INTELLlGENCEDRIVES

INNOVATION

9GEP

OUTLOOK

REPORT

2025

PROCUREMENT&SUPPLYCHAIN

03

0

4

06

Introduction

ExecutiveSummary

GlobalBusinessandMacroeconomic

Trendsfor2025

Inflation:ReturningtoRecentHistoricalNorms

GDP:StablebutTepidGrowth

InterestRates:FromInflationMitigationtoGrowth

Employment:BroadlyStable

Energy:RisingTensions,ElevatedOilPrices

China’sEconomicLandscape:WhichChineseGrowthModelWillEmerge?

15

SixLeadershipThemesfor2025

1.

AIandtheEvolutionoftheProcurement

OperatingModel

2.

AI-PoweredProcurementOrchestration:What

YouHaveBeenWaitingFor

。O

3.

AIAgentsJointheRanksofProcurement

andSupplyChainTeams

4.

TheChangingConversationAroundValue

5.

SupplyChainResilienceinaShifting

O

RegulatoryLandscape

6.

Localizationvs.Globalization—

TheFightContinues

O

Conclusion

Notes

O

33

:

34

Introduction

Norestfortheweary.Afterrecentlyadaptingtothepost-pandemicreality,organizations

nowfaceacomplexlandscapeoftechnological,geopoliticalandregulatorychangesthatare

reshapingprocurementandsupplychainsdramatically.Theyear2025loomslargeasapivotalmoment:Artificialintelligence(AI)ispoisedtorevolutionizeoperationalmodels,propelling

companiestowardnewefficienciesandrestructuringhowprocurementintegrateswithbroaderbusinessstrategies.Againstthisbackdrop,tradetensionspersist,withlocalizationand

sustainabilitynowvyingagainsttraditionalglobalization.

Procurementandsupplychainleadersareconfrontedwithprofoundquestions:WillAItransformprocurementintoaself-directedpowerhouse?Cancompaniesbalanceresiliencewithcost-

effectivenessamidgeopoliticaluncertainties?

Thisreportunpackssixtransformativetrendsthatwillshapeprocurementandsupplychains,offeringbothchallengesandboundlesspotentialforcompaniestoreinventthemselvesas

adaptable,future-readyorganizations—inthecontextofthemacroeconomicoutlookfortheyearahead.

Havingrecentlycelebratedour25thanniversary,GEPisaclosepartnertomanyleading

procurementandsupplychainleadershipteamsforFortune500andGlobal2000businesses.Ourfirmofaccomplishedconsultantsandtechnologyadvisorsoffersvaluableperspectivestohelpbusinessleadersstrategizefor2025.

TheGEPOutlook2025:Procurement&SupplyChainreportcoversthekeytopicsandprioritiesthatwilldominatethecorporateagendaintheyearahead.

ExecutiveSummary

Asorganizationsnavigatediversemacroeconomiclandscapes,rapidadvancementsinAI,

dynamicmarketconditions,tradewarsandgeopoliticalconflicts,theymustadapttheir

strategiesandpracticestostaycompetitive.Understandingthesetrendsandtheirinfluenceonprocurementandsupplychainsiscrucialforleaderstomakeinformeddecisions,drive

innovationandenhanceoperationalresilience—ultimatelypositioningtheircompaniesforsuccessintheyearahead.

GEP’s2025outlookreportidentifiessixmajortrendsinprocurementandsupplychainmanagement,eachofwhichposeprofoundchallengesandopportunitiesforleadershipteams.

AIandtheNextEvolutionofProcurement:AsAImatures,procurementwillseeseismicshifts,withAImovingfromtaskautomationtoautonomousdecision-making.Initsearlyphase,AIco-pilotswillhandlerepetitivetasks,allowingteamstofocusonstrategy.As

organizationsadvancealongthematuritycurve,AIwillmanageworkflowsindependently,reshapingprocurementintoadigital-firstfunctionthatprioritizesagilityandstrategic

foresight.

AI-PoweredProcurementOrchestration:Orchestrationtoolsbringself-service

procurementtotheforefront,enablingnon-expertstonavigatecomplexsourcingprocessesseamlessly.ByembeddingAI-drivenrecommendationsandpredictiveanalytics,these

platformsenhancecompliance,efficiencyandriskmanagement,positioningprocurementasastreamlined,integralfunctionacrossallbusinessareas.

