Did you miss the recent webinar “Procurement Metrics that Matter in 2025,” featuring Andrew Bartolini, founder and chief research officer for Ardent Partners, and Paul Blake, Senior Director, Engagement at GEP?
The webinar unpacked highlights from the eBook The Procurement Metrics that Matter in 2025, featuring the biggest trends and issues facing CPOs today.
Today is part two of a three-part article series that brings forth the key points from the webcast, with a link to the event.
Since 2022, cost savings have returned as the top priority for Chief Procurement Officers (CPOs), a trend that shows no sign of slowing as organizations look ahead to 2025. Despite global uncertainty and fluctuating market conditions, procurement leaders are demonstrating renewed confidence in their ability to deliver measurable value. In 2024, CPOs projected an average of 6.6% in savings and largely met that target. Now, as inflation persists and suppliers continue to raise prices to boost their margins, procurement teams are once again under pressure to extract greater savings while maintaining supplier relationships and supply continuity.
One of the most critical enablers of achieving savings lies in spend compliance. Historically, compliance rates have trailed where they should be, leaving money on the table. Organizations invest heavily in sourcing events, contract negotiations, and supplier enablement, but without full adherence to contracted terms, much of that effort is wasted. Research shows that every dollar of noncompliant or “maverick” spend can carry an additional cost of 12 to 18%, stemming from inefficiencies in pricing, invoicing, or process execution. Raising compliance not only improves realized savings but also strengthens the connection between strategic sourcing and operational execution.
Despite the volatile economic climate, CPOs have raised their savings expectations for 2025. This optimism is not unfounded. Many procurement organizations are benefiting from better data visibility, smarter sourcing strategies, and AI-powered tools that improve decision-making and operational speed. As a result, 51% of CPOs expect a measurable increase in overall value delivery this year. Competitive sourcing, in particular, has gained fresh urgency. The pandemic era’s focus on supply stability discouraged supplier turnover, but as global markets normalize, procurement leaders are once again prioritizing competition and innovation in their supplier base.
Savings, however, are no longer viewed as the result of traditional cost cutting alone. The best-performing procurement teams are achieving results by combining technology, analytics, and process optimization. They use AI to identify sourcing opportunities, reduce process friction, and automate transactional tasks so teams can focus on strategy. These organizations are not simply spending less; they are managing spend more intelligently. Their “spend under management” metrics are climbing — averaging just above 70% — but top-tier performers continue to outperform the pack through deeper visibility, control, and execution discipline.
As procurement matures, the concept of “addressable spend” has also evolved. Many organizations track what they spend and where, but fewer take meaningful action to optimize it. True spend under management is not about passive awareness but about active engagement —challenging incumbent suppliers, driving competition, and enforcing contract compliance. The difference between average and best-in-class procurement lies in execution. Top teams take decisive action to improve value, leveraging automation to centralize intelligence and enable greater strategic focus. Their efforts translate into higher savings, improved compliance, and a stronger alignment between sourcing objectives and business outcomes.
Amid these operational priorities, tariffs have emerged as a new layer of complexity in global procurement. For most organizations, at least part of their supply base operates outside their home country. Over the past few years, the unpredictability of tariff announcements, rate changes, product exclusions, and region-specific trade negotiations has made long-term sourcing plans more difficult to sustain. Procurement teams must now account for geopolitical shifts and the ripple effects of protectionist policies in their cost and risk models.
To navigate this uncertainty, procurement professionals are emphasizing optionality in their sourcing strategies. This means working with suppliers that can offer regional flexibility or produce from alternative sites located in lower-tariff jurisdictions. Evaluating total cost of ownership (TCO) across regions has become essential for understanding the true impact of tariffs on supply chain costs. Such evaluations are most effective when conducted collaboratively across the executive suite, ensuring alignment between procurement decisions and broader corporate strategy. Executive input can also provide foresight into potential policy changes or shifts in trade duration that influence sourcing priorities.
Ultimately, procurement’s mission is evolving once again — from simple savings delivery to strategic enablement under complex global conditions. CPOs are embracing a more data-driven, proactive mindset, one that blends cost discipline with agility and resilience. In an era where tariffs fluctuate, suppliers test their leverage, and inflation remains persistent, procurement leaders who balance intelligence, compliance, and adaptability will define the next generation of savings performance.
