The past few years have been something of a renaissance for procurement. The department has moved firmly out of the back office — even getting a seat in the boardroom in some organisations. The purchasing function is no longer a purely tactical executor of purchase orders on a one-track mission to contain costs.
Procurement — like IT and supply chain — is in an era of strategic transformation. This evolution is being underpinned by new technologies and operating models, as well as driven by market and environmental pressures. “2025 will no doubt present procurement teams with a fresh set of challenges and opportunities,” says Amy Worth, Director & General Manager of Amazon Business UK. “By focusing on supplier diversity and supply chain resilience, businesses can put themselves in the best position to proactively respond to these changes.”
The fall of globalisation
Although this trend has been unfolding for several years at this point, 2025 will be the year that efforts to de-globalise supply chains and source-to-pay streams start to take real shape.
Efforts to do so are especially timely, with the recent readjustment of regulations between the UK and EU driving up costs for businesses trading across the channel, especially small and medium sized organisations. In the US, the incoming Trump administration has spent the past few months threatening larger and larger tariffs on imports from the country’s biggest trading partners. China, in particular, has been singled out, with President Trump claiming he will impose a 60% tariff on all Chinese goods at the point of entry to the US.
In response, Worth notes that she expects buying departments to prioritise local procurement, as well as supplier diversity. “Supplier diversity will be a defining focus for the procurement industry,” she says, highlighting the impact it has on supply chain resilience. “By sourcing from a more diverse pool of suppliers, businesses can better manage supply chain disruptions and protect themselves from instabilities in the global supply network.”
At the same time, she says, 2025 will see businesses reevaluate their supply chains, opting for a more local supplier base to cut down on transportation costs, as well as reducing carbon emissions — the other key trend Worth sees shaping procurement this year.
The non-negotiability of ESG
Speaking of trends that have taken a decade or more to take shape, the need for Environmental, Social, and Governance (ESG) reform in the global supply chain has intensified along with the climate crisis and rising inequality around the world.
Amazon (a company owned by the world’s second-richest man and shamed with an “F” grade by the Carbon Disclosure Project in 2022 for accounting for the carbon emissions of just 1% of the goods sold through its platform) conducted recent research that found the majority of people are already making changes to reduce their environmental impact. “By capitalising on employees’ natural values and interest in sustainability, businesses can use the procurement tools available to upskill staff and put ESG at the forefront of operations to drive change across the business,” says Worth. “Sustainable procurement will be a key priority for all businesses in 2025 as they look to meet tightening regulations and evolving consumer expectations… Procurement companies are responding to this trend and are now developing tools to help businesses more easily identify local suppliers and improve the diversity of their supply chain.”
AI will be big (because of course it will)
Artificial intelligence (AI) continues to be a juggernaut of investment, hype, (carbon emissions), and controversy. The technology will continue to affect budget allocation, operations, and organisational strategy throughout 2025 and beyond — and the procurement function is no exception.
“Procurement, like many sectors, is going through the process of evaluating how AI could be used effectively. Next year, we will see more procurement teams embrace AI, but particularly through the automation of routine tasks, increased spend visibility and the improvement of risk management,” Worth says. She adds that AI and machine learning have the potential to improve businesses’ decision-making capabilities with real-time analysis. “By providing procurement teams with a comprehensive view of budget allocation, as well as real-time updates on suppliers, inventory and supply chains, AI’s predictive power allows organisations to stay ahead of issues, ensuring smooth operations and better risk management,” she says. “As business buyers have an increasing interest in personalised experiences, procurement teams should also look to embrace tools such as natural language processing (NLP), pattern recognition, cognitive analytics, and large language models (LLMs) to further streamline processes, enhance decision-making, and optimise operations.”
