Procurement is undergoing a strategic transformation. According to the GEP Outlook 2025 report, organizations must now adapt to a dynamic convergence of AI-driven innovation, geopolitical tension, macroeconomic uncertainty, and elevated regulatory scrutiny. Success in this new era will depend on how rapidly companies transform procurement from a reactive cost function into a strategic, tech-enabled, and value-driven powerhouse.
China’s uncertain recovery and diverging growth paths in emerging markets call for diversified supply and sourcing strategies
Procurement in 2025: Resilience, Intelligence & Redefined Value
Global Outlook: Moderating Risks, Shifting Growth
The global economic backdrop is stabilizing but mixed. The IMF forecasts global GDP growth at 3.2% in 2025, with inflation receding to 4.3% globally, down from a peak of 9.4% in 2022. However, rising energy costs, regional conflicts, and food price volatility remain pressing risks (IMF, Oct 2024; AP, Oct 2024).Meanwhile, interest rate cuts in the U.S., U.K., and Euro Area signal a pivot from inflation control to growth stimulus (OECD, 2024). Yet, China’s uncertain recovery and diverging growth paths in emerging markets call for diversified supply and sourcing strategies.
AI Redefines Procurement Operating Models
The report forecasts a three-phase evolution of AI in procurement:
- Assist – AI co-pilots automate tasks, enhancing human decisions.
- Perform – AI manages workflows with human oversight, enabling new team structures.
- Empower – Procurement becomes user-led, AI-enabled, and fully digital.
Tools like AI-powered orchestration platforms and autonomous agents are already transforming sourcing, forecasting, and supplier management. As GEP notes, “Procurement as we know it may be dead—what comes next is smarter, faster, and more strategic.”
The Value Conversation Has Shifted
2025 marks a paradigm shift in how procurement value is defined. No longer judged solely by cost savings, procurement leaders are now evaluated on resilience, ESG compliance, and risk mitigation. Metrics such as Scope 3 emissions, supply chain agility, and ethical sourcing have become board-level KPIs.
“Resilience comes at a cost—and that’s acceptable,” GEP emphasises. The best teams will justify nearshoring or dual sourcing not just with price but with long-term continuity and compliance gains.
Some Key takeaways:
- AI and data will underpin next-generation procurement models
- Orchestration tools simplify complexity and boost compliance
- Collaboration, sustainability, and resilience define competitive edge
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