AIAgentsinProcurement:AIagentsarenolongeranemergingtechnology—theyarebecominganoperationalnecessity.Theseagentshandlecomplextaskslikedemand

forecastingandriskmonitoring,transformingsupplychainsintopredictive,adaptivenetworks.Throughtargetedpilotprograms,companiescanintegrateAIagentsto

enhanceresilienceandoptimizeend-to-endsupplyflows.

EvolvingValueMetrics:Thedefinitionofvalueisexpandingbeyondcost

savings.Procurementleadersarenowevaluatedonresilience,sustainabilityandregulatorycompliance.Thesenewmetricsreflectanenvironmentwherelong-

termadaptability,ethicalsourcingandrobustriskmanagementoutweighimmediatefinancialgains,realigningtheprocurementfunctionwiththe

organization’sstrategicimperatives.

SupplyChainResilienceandRegulatory

Demands:Withheightenedregulatoryscrutiny,companiesmustpivotfromacompliance-drivenapproachtooneofproactiveriskmanagementandaccountability.Transparencyandsupplier

auditshavebecomevital,requiringorganizationsto

implementsystemsthatensurecomplianceandfostertrustwithregulators,consumersandinvestors.

Globalizationvs.Localization:Tradebarriersandrising

protectionismarechallengingthetraditionalglobalsupplychain.Friendshoringandnearshoringstrategiesaregainingtractionasbusinessesseeksupplychainsecurityoverpurecostadvantages.Ashifttolocalsupplynetworkspromotesflexibilityandresilience,pavingthewayforcompaniesto

navigatepoliticalandeconomicuncertaintieseffectively.

Collectively,thesetrendsillustrateaprocurementandsupplychainlandscapeonthebrinkofdigitaltransformation,whereadaptability,sustainabilityandproactiveriskmanagementwillsetleading

organizationsapart.

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

GlobalBusinessandMacroeconomicTrendsfor2025

Globaleconomicforcesarepullingindifferentdirectionsaswemoveinto2025,creatingacomplex

landscapethatdemandsreinvigoratedstrategiesandevengreateragilityfromprocurementandsupplychainteams.Below,thereportspotlightssixkeymacroeconomictrendssettoshapethecomingyear,eachwithsignificantimplicationsforbusinessesworldwide.

Inflation

ReturningtoRecentHistoricalNorms

Globalinflationisprojectedtofallfrom6.7%in2023to5.8%in2024andfurtherto4.3%by2025afterpeakingat9.4%inthethirdquarterof2022,accordingtotheInternationalMonetaryFund(IMF)

.1

In2024,inflationintheU.S.isexpectedtoreach3%,downfrom8%in2022and4.1%in2023.Inflation

intheU.K.droppedto1.7%inSeptember2024,whichislowerthantheBankofEngland’stargetof2%

.2

In2024,inflationintheU.K.isexpectedtotouch2.6%.TheEuroAreahasseenasimilardownwardtrend,withinflationat1.7%inSeptember2024;for2024,inflationisestimatedat2.4%

.3

Whileglobalinflationisreasonablyundercontrol,therearestillunmitigatedrisksduetounresolved

geopoliticalconflicts,includingtheRussianinvasionofUkraineandsustainedconflictintheMiddleEast,tradewarsbrewingamongChinaandG7economiesandrisingfoodpricesinemergingeconomies.

InflationTrends:AnnualPercentageChange(HistoricandProjected)

Projected

Country/RegionalClassification

2022

2023

2024

2025

2026

Global

8.6

6.7

5.8

4.3

3.6

AdvancedEconomies

7.3

4.6

2.6

2.0

2.0

U.S.

8.0

4.1

3.0

1.9

2.1

U.K.

