Future of procurement

Procurement is at an exciting turning point where leaders have the opportunity to recast their functions as strategic powerhouses.

Enabled by a host of technologies, including generative AI and automation, the procurement function stands to drive high-performing, sustainable purchasing activity and become key influencers in the organizational value chain. Such an advance should enable procurement organizations to take on additional roles and objectives, such as co-designing products, promoting supply innovation, forging business development alliances, and supporting emerging providers.

In this global report we examine how these forces may affect procurement teams and discuss how procurement leaders can respond—and the capabilities they will need to thrive. Our insights are augmented by findings from the KPMG 2023 Global Procurement Survey, which captured the perspectives of 400 senior procurement professionals around the globe, representing a range of industries.

Read on to see highlights from the report and access the full global publication.

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Signals of change

77% of procurement executives say risk of supply disruption is a critical external challenge

66% of procurement executives say increased regulatory and ESG demands are heavily influencing strategic sourcing in the next 3-5 years

79% of procurement executives are progressing their implementation of emerging technologies such as GenAI

Just 32% of procurement executives say their company is planning or likely to initiate onshoring or nearshoring of supply sources in the next 3-5 years

83% of procurement executives rank inflationary measures and increasing commodity prices as the top external procurement challenge

Only 8% of procurement professionals expect a significant decrease (10-25%) in headcount in the next 18 months or so

The 5 key forces shaping the future of procurement

Build a resilient footprint

Through redundancy and regular risk assessments, increasing reshoring/nearshoring, and reducing sole sourcing, with enhanced supply chain transparency and flexible supplier relationships.
Embed big data and generative AI to accelerate automation

By dramatically speeding up data processing and analysis, generating insights that drive innovation and enhance productivity and decision-making.
Reaffirm commitment to sustainability and ESG

By building a roadmap to guide investment in a transparent, sustainable supply chain, and comply with ESG regulations.
Drive continuous performance improvement using data and analytics

To optimize costs, service levels, and working capital, and rethink category strategies, enforcing vendor contracts and reviewing contract pricing formulas.
Build, train and retain tomorrow’s workforce

By offering strategic roles with accelerated advancement opportunities, investing in supplier relationship management and TPRM skills, as well as automating category management.