5 Procurement Industry Trends to Watch in 2025

In recent years, the procurement industry has undergone unprecedented transformations driven by the adoption of digital transformation, big data, and advanced technology like artificial intelligence (AI), machine learning, and automation. While these advancements have led to improved efficiency, cost savings, and enhanced strategies, they’ve also made procurement processes more complex than ever before.

Staying on top of the ever-changing procurement landscape in 2025 is paramount to staying competitive. As the procurement industry and supply chains become more tech-driven and complex, one fact is clear: companies that embrace industry trends will be best positioned to thrive in the challenging procurement landscape of 2025 and beyond.

Here are five key trends that will shape procurement and supply chain management in the coming year.

AI and Automation Will Continue To Transform The Procurement Industry

2024’s biggest trend will continue to dominate the procurement industry as artificial intelligence (AI), machine learning, and automation are expected to make even deeper inroads into supply chain processes. According to Gartner, 50% of large global companies are expected to implement AI and advanced analytics in their supply chains in 2025. Additionally, in 2025, global spending on digital transformation tools is projected to total $5.74 trillion, a 9.3% increase from 2024.

Procurement teams are already using AI-powered tools to analyze vast amounts of data to identify patterns, predict trends, and recommend actions. But as procurement technology continually advances, these tools will offer more powerful benefits than ever before:

• Enhanced data analytics for real-time insights and data-based decision-making
• AI-powered spend analysis to identify inefficiencies and reduce costs
• Forecasting and demand planning to enable better inventory management and supplier selection
• Risk management through continuous monitoring of supplier data
• Compliance monitoring to adhere to procurement regulations

Automation will also continue to gain momentum in 2025, reducing manual effort by nearly 50% and streamlining repetitive, time-consuming tasks to enable faster and more accurate operations. By automating routine work, procurement professionals can focus on high-impact tasks like strategic sourcing and relationship building with key suppliers.

Sustainability Will Be a Top Priority for Procurement Teams in 2025

Sustainable procurement initiatives will continue to grow in importance in 2025. Within procurement, sustainability is the process of integrating environmental, social, and governance (ESG) goals into procurement, purchasing, and supply chains, which helps build a circular economy. Sustainability means considering social and environmental factors alongside purely financial and economic ones.

The top sustainability goals among procurement companies will include lowering carbon emissions, reducing waste across procurement workflows, and taking a more responsible approach to sourcing and supplier selection. This trend comes as governments, environmental organizations, and consumers increasingly expect companies to enact environmentally conscious procurement processes.

Sustainable practices have been building steam in the past few years, and it’s estimated that 51% of global businesses now include sustainable initiatives in their procurement processes. The benefits of embracing sustainable procurement initiatives include:

• Enhanced brand perception
• Increased revenue growth
• Improved efficiency
• Significant waste reductions
• Minimized business risks
• Contributing to overall supply chain resilience

However, as in the past, finding suppliers with sustainable practices will continue to be a challenge for procurement teams striving to achieve ESG goals.

Navigating Geopolitical and Economic Uncertainty: Why Enhanced Risk Management Strategies Will Be Essential in 2025

Faced with geopolitical tensions, economic uncertainties, the growing complexity of today’s global supply chains, and the closure of many suppliers, developing strategies to proactively identify, assess, and mitigate potential risks will be essential for procurement teams in 2025.

To get ahead of risks, procurement leaders are expected to put heavier reliance on advanced AI-driven analytics to better analyze supplier data, market trends, regulatory and compliance requirements, and internal processes. Predictive analytics will offer foresight into potential supply chain disruptions and give procurement teams the data-driven insights needed to make proactive decisions. AI technology will also be used to conduct risk scenarios to assess how the supply chain will respond to various challenges.

To mitigate these risks, procurement leaders will need to embrace new, predictive, and prescriptive technologies. Procurement teams will also increase investment into diversified sourcing, reshoring, and creating robust contingency plans to ensure a swift response to unexpected challenges and maintain full operational capacity.

Procurement teams will also continue to leverage supply chain mapping to gain a comprehensive understanding of the flow of data, materials, and payments within their supply chain. This approach provides organizations with the detailed insights needed to analyze their operations at a granular level.

E-Procurement Will Go Mainstream in 2025

Electronic procurement (also known as e-procurement) is another rapidly growing trend that is expected to go mainstream in 2025. In a nutshell, e-procurement involves buying and selling supplies, equipment, and services over the Internet. It streamlines the entire procurement process by centralizing and automating interactions between buyers and sellers. Ultimately, e-procurement improves the speed and efficiency of procurement activities and offers scalability and real-time collaboration.

E-procurement uses networked systems and web interfaces for supply chain operations. It utilizes a supplier’s closed system, so only registered customers can use it. E-procurement implementation creates a direct connection between the supplier and buyer, helping to optimize business-to-business (B2B) and business-to-consumer (B2C) processes like emails, data entry, invoice management, purchase orders, and bids. Other benefits include:

• Optimized supplier relationship management
• Improved transparency and compliance
• Cost savings and efficiency
• Streamlined procurement processes
• Real-time data and analytics
• Scalability and business future-proofing

E-procurement adoption will continue to grow. It’s estimated that 87% of organizations are now using e-procurement technology, and 75% of organizations plan to implement e-procurement tools within the next four years.

Strategic Sourcing and Supplier Collaboration Will Create Value For Organizations and Suppliers

Strategic sourcing is shaping up to be one of the standout procurement trends for 2025. Strategic sourcing prioritizes developing long-term, value-driven relationships with suppliers rather than just chasing the lowest price. This trend reflects the ongoing industry shift from prioritizing cost savings to creating more strategic value for both companies and suppliers.

In 2025, businesses will focus on building strong partnerships with suppliers to enhance reliability, drive innovation, and manage risks more effectively. Strengthening supplier partnerships can help improve supply chain resilience, ensure competitive pricing, spark co-innovation in procurement practices, and foster loyalty with trusted partners. Strategic sourcing will also play a key role in helping procurement teams meet their sustainability goals by partnering with suppliers who share their ESG values.

This move toward deeper collaboration marks a shift from transactional relationships to strategic, long-term partnerships that drive mutual growth and efficiency. To make these relationships more effective, procurement teams will rely on supplier relationship management (SRM) software to streamline communication and simplify information sharing with their suppliers.

Arkestro Is At The Forefront of Procurement Industry Advancements

As procurement moves towards more integrated and intelligent systems, Predictive Procurement is also poised to play a transformative role in the procurement industry in 2025.

As a procurement industry leader, Arkestro is at the forefront of dynamic digital procurement transformations. Our innovative platform has helped organizations increase efficiency, improve supplier relations, and make quicker and better-informed decisions through data-driven insights. Arkestro ensures organizations achieve optimal procurement outcomes by staying ahead of market and industry trends.

Interested in learning more? Reach out to our team of experts today to see how our next-generation platform can help you improve efficiency, achieve cost savings (16% within the first 60 days), increase your organization’s supply chain resilience, and help you stay ahead of 2025’s big trends.