Over the last several weeks, Ardent Partners has gone back in time with its “State of Procurement (A Retrospective)” series, featuring executive insights from its previous State of Procurement reports dating back to 2006. It’s now time to shift gears into the present, with a close examination of this year’s report, highlighting the most significant trends and issues facing today’s CPOs.
Our new weekly series brings industry insights around Ardent’s CPO Rising 2025: Navigating Global Uncertainty & Unlocking an AI-Driven Future report. Don’t miss our coverage on all things procurement, including operational strategies, technology adoption, artificial intelligence trends, and supply chain challenges.
In Part Two this week, we explore the wave of uncertainty CPOs face as well as AI’s emergence in procurement.
Uncertainty Is the New Normal
For nearly 60% of Chief Procurement Officers, 2025 is a year marked by a great deal of uncertainty, amidst escalating geopolitical tensions, unpredictable regulatory/trade shifts, and frequent environmental disruptions as renewed threats to operations and performance emerge. This reverses the post- pandemic trend. Just as global supply chains were beginning to stabilize, a fresh wave of disruption has emerged in the form of new tariffs and a rapidly changing U.S. trade policy. These actions and announcements have created a new type of market volatility that has forced CPOs to reassess sourcing strategies and supplier relationships.
Not surprisingly, this renewed wave of uncertainty has created a more challenging environment for CPOs as well. In fact, among the more than 320 CPOs surveyed for this study, not one believes that 2025 will be less difficult than 2024. Correspondingly, a striking 90% expect the year ahead to be even more challenging — an outlook that underscores the persistent challenges in closing technology gaps, retaining top talent, and securing adequate budgets. Many are constrained by limited insight into their supply chains and a lack of tools to rapidly respond to shifting tariffs, evolving regulations, and geopolitical shocks. A mere 10% of CPOs view 2025 as equally challenging, a perspective likely shaped by earlier investments in talent, processes, and technology that have enabled a more adaptive and resilient approach to managing uncertainty.
Despite the challenges and uncertainty posed by 2025, CPOs have a fair amount of swagger and confidence in their teams, with just over half (51%) expecting their teams to deliver more this year than in 2024. This indicates that many procurement teams have taken on a more strategic role within their organizations by introducing cost-saving initiatives, managing supply chain risks, and leading efforts in digital transformation.
Budget and Technology Are Big Obstacles on the Road to Procurement Performance
New tariffs have quickly become one of the most disruptive forces facing procurement leaders in 2025. But reacting to them is easier said than done. While the stated policy goals of the U.S. tariffs are to reshore manufacturing and reduce reliance on foreign suppliers, shifting production to the U.S. is a long-term effort that could take years, even decades, to realize at scale. In the short term, procurement teams are left navigating immediate cost increases and supplier instability without viable alternatives. The challenge is compounded by uncertainty in the capital markets. As investors and businesses speculate on the longevity and intensity of these new tariffs, it becomes increasingly difficult for CPOs to build long-term sourcing plans or confidently commit to new supplier strategies.
While global disruptions continue to challenge procurement leaders, internal barriers pose sizable obstacles to success this year. The top challenge for CPOs heading into 2025 is budget constraints, cited by 38% of respondents. Limited funding is hindering investment in modern technology and key talent — both essential for meeting today’s business demands. Close behind are misaligned processes and systems (32%) and missing or incomplete technology (30%), revealing a deeper issue: Procurement’s digital infrastructure remains underdeveloped in many organizations.
Market complexity is not far behind, with 30% pointing to external conditions like inflation, tariffs, and global instability. And at 25%, difficulty engaging business stakeholders rounds out the top five, reflecting procurement’s ongoing struggle to gain influence across the enterprise.
Taken together, these challenges reinforce the enduring procurement paradox first identified in the inaugural CPO Rising report nearly two decades ago: Procurement sits at the center of enterprise activity, yet too often remains at the edge of enterprise priority. The function is expected to deliver strategic impact, but is frequently asked to do so with legacy tools, lean teams, and minimal investment. If procurement is to meet the moment — and the future — it must be equipped accordingly. That means targeted investment in people, systems, and especially AI to unlock the agility and insights it needs to excel.
AI Adoption: A Strong Start with Room to Accelerate
Despite the noise, headlines, and fast-moving hype cycle, AI adoption in procurement is starting to make meaningful inroads. Nearly half of all CPOs report using AI in some form today — a clear signal that the age of intelligent procurement is underway. While only 8% say AI is embedded in their Source-to-Pay (S2P) suites, this number is expected to rise as solution providers continue to bake in machine learning, natural language processing, and other core AI capabilities — often behind the scenes.
Another 32% of CPOs are leveraging AI through individual applications, either integrated or operating in parallel, which means many organizations are building valuable AI muscle — even if they do not always recognize it. It should be noted that general AI awareness and understanding still varies widely in the market. Some CPOs may associate “AI” solely with the newer wave of generative AI and large language models, and may not realize that more traditional forms of AI are already supporting use cases in sourcing, supplier risk, and contract analytics.
Of course, more progress is expected since more than half of procurement organizations are not using AI, although most (49%) non-users plan to within a year. The good news is that the AI train is still at the station, and CPOs still have a window of opportunity to climb aboard.
Expectations of AI Are Rising Fast
While AI adoption in procurement is not yet universal, belief in its potential certainly is. An overwhelming majority of CPOs expect AI to deliver either a significant (50%) or transformational (23%) impact over the next two or three years — and that sense of potential is accelerating. In fact, the number of CPOs who see AI as truly transformational has jumped by 32% in just the past year.
As more CPOs explore AI’s capabilities, expectations are scaling accordingly — and solution providers are rising to meet them. From autonomous sourcing and AI-powered negotiations to advanced contract analytics and next-gen spend analysis, intelligent tools are quickly evolving. The result: higher levels of automation, smarter decision support, and better user experiences. This all signals that AI is poised to fundamentally reshape how procurement operates.
AI as a Strategic Lever for Productivity and Insight
In an era where procurement is under constant pressure to deliver more with less, CPOs are placing strategic bets on AI to expand capacity, unlock efficiency, and elevate performance. For many, the first frontier is productivity. By automating essential, but time-consuming tasks like PO creation, low-value RFQs, and supplier onboarding, AI offers a clear path to reclaiming hours in the workplace and tackling more important projects. Even more complex workflows, such as building sourcing events or developing category strategies, are beginning to benefit from intelligent automation, enabling procurement teams to manage a greater share of enterprise spend without expanding headcount.
It’s no surprise, then, that when asked to identify their top two goals in using AI, 80% of CPOs cited increasing productivity. An additional 40% view AI as a means to improve efficiency, specifically in response to tightened budgets or workforce reductions.
Beyond automation, CPOs are looking to AI to sharpen their strategic lens. Nearly half (49%) expect AI to improve analytics by delivering faster, deeper insights and better decision support. Other top goals include identifying and executing on savings opportunities (31%), and enhancing forecasting and predictive capabilities (27%). From boosting output to driving smarter decisions, AI is fast becoming a tool CPOs are counting on to transform their departments into a more agile, data-driven function.
