Procurement Teams Face Data Crisis Despite Risk Focus

Procurement departments operate in a contradictory landscape. Strategic priorities have evolved to embrace resilience and risk management, but operational infrastructure has not kept pace.

According to joint research by the Institute for Supply Management (ISM) and Amazon Business, this misalignment leaves organisations vulnerable. The whitepaper, Balancing Cost and Risk: An Operating Model for Supply Chains, surveyed 425 global professionals. It found that 71% of organisations now make balancing cost and risk the central pillar of procurement strategy.

However, fewer than half of respondents (45%) said their procurement functions are equipped to handle supply chain disruptions.

Manual processes hinder response

One explanation for this unpreparedness could be the continued reliance on outdated data collection methods. According to the report, 65% of firms still use manual data reporting to gather supply chain information.

This dependence on manual processes could mean procurement teams lack the agility required to respond to market volatility. Real-time upstream visibility remains out of reach for most organisations, limiting their ability to react to shocks.

Debbie Fogel-Monnissen, Interim CEO at ISM, says modern procurement environments no longer treat disruption as exceptional. "Leaders recognise the need to balance cost with resilience, but our research shows many are still building the capabilities to act on that insight," she says. "Closing that gap is essential to protecting performance and ensuring continuity."

Technology adoption remains patchy

The technological deficit extends beyond data collection into risk monitoring capabilities. According to the research, 58% of organisations use e-procurement platforms and 51% use supplier portals, but more advanced tools remain underutilised.

Basic impact analysis is used by 64% of companies, but adoption of sophisticated risk evaluation methods is far lower:

• risk matrices are used by 49% of organisations
• scenario planning capabilities are utilised by 46% of firms
• advanced predictive analytics remain largely unimplemented across industries

This could leave procurement functions exposed in an environment where cyber threats now rank as the leading risk concern among survey respondents. In interconnected global networks, a single digital vulnerability in one supplier can halt entire production lines.

Traditional evaluation metrics such as financial health and quality performance remain foundational, but may no longer be sufficient on their own.

Risk-adjusted cost models emerge

Procurement leaders are moving away from conventional cost management approaches. According to the study, 71% of respondents use long-term contracts as their primary tool for managing costs during periods of uncertainty.

However, progressive organisations are expanding their frameworks. One emerging model centres on risk-adjusted total cost of ownership, which incorporates service performance, process efficiency and disruption exposure alongside unit price.

Building resilience represents the first step for most modern procurement functions. However, protecting performance requires moving beyond spreadsheets and embracing automated, real-time data visibility.

Procurement strategy and technology execution must align to address vulnerabilities within global supply networks.