landscape
As procurement evolves, teams are partnering with service providers to install new technologies which improve automation, data analytics and collaboration with suppliers, ISG's report says.
These include AI, generative AI, advanced analytics tools and robotic process automation (RPA).
Dedicated procurement centres of excellence are working to develop customised solutions to meet the requirement of specific enterprises. Within the next two years, ISG expects companies to increase the use of advanced technologies to refine sourcing practices, enrich user experience and improve supply chain collaboration.
The report also outlines the continued use of AI and automation continues – alongside other technology – all of which is reshaping enterprise procurement. Companies are harnessing advanced analytics for granular visibility into spending patterns, supplier performance and market conditions.
Embracing strategic approaches for competitive advantage
There has also been a shift in embracing strategic sourcing based on benchmarks and best practices to enhance client/supplier relationships, as well as proactive risk assessment based on real-time data, aimed at increasing provider reliability in an unstable global environment.
Circular economy practices, which benefit sustainability by reducing waste, are also an increasingly common part of enterprise procurement strategies.
The use of procurement business process outsourcing (BPO) and managed services continues to grow as enterprises seek more flexible operations, ISG says.
The most common outsourced functions include strategic sourcing, spending data management and supplier risk and performance management, while procurement technology management and sourcing governance are beginning to gain traction.
"Procurement has the potential to transform supply chain management," comments Jan Erik Aase, Partner and Global Leader at ISG Provider Lens Research.
"Enterprises seek services and technology expertise to maximize the value of procurement systems and providers are stepping up."
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