9.1

7.3

2.6

2.1

2.0

EuroArea

8.4

5.4

2.4

2.0

2.0

Japan

2.5

3.3

2.2

2.0

2.0

Australia

6.6

5.6

3.3

3.3

3.0

EmergingandDevelopingAsia

3.9

2.4

2.1

2.7

2.8

ASEAN-5

4.8

3.5

2.3

2.3

2.3

China

2.0

0.2

0.4

1.7

2.0

India

6.7

5.4

4.4

4.1

4.1

MiddleEastandCentralAsia

13.4

15.6

14.6

10.7

8.5

LatinAmericaandtheCaribbean

14.2

14.8

16.8

8.5

5.7

Sub-SaharanAfrica

15.2

17.6

18.1

12.3

8.4

Source:TradingEconomics,WorldEconomicOutlook,Oct2024,IMF

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

6

2.7%

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

7

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

InflationTrends2024:MonthlyPercentageChange

6%

5%

4%

3%

2%

1%

0%

-1%

-2%

5.5%

5.1%

4.0%

3.4%

3.1%

2.5%

2.4%

2.8%

2.2%

1.7%

1.7%

0.4%

-0.8%

Jan24Feb24Mar24Apr24May24Jun24Jul24Aug24Sep24

U.S.U.K.EuroAreaChinaIndiaJapanAustraliaSource:TradingEconomics,WorldEconomicOutlook,Oct2024,IMF

KeyLookoutsfor2025

1.

ConflictsandTradeWars

Watchforheightened

supplyandprice

pressuresdrivenby

geopoliticalinstability,

includingconflictsintheMiddleEast,Russia’s

invasionofUkraineandongoingtradetensions

2.

IncreasingFoodPrices

Higherinflationcanbetriggeredbyrisingfoodprices,becauseof

increasingagricultural

productioncosts,

heighteneddemandandextremeweatherevents

3.

ShiftsinGovernmentsandPolicies

Bealerttopotential

economicshiftsand

evolvingtradedynamicsasleadershiptransitionsandpolicychanges

unfoldinmajoreconomies

4.

InterestRates

Interestratecutsby

centralbanksofmajoreconomiescancreatecostpressuresby

stimulatingeconomicactivityanddemand

5.

OilPriceVolatility

Expectcostincreasesifoilandenergypricesriseduetoproductioncuts,

conflictsormarketshifts

INTELLlGENCEDRIVES

INNOVATION

9GEP

OUTLOOK2025

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

8

GDP

StablebutTepidGrowth

Globalgrowthisexpectedtoremainat3.2%in2024and2025,accordingtotheIMFforecastintheOctober2024editionofitsWorldEconomicOutlook

.4

TheU.S.economyisexpectedtoslowfrom2.9%in2023to2.8%in2024,thendropfurtherto2.2%in

2025.TheU.K.isexpectedtoperformsomewhatbetterat1.1%in2024,upfrom0.3%in2023,and1.5%in2025(higherthantheIMF’sJulyforecastof0.7%)duetofallinginflationandalikelyeasingofmonetarypolicy.

5

TheEuroAreaisalsoexpectedtorecoverin2024withGDPgrowthprojectedat0.8%,upfrom

0.4%in2023.In2025,theregion’seconomicgrowthisexpectedtoreach1.2%.

EmergingeconomiesinAsiawillgrowslowerincomparisonto2023,impactedbyaslowdowninChina,

whichisexpectedtogrowat4.8%in2024.Thisisdownfrom5.2%in2023,mainlyduetoweakerpropertypricesandlowconsumerconfidence

.6

Growthintheworld’ssecond-largesteconomyisexpectedtoslowto4.5%in2025.Chinahasbeenintroducingstimulusmeasures,includingmortgageratecutsforexistinghomesandincreasedbanklending,tostimulatetheeconomy.Indiaisexpectedtogrowat7%in2024and6.5%in2025,adropfrom8.3%in2023.

GDPGrowth:AnnualPercentageChange(HistoricandProjected)

Projected

Country/RegionalClassification

2022

2023

2024

2025

2026

Global

3.6

3.3

3.2

3.2

3.3

AdvancedEconomies

2.9

1.7

1.8

1.8

1.8

U.S.

2.5

2.9

2.8

2.2

2.0

U.K.

4.8

0.3

1.1

1.5

1.5

EuroArea

3.3

0.4

0.8

1.2

1.5

Japan

1.2

1.7

0.3

1.1

0.8

Australia

3.9

2.0

1.2

2.1

2.2

EmergingandDevelopingAsia

4.4

5.7

5.3

5.0

4.9

ASEAN-5

5.4

4.0

4.5

4.5

4.5

China

3.0

5.2

4.8

4.5

4.1

India

7.0

8.3

7.0

6.5

6.5

MiddleEastandCentralAsia

5.5

2.1

2.4

3.9

4.2

LatinAmericaandtheCaribbean

4.2

2.2

2.1

2.5

2.7

Sub-SaharanAfrica

4.1

3.6

3.6

4.2

4.4

Source:WorldEconomicOutlook,Oct2024,IMF

INTELLlGENCEDRIVES

INNOVATION

9GEP

OUTLOOK2025

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

9

InterestRates

FromInflationMitigationtoGrowth

Centralbanksareshiftingtheirfocustostimulatingdemandasinflationstabilizes.ThecentralbanksoftheU.S.,U.K.,theEuroAreaandChinastartedcuttinginterestratesin2024asinflationapproachedtarget

