Is Technology a Priority for Your Organization?

For supply management organizations, technology is a disruption, a trend and a priority.

According to The Hackett Group’s 2025 Procurement Key Priorities survey, technology has a transformational impact on operations, investment and processes.

This year’s survey, as has occurred during the past few years, delved beyond priorities and trends, said Chris Sawchuk during “2025 Procurement Agenda and Key Priorities,” a webinar held last week by Institute for Supply Management^® (ISM^®).

“Something we started several years ago was trying to better understand the adoption of technology — and the types of technology — and where to invest as we look forward,” said Sawchuk, principal and global procurement advisory practice leader of the Miami-based advisory and consultancy.

The Hackett Group also wanted to:

• Find out where organizations are regarding adoption or implementation of technology
• Gain insights into artificial intelligence (AI) and use of generative AI within supply management environments
• Understand the procurement operating model ­— including the technology, human capital, available information and data, the processes, the organizational structure and governance
• Understand the role centers of excellence play (if applicable) in an organization, how they are comprised and how organizations expect them to change going forward.

Trends and Priorities

The study showed the trends that organizations anticipate will have the biggest transformational impact. “Not surprising,” Sawchuk said, “is the top area is around digital technologies. Right behind that is artificial intelligence.”

What’s also interesting, he said, is that the No. 3-ranked priority is skills and talent, while the fourth pertains to data — and the (1) insights and intelligence extracted from the data and (2) pursuit of creating a more intelligent capability that's less process-dependent.

“Two of the key enablers to being successful with AI,” Sawchuk said, “are the data and the people: The talent, the skills, the competencies that we have in the organization who will have to engage, operate and interact with this technology going forward.” However, the skills people need to embrace AI are changing, he said.

In addition to the four areas that companies believe will have a transformational impact on their organization, it’s important to look at the areas considered having the least transformational impact, Sawchuk said. Among those areas: cybersecurity.

Another Perspective

The study, as it has done in the past, asked respondents for their organizations’ top priorities. Topping the list for the second year in a row was improving spend cost reduction. In 2022 and 2023, however, the top priority was continuity of supply, which ranked No. 2 this year.

“We still do have some concerns in various geographies around the world and even in specific categories or supply markets,” Sawchuk said. “So it’s still elevated. Inflation is one of those areas that we believe is driving the elevation of improved spend cost reduction to our organizations.”

Other factors: Companies face a lot of pressures to improve their margins, he said, and some industries will be more challenged to increase revenues.

In one of the biggest changes in priorities this year, transforming the operating model of supply management and procurement moved from No. 5 to No. 3, Sawchuk said: “Prior to that, it rarely was in the top 10.”

Why did it become a key priority? The short answer is that it’s partly due to the emergence of new and advanced technologies: generative AI, predictive AI and agentic AI.

Accordingly, organizations are stepping back to understand how these technologies will disrupt how supply chains and organizations operate, Sawchuk said. This calls for relooking at and transforming the operating model: In other words, “understanding how we’ll blend our human capital, talent and skills with emerging — and aggressively emerging — technologies within our environments,” he said.

Rounding out the top 10 priorities, in order, are:

• Combat inflationary price increases
• Digital transformation and modern landscape
• Act as a strategic adviser to the business
• Embed environmental sustainability
• Gain more from analytics and other insights
• Enhance supplier relationships
• Strengthen third-party and management visibility and capability.

Sawchuk will present a session called “CPO Key Priorities Study” during the ISM World 2025 Annual Conference, to be held June 1-3 in Orlando, Florida. For more information, visit the Conference page on ISM’s website.

(Image credit: Getty Images/Just Super)