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 Three this week, we explore the wave of uncertainty CPOs face as well as AI’s emergence in procurement.
Despite the uncertainty and near-term challenges brought on by economic and political forces, the state of procurement in 2025 remains strong. A focus on operational efficiencies and AI-powered ProcureTech investments amidst market uncertainties driven by new, fast-changing U.S. trade policies may pull procurement, once again, into the hub of strategic operations. This time, however, the task is more like assembling a plane mid-flight. Strategy, skill, and execution are essential, but so is adaptability, because the conditions are constantly changing and the final destination is still coming into view.
CPO Feedback on the Key Challenges Facing their Teams in 2025
The CPOs interviewed during this research effort were asked to highlight the main challenges facing their teams in 2025. In aggregate, the answers reveal a profession navigating a complex and rapidly-evolving landscape. While specific concerns vary, several overarching themes emerged, highlighting the critical challenges demanding CPO attention and action. These can be broadly categorized as resource constraints, external market volatility/uncertainty, the imperative for technological advancement (including “AI FOMO”), and the ongoing need for talent development and process optimization.
Resource limitations, particularly budgetary constraints hindering investment in needed technology, are a significant impediment for many procurement teams. This lack of funding directly impacts the ability to modernize operations, adopt advanced analytics, and leverage emerging technologies like AI, despite a clear recognition of their potential. Furthermore, the strain of “too much activities” leading to a reactive posture and hindering innovation underscores the challenge of balancing daily operational demands with strategic initiatives. This is often compounded by a lack of adequate resources and, in some cases, limited support from top management or the broader business, leaving procurement teams feeling under-equipped to tackle their expanding responsibilities.
External market volatility continues to be a major source of concern. Navigating newly announced and sometimes fast-changing tariff rates and policies, managing general price fluctuations, and addressing supplier challenges in meeting contractual obligations due to geopolitical factors remain pressing issues. The uncertainty in the international landscape, coupled with inconsistent and unclear trade policies emanating from the United States, has created an unpredictable market that demands constant monitoring and agile strategies to try to allay their potential impact on supply chains and costs.
As noted in the previous chapter, the drive for technological advancement, particularly the integration of AI and procurement automation, is a prominent theme. While there is considerable enthusiasm for leveraging these tools to improve efficiency, gain deeper insights from data, and qualify new sources, overall budgets for many CPOs are tight in 2025. Beyond that, the challenge of aligning data for effective AI implementation and overcoming resistance to change among staff who prefer established processes further complicates the transition to an AI-empowered operation.
Procurement’s Impact on Operations and Results
The procurement function has emerged as a key driver of overall business success, as reflected in the survey data on operational business impact. With 88% of CPOs reporting at least a solid impact in 2025, it is evident that procurement can and does make a difference (see Figure 10).
A notable 16% of CPOs cited a “major, game-changing” impact, indicating that procurement efforts had a powerful influence on strategic business results. The growing use of technology, coupled with tighter sourcing and supplier strategies to drive cost savings and mitigate risks, contribute to enhanced market agility and competitiveness.
Furthermore, 47% of procurement leaders cited a “significant” impact, underscoring the growing recognition of procurement as a strategic business function. Through procurement optimization efforts, such as standardizing processes and improving supplier performance and contract compliance, CPOs and their teams can deliver on cost savings and enterprise efficiencies.
The 37% of CPOs who describe procurement’s impact as solid/ some have room for improvement, by expanding procurement’s enterprise reach and influence and improving execution.
It is interesting to note that in this year’s survey of more than 300 respondents, exactly zero cited “little-to-no” impact or “negative” impact of the procurement function on overall business operations, highlighting how procurement is generally viewed as a strategic, value-adding function.
