The trends shaping procurement in 2024 are pushing businesses to rethink their strategies and adopt new practices.
Procurement is no longer a back-office function hidden behind purchase orders and supplier negotiations. In 2024, it’s at the forefront of shaping business strategies, driving innovation, and supporting sustainability efforts. Procurement is changing, and this is a reflection of larger shifts in the corporate world, where technology, agility, and transparency are all essential to success.
Imagine a procurement team that doesn’t just react to needs but anticipates them, guiding the company through the complex nature of supply chains, regulations, and market demands. This strategy is becoming the standard rather than the exception, as companies recognise that procurement is about adding value rather than just saving money.
As the world becomes more interconnected, the expectations on procurement are rising.
- Suppliers are not just vendors; they’re partners in innovation.
- Sustainability isn’t just a checkbox; it’s a core requirement.
- Technology isn’t a luxury; it’s a necessity.
The trends shaping procurement in 2024 reflect these shifts, pushing businesses to rethink their strategies and adopt new practices that are in line with the demands of a rapidly changing environment.
Whether you’re in a leadership role or on the ground making daily decisions, understanding these trends is essential for staying competitive. Procurement is evolving, and with it, the skills, tools, and strategies required to excel are also changing. The coming year will present both problems and possibilities, and companies that will accept the trends and adapt will most probably thrive in this new world.
GenAI
When talking about procurement trends, GenAI has been the topic that has managed to get the attention of every industry, and not just procurement.
This, of course, is mainly due to the positive vibe around this new tech that shows a more supportive perspective rather than an experimental one which was the case in the past with certain new technologies. And that is for a reason.
The AI market in 2023 reached a value of $177 billion. Statista says that in 2024, this value is projected at US$184 billion. The market size is set to project a CAGR of 28.46% by 2030 which will result in a market volume of $826.7 billion.
When speaking of influence, Goldman Sachs states that generative AI has the potential to automate nearly 300 million jobs while increasing global GDP by 7% in 10 years.
This is a significant indication of the transformative impact that generative AI is expected to have across industries. The potential for automation and efficiency gains is immense, yet it also introduces a new set of challenges and opportunities for businesses.
The adoption of GenAI in procurement is an inevitable process, and businesses should think of what is the best approach to making it happen. The technology’s transformative potential is widely acknowledged, yet the challenge lies in figuring out the most effective and secure ways to implement it. While many in this segment are eager to implement AI sooner rather than later, the industry as a whole is still making the required preparations. GenAI is clearly on the horizon for procurement, but the industry is cautious (just the right amount), ensuring that all of the components are in place to maximise its benefits.
Supplier relationship management
Another of the procurement trends that we need to address is supplier relationship management (SRM). The rising importance of supplier relationship management is something the industry cannot ignore. The shifting dynamics of global supply chains demand more from procurement than ever before, and SRM is increasingly recognised as a critical lever for achieving resilience and innovation.
Consider this: SRM was the second most important strategic goal of procurement teams, a PWC survey from 2023 states. Another 2023 survey from Deloitte, states that 61% of CPOs claimed that improving their supplier collaboration was their number one strategy for creating value.
While the importance of SRM and enhanced supplier collaboration in addressing new challenges is widely recognised, the procurement function still has a long way to go.
Despite the general consensus on the benefits of closer supplier partnerships—such as increased agility, cost savings, and innovation—many procurement teams continue to struggle with fragmented processes, inadequate technology, and a lack of strategic alignment.
The end game: Procurement must shift from a transactional perspective to a more integrated, strategic approach, cultivating deeper, more collaborative connections that can produce long-term value for the business.
Risk management and resilience
The third place of the procurement trends belongs to risk management and resilience. The last few years have seen an increased number of events that directly influence the procurement market and pose risks of disrupting the normal functioning.
The global landscape is increasingly unpredictable, with supply chain setbacks, geopolitical tensions, and environmental challenges becoming the new normal. As a result, companies are more oriented towards building resilience that will help their procurement strategies fend off potential threats and ensure business continuity.
Traditional procurement risk issues, like supplier dependability or price volatility, are not the only ones out there. These days, procurement risk covers a broader spectrum of topics, such as the effects of climate change, regulatory compliance, and cybersecurity threats. Teams in charge of procurement must be prepared to spot such risks early on and create plans of action to deal with them before they become serious problems.
One key aspect of modern risk management is the use of advanced analytics and AI to anticipate and respond to disruptions. These technologies allow companies to monitor their supply chains in real-time, assess the risk levels of different suppliers, and model various scenarios to understand potential impacts. This enables companies to make informed decisions quickly, reducing the likelihood of costly interruptions.
