Procurement at the crossroads: From the back office to the front burner

Procurement has never faced more pressure—or more opportunities—to deliver new value for the company.

As the C-suite pushes the enterprise to move faster and become more resilient, procurement is being pulled to the center of multiple transformation efforts, from smarter sourcing and delivery orchestration to AI enablement and risk resilience.

Meeting these expectations demands more than cost control and contract management. Procurement needs stronger capabilities, broader influence, and deeper collaboration with internal functions and external service providers. The mandate is clear: Procurement must lead across a more complex, fast-moving ecosystem.

At the same time, procurement itself is under scrutiny. With automation, platform delivery, and AI-enabled services reshaping how work gets done, many organizations are rethinking how the operation is structured, staffed, and supported. That includes evaluating how next-generation managed services can help elevate procurement’s impact.

To meet this moment, procurement leaders need a clear strategy to evolve. Here are five priorities to help get there.

1 | Think Strategically, Deliver Relentlessly

Procurement must become the company’s strategic command center—and fast. But most teams are still organized like cost centers. As change accelerates across functions, leadership is asking procurement to reimagine sourcing strategies, integrate and scale technology-enabled services, manage delivery risk, and drive measurable outcomes.

But the push toward strategic alignment doesn’t reduce the pressure to execute. The most effective teams are doing both: shaping business direction while delivering day-to-day results on cost, speed, and performance.

Key considerations:

Link managed services strategies directly to business priorities and value creation.
Engage earlier in planning cycles to influence delivery design and implementation.
Structure governance models to support innovation, agility, and control.

Key stat: 96 percent of procurement functions are making structural changes—yet only 22 percent of organizations are proactively planning for disruption.¹

2 | Empower AI and Automation

The service delivery model that has dominated procurement’s agenda for the last few decades—move transactional work offshore, save money—feels like it’s changing overnight. As automation and AI become embedded in how work gets done, procurement teams must demand a new level of services—built to enable these technologies and unlock broader organizational value.

The leading managed services providers are bringing technology expertise and scalable platforms that include AI and automation from Day 1. This fundamental shift is redefining how procurement leaders are evaluating their managed services providers, putting a premium on technology expertise as well as proven industry and domain experience.

Key considerations:

Prioritize tech-enabled providers with automation, analytics, and AI at their core.
Move beyond FTE-based pricing to outcome-driven and platform-based models.
Evaluate providers on speed, adaptability, and innovation, not just cost.

Key stat: 9 in 10 executives say managed services must be delivered by a new class of providers without a transactional outsourcing heritage to be effective.²

3 | Rethink Contracts, ASAP

Given the rapid changes in managed services models, procurement teams must quickly update contracting strategies and how best to engage with leading providers. Traditional agreements, designed for static scopes and predictable tasks, are a mismatch for a service delivery environment that is increasingly defined by automation and AI—and a host of complex new risks and considerations that come with these paradigm-changing shifts.

Today’s deals need to move faster, flex more easily, and support shared outcomes. That means, for example: embedding contract triggers that more easily change terms based on defined outcomes; creating modular options that can scale up or down based on changing needs; and innovation incentives that allow both company and provider to co-invest in ongoing technology enhancements. Most important, amid all of this “new” and “change”: Procurement leaders must regularly review how deals are governed, tracked, and adjusted to stay ahead of the complex new risks that accompany today’s fast-moving innovations.

Key considerations:

Build flexibility into contracts to accommodate volume shifts, innovation, and automation.
Include outcome-based metrics tied to performance, rather than just SLAs with fixed inputs.
Use modular scopes to manage change without renegotiating full agreements.

Key stat: 52 percent of procurement teams are adding economic trigger clauses to contracts, and 41 percent are breaking large deals into smaller, more flexible components.¹

4 | Modernize Your Own Talent

Procurement is facing a significant talent disruption. The function’s responsibilities are changing quickly, but most teams haven’t caught up. Legacy roles built around cost and compliance won’t support a mandate that now includes AI fluency, data-driven decision-making, and cross-functional leadership.

That capability gap isn’t just a risk, it’s an identity crisis. High-performing talent won’t join (or stay) in a function that lacks modern tools, clear impact, or a path to grow. To lead the next era of procurement, organizations need to rethink who they hire, how they work, and what kind of environment they build.

Key considerations:

Redefine roles around data, platforms, and business integration.
Create clear growth paths that reflect the function’s new mandate.
Equip teams with the tools and visibility that today’s talent expects.

Key stat: 95 percent of enterprises plan to increase AI investment—but many procurement teams still lack the digital skills to lead that transition.¹

5 | Move Faster

The reality of 2025 is clear: Waiting is the biggest risk. Faced with ongoing trade uncertainty and delivery disruption, many procurement teams are holding back—delaying decisions, seeking direction, and scaling down initiatives as the whole organization awaits that magic word: “clarity.”

But the companies elevating procurement and embracing the opportunities of modern service delivery aren’t waiting for any magic. They’re building new capabilities, testing flexible models, and preparing for the next wave of change. Procurement doesn’t need certainty. It needs confidence, and a plan to lead in today’s fast-moving business environment.

Key considerations:

Treat volatility as a reason to act, not an excuse to pause.
Accelerate scenario planning across sourcing, delivery, and compliance.
Pilot AI- and platform-enabled solutions to build readiness and resilience.

Key stat: The ability to deliver strategic value and leading technology expertise are now the top priorities for executives in selecting a managed services provider: More than 8 in 10 want providers to bring AI, strategy, and consulting capabilities.²

Steps you can take to establish a standout ESG M&A due diligence program:

Identify your motivation for the program

Develop a clear ESG strategy

Secure appropriate resources and assign responsibilities

Collaborate with external experts

Link ESG M&A due diligence to ESG strategy

Develop your ESG M&A due diligence framework

Perform ESG M&A due diligence procedures

Link ESG M&A due diligence findings to post-closing actions

Monitor and report findings to stakeholders

Continuously improve the due diligence process

Footnotes

“Tariffs lit the fuse for bold enterprises to automate,” HFS Research and KPMG LLP, July 2025.
“Accelerating business transformation,” KPMG LLP, fall 2024.

KPMG helps procurement leaders modernize their managed services strategies to meet today’s speed, complexity, and technology demands. From reshaping service delivery models to embedding AI and automation efficiencies into contracts and governance, we work with clients to build smarter ecosystems that drive long-term value. Learn how KPMG can help your procurement team lead with clarity in a rapidly shifting services economy.