Diana Gavin breaks down the EY Global CPO Survey findings on what procurement leaders prioritize in 2025. 80% plan to deploy generative AI within three years, though only 36% have it working today. 84% say talent and skill gaps are critical, and 91% are aligning procurement with sustainability targets.
Welcome everyone to The Procurist Podcast. I'm your host, Max Henry, and today we're diving into some fascinating insights from the EY Global CPO Survey, looking ahead to 2025. Joining me is my dear friend Diana Gavin and a procurement expert. Diana, great to have you here.
Thanks, Max. I'm really excited to discuss these findings. They paint such an interesting picture of where procurement is headed.
Let's start with what's really catching my eye here— the role of procurement as a competitive advantage. We're seeing that CPOs are really at the forefront of navigating some major changes, aren't they?
Absolutely, Max. You know, what's fascinating is that we're seeing this perfect storm of factors— technological innovation, geopolitical shifts, and rising ESG standards. And, um, what's really interesting is that about 58% of global CPOs are now prioritizing supplier relationships as a key investment area.
That's quite significant. And speaking of technology, the adoption of AI seems to be a major theme here. What are you seeing in terms of AI implementation?
Well, this is where it gets really exciting, Max. The survey shows that 80% of CPOs— that's a huge majority— are planning to deploy generative AI in some capacity over the next 3 years. But here's the interesting part. Currently, only about 36% have meaningful GenAI deployment.
That's quite a gap to bridge. Let's talk about what's driving these changes. What are the main market trends that CPOs are responding to?
So the top concerns across all regions are rising inflation and challenging market conditions. But what's really interesting is how this varies by region. For instance, in Asia-Pacific, the adoption of GenAI for automation ranks much higher as a priority compared to other regions.
And what about talent? I noticed there's a significant focus on workforce development in the survey.
Yes, this is crucial. Um, about 84% of respondents identified enhancing talent and skills as a priority. And you know what's interesting? They're not just looking for traditional procurement skills. They're seeking people with soft skills like negotiation, communication, and collaboration abilities.
Let's touch on sustainability. It seems to be becoming increasingly important in procurement strategies.
Absolutely. The data shows that 91% of CPOs have aligned their procurement strategies with wider organizational sustainability targets. And decarbonization is huge— 84% of respondents listed it as a focus area. But here's what's interesting— there's still this gap where about 30% are running standalone sustainability initiatives, not linked to organization-wide goals.
That's fascinating. What about regional differences in sustainability approaches?
Well, one striking finding is that 78% of organizations with formal supplier diversity programs are based in the Americas. This is significantly higher than in Asia-Pacific or EMEA, where the percentages are much lower, around 33% and 26%, respectively.
As we wrap up, what would you say are the key takeaways for procurement leaders looking ahead to 2025?
You know, I'd say there are 5 critical areas to focus on. First, get ahead of the market using AI-enabled category management. Second, don't hesitate to implement AI and analytics solutions. Third, invest heavily in talent development. Fourth, commit to long-term sustainability goals. And finally, and this is crucial, focus on strategic business partnering to unlock innovation and value creation.
This has been incredibly insightful, Diana. Thank you for breaking down these findings for our listeners. And to our audience, thank you for joining us for this discussion about the future of procurement on The Procurist. Until next time.