Resilience also means diversifying the supply base. Companies are increasingly looking to expand their network of suppliers, sourcing from multiple regions to avoid over-reliance on any single source. In addition to distributing risk, this diversification increases responsiveness to unforeseen obstacles.
Sustainability
When speaking of trends in procurement, we must not ignore sustainability. In procurement, sustainability is a topic that everyone is talking about in 2024. In fact, from a business perspective, it is steadily becoming a “fundamental” requirement.
You might ask why?
Because, businesses are under increasing pressure from regulators, consumers, and investors to adopt greener practices. This gradual shift is pushing procurement teams to rethink their strategies, focusing on sourcing materials and services that will align with environmental and social governance (ESG) criteria.
The demand for sustainable procurement means that companies are looking beyond the immediate cost of goods and considering the entire lifecycle of their products. This involves selecting suppliers who prioritise eco-friendly production processes, reduce waste, and minimise carbon footprints. Green procurement isn’t just about compliance; it’s about creating a supply chain that supports long-term environmental and economic sustainability.
Technology is playing a critical role here as well. Procurement platforms now offer tools that help companies measure and track the sustainability metrics of their suppliers.
Companies can implement various solutions that evaluate their suppliers’ entire carbon footprint. This can be accomplished using platforms that specialise in delivering carbon footprint metrics.
These insights enable more informed decision-making and ensure that sustainability goals are met without compromising on quality or cost-effectiveness.
However, implementing sustainable procurement practices isn’t without challenges. It requires a deep understanding of the supply chain, the ability to collaborate closely with suppliers, and often, a willingness to invest in new technologies and processes. The companies that will manage to pass through all of these phases, will meet regulatory demands and gain an advantage by aligning with the growing consumer preference for sustainable products.
Talent and skill development
As procurement continues to evolve, so do the skills needed to thrive in the field. In 2024, the emphasis on talent and skill development has never been more important. The growing use of digital tools, the increasing complexity of supply chains, and the heightened focus on sustainability are all pushing procurement professionals to expand their expertise beyond traditional practices and develop a more diverse skill set.
Therefore we come before the perfect picture of today’s procurement teams.
Today’s procurement teams need to be agile, tech-savvy, and strategically minded. The ability to analyse data, negotiate with suppliers, and manage risks is not merely enough. Professionals now need to understand and use AI, advanced analytics and various tools that optimise procurement processes. Moreover, the growing need of sustainability means that procurement specialists must also be knowledgeable about ESG criteria and how to integrate them into sourcing strategies.
This shift is prompting companies to invest in continuous learning and development programs. Strategic thinking, leadership, and new technology training are becoming routine practices in organisations as they realise how much their team’s performance affects the procurement department. In addition, there is a growing emphasis on soft skills such as communication, collaboration, and adaptability, which are essential parts of having a modern procurement team.
The talent landscape is also changing, with a greater focus on diversity and inclusion. Companies are seeking out diverse perspectives and backgrounds to bring fresh ideas and approaches to their procurement strategies. In the end, a diverse staff is better suited to handle the difficulties of a global supply chain and spur innovation, which is why this trend goes beyond simply hitting diversity goals.
A more modern visual approach
Last but not least, procurement is undergoing a transformation in another more visual aspect as well. In fact, it is moving away from the traditional image of a stiff, corporate environment to a more dynamic and inclusive space.
What does this mean?
It means that what was once associated with an older, conservative workforce is now embracing a younger, more diverse generation that values comfort and individuality. This shift is evident in industry events that encourage all kinds of visitors without any strict dress codes, allowing professionals to trade in their formal attire for something more relaxed and modern.
This change isn’t just about what people wear—it reflects a broader evolution in the procurement field. The focus is shifting from merely cutting costs to creating value, with a fresh perspective driving innovation across the board. The new wave of procurement professionals is changing the aesthetics of the industry while at the same time redefining its role in business.
To sum up
Demands for sustainability, talent and skill development, as well as GenAI and SMR are the trends that will contribute to the procurement landscape’s rapid development in 2024. Procurement teams need to adjust to these shifts by investing in personnel development, embracing new technologies, and cultivating strategic supplier partnerships.
The companies that thrive will be those that not only keep pace with these changes but also leverage them to drive innovation and resilience.
Remaining ahead of these developments can help companies turn procurement from a cost-centered activity into a strategic asset that drives business success.
The key is to be proactive—anticipating challenges before they arise, and turning potential risks into opportunities.
