THE YEAR IN REVIEW

What Procurement in 2025 Taught Us

By Group CPO

Across Australia, CPOs entered 2025 with cautious optimism, navigating inflation cooldowns, geopolitical uncertainty, workforce reshuffles and accelerated digitisation. What emerged was a profession under pressure, but also on the edge of unprecedented opportunity.

As one CPO in financial services put it:

“Procurement’s seat at the table is no longer the goal. Influence at the table is.”

This year’s review reflects that shift: from transactional to strategic, from reactive to predictive, from operational function to enterprise value engine.

And as we look ahead to 2026, the organisations winning today are those whose procurement teams have evolved faster than the market.

2025 YEAR IN REVIEW: THE SIX FORCES THAT SHAPED THE PROCUREMENT LANDSCAPE

1. Talent turbulence and the rise of “Strategic Generalists”

2025 saw intense mobility in procurement teams. Roles were refilled, re-scoped, redefined or left vacant far too long.

Our research shows three clear trends:

• Demand surged for strategic generalists who combine commercial acumen, business partnering, risk, and category expertise.

• Pure tactical roles declined, replaced by hybrid positions that emphasise influence, analytics and enterprise thinking.

• CPOs struggled with time to hire, citing capability gaps and candidate salary expectations as major barriers.

Retention became both a challenge and a priority. Capability uplift became a non-negotiable. And the question many CPO’s asked by Q4 was:

“Do I have the team I need for the next two years, not the last two?”

2. AI moved from curiosity to critical operating layer

2025 was the year procurement embraced AI not as a tool, but as a capability layer.

Use cases matured into:

• Automated supplier onboarding

• Predictive demand and risk models

• AI-augmented negotiation scripts

• Smart contract analytics

• Real-time supplier performance dashboards

But AI also introduced new governance burdens including data quality, ethics, cyber standards and capability gaps. Training procurement teams to coexist with AI will remain a 2026 priority.

3. Supplier risk became the CPO’s shadow role

Disruption didn’t hit at the scale of COVID, but it did hit relentlessly:

• Freight volatility

• Cyber breaches

• Insolvency spikes

• Geopolitical tensions

• Extreme weather events

• Critical resource shortages

CPOs were forced to build multi-layered resilience programmes.Risk became a weekly governance item, not a quarterly one.

Boards are now asking:

• “Do we know our tier-2 and tier-3 exposure?”

• “How quickly can we reroute supply?”

• “Are our suppliers financially healthy?”

As one utilities CPO summarised: “We moved from supply chain management to supply chain defence.”

4. Value creation became the new north star

Savings remained important, but not defining. Leaders shifted to value levers such as:

• Revenue enablement

• Working capital improvements

• Risk mitigation quantification

• Innovation sourcing

• Customer experience impact

The most successful organisations reframed procurement’s mandate from cost-cutting to business contribution.

5. ESG Expectations Hardened Into Compliance

For many companies, 2025 marked the year ESG stopped being aspirational and became contractual.

Those CPOs faced:

• Tougher modern slavery enforcement

• Scope 3 reporting pressure

• Supplier decarbonisation requirements

• Circularity KPIs

• Indigenous procurement mandates

Supplier transparency moved from “nice to have” to prerequisite to trade.

Whilst many are still at the first step of ESG capability building, 2026 will require deeper integration of sustainability into category strategies, supplier scorecards and contracting frameworks.

6. The Procurement Brand a Differentiator

Internal influence became the differentiator between high-performing procurement teams and stagnant ones.

CPOs invested in:

• Stakeholder engagement plans

• Internal storytelling

• Executive presence coaching

• Leadership visibility

• Cross-functional alignment

Procurement’s brand was once an afterthought, has now became a lever for impact.

One CPO said:

“If the business doesn’t know what you’ve delivered, you didn’t deliver it.”