levels.TheU.S.FederalReservecutinterestratesforthefirsttimeinfouryearsinSeptember2024,atrendlikelytocontinueinto2025asthegovernmentseekstoeaseeconomicpressuresandreignitegrowth.

7

TheU.K.cutitsinterestrateto5%inAugust2024,itsfirstsincethepandemic,andonceagaininNovemberto4.75%.

8

TheEuropeanCentralBankcutitsratesto3.25%inOctober2024.

9

ThePeople’sBankofChinalowereditspolicyinterestrateto3.1%andfive-yearloanprimerateto3.6%inOctober2024.

10

Thesereductionsaimtocatalyzetherealestateandcreditmarkets.India,likemanyemergingeconomies,hasmaintaineditsbenchmarkinterestrateat6.5%for2024andisadoptinga

cautiousapproachtopreventaresurgenceofinflation

.11

InterestRatesComparison

7%

6%

5%

4%

3%

2%

1%

0%

U.S.CanadaU.K.EuroAreaChinaIndiaAustralia

Source:OECD,TradingEconomics

Sep23

Sep24

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

10

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

Long-TermInterestAnnualRates:TrendsandForecast

8

7

6

5

4

3

2

1

0

2022202320242025U.S.U.K.EuroAreaIndiaJapanAustralia

Source:OECD,TradingEconomics

Long-TermInterestRatesForecastonQuarterlyBasis

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Q42024

Q32025Q42025

Q12025Q22025

U.K.U.S.

JapanEuroAreaAustralia

Source:OECD,TradingEconomics

INTELLlGENCEDRIVES

INNOVATION

9GEP

OUTLOOK2025

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

11

Employment

BroadlyStable

FormanyG7economies,unemploymentisnearmulti-decadelows.Whilethesejobmarketsarestable,therearesignsofsoftening.ThegloballabormarketisundergoingsignificantshiftsasautomationandAItransformindustries.In2025,asmoreindustriesadoptAItechnologies,concernsoverjoblossesandtheneedfornewskillsetswillemerge.

TheU.S.andU.K.observedhigherunemploymentratesinOctober2024thanatthestartoftheyear.

DatapublishedbytheU.S.LaborDepartmentinOctober2024showsthatthetotalnumberofAmericanscollectingjoblessbenefitsroseby39,000to1.89millionfortheweekofOctober26,2024—themost

since2021.

12

Thisrisinglevelofcontinuingclaimssuggeststhatmanyworkersarefindingitdifficulttore-entertheworkforce.TheunemploymentrateintheU.K.isestimatedtobehigherin2024thanprevious

years(3.9%in2022and4%in2023)andisexpectedtosettleat4.3%byendof2024.

13

China’sjobmarketremainedstableinthefirstthreequartersof2024,supportedbygovernmentemploymentefforts.DatafromChina’sNationalBureauofStatisticsshowsthattheurbanunemploymentrateaveraged

5.1%inthefirstthreequarters,a0.2percentagepointdecreasefromthesameperiodlastyear

.14

InIndia,

thelabormarketremainedpositivewithunemploymentratesat7.8%inSeptember2024,downfrom8%in2023,asperdatafromtheCentreforMonitoringIndianEconomy.

15

unemploymentRateTrends:Annualpercentagechange(Historicandprojected)

projected

AdvancedEconomies

4.5

4.4

4.6

4.7

4.6

U.S.

3.6

3.6

4.1

4.4

4.3

U.K.

