A new SAP-sponsored survey of more than 2,000 global executives by Economist Impact reveals a major shift in procurement’s strategic mandate, with geopolitical instability now ranking as the top concern. As pressure mounts to scale AI and sustainability, procurement is moving to the center of enterprise resilience planning.
Geopolitics Takes Center Stage in Procurement Strategy
The study found that 64% of procurement leaders now cite geopolitical risk as their foremost concern for the coming 12 to 18 months, more than doubling from 30% in 2024. This surge reflects a broader redefinition of procurement’s role in enterprise risk management, as firms contend with the downstream effects of tariffs, conflict-related disruptions, and fragmented trade regulations. The “polycrisis” landscape, spanning environmental shocks, shipping bottlenecks, and compliance complexity, has pushed sourcing decisions to the center of corporate continuity planning.
While procurement was once viewed primarily as a cost-focused function, it is now becoming instrumental in managing the operational exposure created by volatile global conditions. Companies are seeking more agile, diversified sourcing arrangements and are increasingly relying on procurement teams to evaluate risk-adjusted total cost, not just price. This strategic recalibration is especially evident in sectors sensitive to trade shifts, such as semiconductors, automotive, and pharmaceuticals.
AI Confidence Grows, but Sustainability Execution Lags
Nearly 90% of respondents said they were confident in their ability to adopt AI to boost efficiency, an indication that digital transformation efforts are gaining traction within procurement. The technology is being applied to demand forecasting, supplier risk scoring, and contract analytics, though implementation remains uneven across industries.
Sustainability also ranks high on the agenda, with 53% identifying it as a top priority. However, translating sustainability intent into measurable action remains a challenge. Many organizations still lack visibility beyond Tier 1 suppliers and are struggling to integrate ESG metrics into supplier evaluation and negotiation processes. While AI and data platforms promise to close this gap, operationalizing sustainability requires procurement to collaborate more closely with legal, compliance, and product design teams.
Governance Models May Need to Catch Up
As procurement takes on expanded responsibility for managing geopolitical exposure and AI-enabled decision-making, the underlying governance structures often remain outdated. Many organizations still treat procurement as a budgetary function, not a cross-enterprise risk integrator. Without formal decision rights or representation in core strategic planning, procurement leaders may be held accountable for outcomes they lack the authority to shape. To fully unlock the value of procurement’s rising influence, governance models must evolve to reflect its role not just as an executor, but as an architect of enterprise resilience.
