Modern organisations can no longer afford to keep procurement in the back office. Procurement shouldn’t stay siloed away in modern organisations. The function is undeniably critical to the success of modern organisations in an increasingly unstable sociopolitical and economic environment. Modern procurement operations touch upon so many areas of an organisation, and with that comes the need to address challenges in an operating environment full of risk and uncertainty.
Synertrade’s General Manager for North America, Roger Blumberg, recently met with procurement leaders in Miami for the CPO ThinkTank 2025, so what did they have to say about the state of the sector today?
Was inflation on the minds of the leaders in Miami?
“Absolutely. Inflation rates are in a state of flux after recent historic rises but the impacts are still being felt across the procurement sector.
Procurement leaders are now looking to financially claw back a portion of the amounts paid to supplies for honouring contractual obligations. In addition, leaders have mentioned benchmarking as a key way of adding accountability to procurement and minimising overpaying. There needs to be an industry-wide rethink around value and how cost savings can be made.
Cost, however, is not always front of mind when it comes to strategic decision-making in modern procurement. There’s a shift towards what’s known as the ‘value method’ where choices are made based on a range of factors such as quality and value proposition. Yes, cost for some will always be the priority, but the value method can lead to better procurement outcomes for all.”
Were the leaders concerned about tariffs and how are they planning to take action to ensure wider resilience more widely?
“Having spoken to various industry leaders – not just at the ThinkTank – over recent weeks, the tariffs are certainly front of mind with emergency meetings having taken place to discuss the ramifications. Regarding the impact mitigation strategies, the evaluation of alternative locations came top, with leaders looking at sourcing from non-tariffed countries to reduce risk. Pre-buying ahead of tariff implementations as well as reshoring operations and rehiring locally followed as other suitable strategies chosen by the leaders.
Supply continuity was also discussed in a wider context with the leaders advocating for risk management and mitigation strategies as part of sourcing. Addressing the source ensures that legacy systems are secure and processes are up to date all help to mitigate overall levels of procurement risk. In addition, developing secondary sources within a supply can provide backup options for when issues arise with the primary sources.“
Is strategic supplier relationship management a lost art?
“There almost needs to be a return to the fundamentals of supplier relationships, ensuring they are paid on time and that the relationship is both transparent and open, with a consistent approach. With the wealth of information available today, measurement should be at the core, so that standards can be upheld and risks identified at the earliest opportunity. Measurement can also ensure that top performers are rewarded for their efforts and that action can be taken against underperforming suppliers. Ultimately, strong procurement partnerships take time to become highly successful and there are no shortcuts to that, even in the age of technology, the human is always in the driving seat.
The adoption of emerging technologies in procurement brings with it a multitude of benefits. However, it also poses a threat to the fundamental skill of supplier relationship management. Due to the involvement of technology in many processes and tools, relationships are sometimes becoming too transactional and interpersonal skills are being lost. There’s now a real impetus for organisations to make skills development much more intentional and to invest in initiatives for their employees to that end.”
How is technology defining the future of procurement?
“Unsurprisingly, AI was top of the conversation with procurement leaders scoping the providers and breadth of capabilities. This links to the data-driven mindset now possessed by procurement professionals and the expectation, which can exist for decisions to be made rapidly. In the case of data-driven decision-making, AI can remove human biases which so often cloud judgements and rapidly accelerate the process to enable true organisational agility.
Furthermore, technology is having a tangible impact on talent acquisition with businesses seeking data literacy and related skills to invest in the right people and help their organisations in this new age. Customers now want supplier dashboards, for example, to see their data at a glance and skilled people are needed to build such solutions.
Technology isn’t going to replace procurement, however, there are important synergies that need to be maximised to aid the future of the sector. The future of procurement will be an important balancing act between technology and human capabilities. While there was no crystal ball at the CPO ThinkTank, it provided some real insights into where the sector is heading and we’ll now just have to wait and see how it evolves in the years to come.“