3.9

4.0

4.3

4.1

4.0

EuroArea

6.8

6.5

6.4

6.3

Australia

3.7

3.7

4.1

4.4

4.5

otherAdvancedEconomies

(ExcludingG7andEuroArea)

3.4

3.3

3.6

3.6

3.6

source:worldEconomicoutlook,oct2024,IMF

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

12

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

KeyLookoutsfor2025

GlobalEconomicGrowthGeopoliticalConflictsTradeTensionsandAIandAutomation

Lookoutforunevengrowth

softeningthejobmarket,

particularlyasadvanced

economiesinEuropeand

Chinaareprojectedtosee

onlymoderateexpansion

Continuingconflictsinthe

MiddleEastcoulddisrupt

thecommodity,freightand

manufacturingsectors,

potentiallydestabilizingthe

jobmarket

Localization

Growingtradetensionsand

strategiessuchasreshoring

andnearshoringcanimpact

manufacturingandchange

laborrequirements

TheadoptionofAIand

automationwillincrease

demandfortechjobsand

requireskilldevelopment,

whilealsoraisingconcerns

aboutpotentialjoblosses

INTELLlGENCEDRIVES

INNOVATION

9GEP

OUTLOOK2025

Energy

RisingTensions,ElevatedOilPrices

Oilpriceshaddecreasedslightlyfrom$85perbarrel(bbl)atthestartof2024toanaverageof$75/bbl

inSeptember.Theoilmarkethasnotmaintainedpricesbasedondemandalone,asglobaleconomic

growthhasbeensluggish.ConflictsintheMiddleEast,theRussianinvasionofUkraineandvoluntaryoilproductioncutshavecontributedtokeepingpriceselevated.

In2025,oilpricesareexpectedtoremainsteadyinthe$75-$80/bblrange.However,oilpricescansurpass$80/bblifthere’sadditionalescalationintheMiddleEast.Ontheotherhand,de-escalationcoulddrive

pricesbelow$70/bbl.

CrudeOilPrices(USDPerBarrel)

120

100

80

60

40

0

20

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2022

2023

2024

2025

BrentSpotAverageWestTexasIntermediateSpotAverage

Source:EIA

KeyLookoutsfor2025

SlowingDemand

Weakeningdemandcouldleadtoinventory

buildupsandafallincrudeoilprices

ConflictintheMiddleEast

ConflictintheMiddleEast, aleadingoil-producing region,canincreasevolatilityofoilpricesin2025

SaudiArabiaandOPEC+ProductionCuts

IfSaudiArabiaandthe

alliedOPEC+nations

continuetheirvoluntary

productioncutsin2025tosupportoilprices,more

fluctuationsarelikely

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

13

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

14

China’sUncertainEconomicLandscape

WhichChineseGrowthModelWillEmerge?

ChinahasbeenaphenomenaldriverofgrowthsincejoiningtheWorldTradeOrganization.Thecountrynownavigatesslowinggrowth,arealestatecrisisandshiftinggovernmentpolicies—andtheworldiswatching.WillChinareturntoitshigh-growthmodel,orwillitbegintoplateau?

Buddingtradewarsandtheincreasedinterestinnearshoringaddtothesechallenges.Thesepressuresthreatentolimitthegrowthpotentialoftheworld’ssecondlargesteconomy.

Adeeperandlongerslowdownwillhaveglobalrepercussions:Chinaisnotjustthelargestsupplierofsteel,constructionmaterial,pharmaceuticalrawmaterials,footwearandelectronics,itisalsoamongthebiggestimporteroffuels,machineryandequipment,andpreciousmetals.AslowdownwillimpactothereconomiesbasedontheirtradeandinvestmenttieswithChina.GEPanticipatesthatChina’sleaderswillrampup

economicstimulusactionsifgrowthcontinuestoslow.

SixLeadershipThemesfor2025

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

16

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

1.AIandtheEvolutionoftheProcurementOperatingModel

Procurementisonthecuspofaprofoundtransformation.Whileallfunctionsarepoisedtobenefitfrom

innovationsinAI,fewarepositionedforsuchaseismicshiftasprocurement.AsAItoolsmatureand

takeonmoresophisticatedroles,thetraditionalprocurementoperatingmodelwillbecomeobsolete.Thequestionisnotifprocurementwillchange,buthowtoembracethistransformationandunlockvalue.

TheBeginningoftheEnd:ProcurementAsWeKnowIt

Today’sprocurementfunctionhashistoricallyachievedoperationalsuccessbymasteringsupplier

management,costoptimizationandriskmitigation,amongotherareas.Theprocurementoperatingmodelisreliantonhumanexpertiseandoftenstruggleswithinefficiency,fragmenteddata,andlabor-intensive

processes.AIoffersacompellingsolution,creatingmoreopportunitiestofocusonstrategic,high-valueactivities.

