Shifting Reporting Lines: CPOs Gaining Strategic Ground 

A fundamental shift is occurring in reporting structures. In 2023, only 26% of procurement teams reported to the Chief Operating Officer (COO); in 2024, that number has grown to 44%. Conversely, reporting to the Chief Financial Officer (CFO) has dropped to 23%. This transition signals that procurement is becoming more involved in broader strategic discussions, such as innovation and ESG targets, rather than being limited to budget control. 

Inflation and Cost Pressure Still Dominate 

Despite ambitions for digital transformation and sustainability, monetary uncertainty remains the top concern for half of the surveyed companies—49% cited inflation as their greatest challenge, a sharp increase from 20% the year before. Even as global inflation shows signs of easing, high costs are forcing companies to reconsider supplier relationships and long-term sourcing strategies. 

ESG and Regulations: From Promises to Practice 

Sustainability and ESG goals have become a permanent fixture in procurement strategies. According to the report, 42% of companies now rank ESG as their second-highest priority after digitalization. Firms are increasingly adapting to new regulatory frameworks such as the EU's CSRD and ESRS—not only for reputational reasons but also because ESG leadership delivers value. Research shows that companies with strong ESG policies achieve up to 3% higher profit margins and a 10% market premium. 

Growing Influence, Lagging Trust 

While 84% of executives consider procurement insights crucial to strategic decision-making, only 64% believe those insights are actually used across the organization. Even more telling, just 18% of respondents expressed strong confidence in procurement’s ability to collaborate effectively with other departments. Procurement must earn trust and be viewed as a true business partner—not just a cost controller. 

Digitalization and AI: Promise and Peril 

Digital transformation is the top priority for the next 12 to 18 months (57%). Procurement teams are adopting automation, generative AI, and predictive risk tools. Nearly 34% of companies plan to implement AI strategies, particularly in contract analysis, spend analytics, and commodity price forecasting. 

However, there are challenges: only 32% of executives believe procurement effectively manages automation, and a mere 16% trust their ability to control spending. Data quality and skills gaps remain major obstacles. 

Rethinking the Operating Model 

Companies are exploring new procurement models. 32% plan to strengthen Centers of Excellence (CoE) to share best practices across the organization. Meanwhile, 28% are moving toward a more centralized procurement structure, with strategic oversight in the headquarters and tactical execution in business units. 

Transformation Requires Culture Shift 

Rolling out new technologies and strategies requires cultural change. Yet 69% of senior leaders admit their organization lacks a clear vision for procurement transformation. Without investment in change management, skills development, and stakeholder alignment, companies risk falling short of their digital ambitions. 

As one executive put it: “Without proper change management, companies lose 99% of the value that new tools could bring.” 

Conclusion 

Procurement is entering a pivotal era—from an operational support function to a driver of strategic transformation. To realize its full potential, it must demonstrate not only the ability to reduce costs and adopt new technologies, but also to generate value, build partnerships, and lead businesses toward more sustainable and resilient futures.