Numerous forces are converging to deeply influence the future trajectory of procurement. Faced with uncertainty over their pace and impact, procurement teams should brace themselves for a myriad of potential scenarios.
In this report we examine how these forces may affect procurement teams and discuss how procurement leaders can respond—and the capabilities they will need to thrive. Our insights are augmented by findings from the KPMG 2023 Global Procurement Survey (PDF 3.1MB) of 400 senior procurement professionals from a range of industries.
Procurement leaders have a real opportunity to recast their functions as strategic influencers, enabled by generative AI and automation, to drive high-performing, sustainable purchasing activity.
Five strategic imperatives to address signals and seize emerging opportunities
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Build a resilient global footprint
Through redundancy and regular risk assessments, increasing reshoring/nearshoring, and reducing sole sourcing, with enhanced supply chain transparency and flexible supplier relationships.
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Embed big data and generative AI to accelerate automation
Dramatically speeding up data processing and analysis, generating insights that drive innovation and enhance productivity and decision-making.
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Reaffirm commitment to sustainability and ESG
Building a roadmap to guide investment in a transparent, sustainable supply chain and comply with ESG regulations.
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Drive continuous performance improvement, harnessing data and analytics
To optimise costs, service levels, and working capital, and rethink category strategies, enforcing vendor contracts and reviewing contract pricing formulas.
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Build, train, and retain tomorrow’s workforce
By offering strategic roles with accelerated advancement opportunities, investing in in supplier relationship management and TPRM skills, and automating category management.
Key findings
77 % of procurement executives say risk of supply disruption is a critical external challenge.
Predictive analytics and generative AI are the top two technologies likely to have the biggest impact on procurement functions over next 12-18 months.
66 % of procurement executives say increased regulatory and ESG demands are heavily influencing strategic sourcing in the next 3–5 years.1
Procurement executives say developing ESG capabilities is their number one priority in the next 3–5 years.
Implementing data analytics is the single most important activity over the next 12–18 months.
41% of procurement executives rate their organisation’s category management as “highly mature".1
Factors that affect procurement’s level of strategic influence
The diagram below explores how the extent of automation and the role of procurement as a strategic influencer vary across different dimensions such as geography, industry, and supply chain. It offers a roadmap to navigate the evolving procurement terrain, where the integration of technology and human expertise is essential to achieve resilience, innovation, and strategic alignment in supply chain management.
Automated process
Geography
Where regulatory reporting is less mature, compliance can be largely automated.
Global scale
Companies with local, low-complexity supply chains are less likely to need strategic decision-making.
Industry
In Consumer & Retail, high automation can drive efficiency and lower transactional costs.
Labour markets
Where price of labour is high (e.g. Australia and Japan) automation can help reduce procurement function costs.
Strategic influencer
Geography
Tougher regulations require greater involvement from procurement. Procurement should identify any focus on national production (e.g. Middle East) and prepare for higher scrutiny.
Global scale
Global supply chains are most susceptible to disruption and may need friendshoring/nearshoring/onshoring.
Industry
Highly regulated sectors need strategically oriented procurement teams. Where safety is a high priority, procurement cannot be purely automated.
Geopolitics
Supply chains subject to geopolitical disruption need strategic sourcing to maintain resilience.
Future of procurement
Know how to calibrate the right blend of strategic decision-making and automated support processes.
How KPMG can help
KPMG Procurement professionals can develop strategies for procurement, design operating models and enable technology to drive value over time. KPMG firms take a multidimensional approach that anticipates continuous change in technology, market conditions, and organisational priorities – to help you along each step of this transformational journey.