Procurementleadersarealreadyasking:Willtechnologyredefinethehumanrole?Willtheprocurementfunctionexistinthefuture?GEPexpectstheanswertobearesoundingyes,butnotintheform

procurementleadersunderstandtoday.AIwillaffecttheoperatingmodelinthreedistinctphases,eachmoretransformativethanthelast,asorganizationsembarkontheirAIevolution.

ThreePhasesofProcurement’sEvolution

Assist

?AItoolsactas“co-pilots,”automatinglow-valuetasksandofferinginsights

?Coredecision-makingremainswithhumans

Perform

?AImanagesworkflowsautonomously,guidedbyhumansforvalidation

?Teamstructuresshiftastheneedfortacticalrolesreduce;newstrategicpositionsemerge

Empower

?Procurementactivitiesaremanagedbyusers,enabledbyAIco-pilots

?TeamstructuresandroleschangeasfocusshiftstodatamanagementandAIgovernance

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

17

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

Phase1:Assist

Theyear2025willmarktheAssistphaseformostcompanies.Inthisphase,AItoolsactas“co-pilots,”

automatinglow-valuetasksandprovidinginsightsthatallowprocurementteamstomakemoreinformeddecisions.Today,AIisembeddedinsource-to-pay(S2P)platforms,offeringspendforecasting,supplierdiscounting,frauddetection,andcontractdraftingtools.However,thecoredecision-makingstilllieswithhumans.

Atthisstage,procurementteamsarenotsignificantlyimpactedinsizeorstructure.AIislimitedto

augmentinghumancapability,improvingproductivity,andenablingteamstodeliverincrementalcostsavingsandefficiencies.ButasAItoolsbecomemoreadvanced,theroleofprocurementprofessionalswillevolve.

Phase2:Perform

ThePerformphasewillseeAItakingonamoreprominentrole.MoreadvancedAIsolutionswillbegin

managingend-to-endprocurementworkflows,performingtaskslikecategorystrategydevelopment,

contractrenewals,anddemandforecastingautonomously,whilestillguidedbya“human-in-the-loop”tovalidateandcontroloutputs.

Inthisphase,procurementteamstructureswillbegintoshift.Theneedfortacticalroleswilldiminishas

automationtakesover.Instead,newstrategicroleswillemerge,focusedoninterpretingAI-driveninsights,managingmorecomplexcategories,andensuringcontinuousimprovementinAIoutputs.

Teamswillrequirenewcompetencies,withemphasisondataanalytics,AIfluency,andbusinessinsights,asprocurementevolvestoamorestrategicdriverofbusinessvalue.

Phase3:Empower

ThefinalenvisagedevolutionistheEmpowerphase.Inthisstage,procurementbecomesahighlydigitalizedfunctioninwhichbusinessusers,enabledbyAIco-pilots,willmanageprocurementactivitiesindependently.Routine,low-complexitypurchases,supplierevaluations,andevencontractnegotiationswillbehandled

byintuitiveAI-drivenplatforms,freeingprocurementprofessionalstofocusonstrategicprojects,complexcategories,andsupplierrelationships.

Inthisphase,theoperatingmodelwillseeamassiveshift.Categoryteamswillevolveintovalue-chain

optimizationteams,whilebusinesspartnerteamsbecomedeeplyembeddedwithinbusinessunitstodeliverinsightsandstrategiesalignedwithoperationalgoals.Theriseofself-serviceprocurementwillreducethe

needfortraditionalroles,butinitsplace,highlyspecializeddatamanagementandAIgovernanceteamswilltakecenterstage.

PROCUREMENT&SUPPLYCHAINBACKTOCONTENTS

18

9GEP

INTELLlGENCEDRIVES

INNOVATION

OUTLOOK2025

AchievingNewValueThroughAI

AI’spotentialinprocurementextendsfarbeyondautomationandefficiency.AsAItoolsevolve,theywill

unlockdeeperinsightsintosupplierperformance,costoptimization,riskmanagement,andsustainability.Procurementwillnolongerbemeasuredsolelyoncostsavings.Newmetrics,suchasagilityinrespondingtosupplydisruptions,greenhousegasreductions,andtheproportionoftouchlesstransactions,will

becomekeyindicatorsofsuccess.

Tofullyrealizethesebenefits,organizationsmustinvestintherighti