Overcoming short-term cost concerns and operational hurdles are top of the agenda for those leading procurement teams, taking precedence over ESG initiatives and strategic AI adoption.
That’s the finding of a report highlighting trends and global insights around procurement’s needs, priorities and challenges across not only the UK, but Spain, Italy, Germany, and France.
Amazon Business’s fourth annual State of Procurement document was set against a background of discrepancy between strategic ambitions and internal priorities.
It recognised the fact that the UK economy is expected to grow by just 0.9% this year, down from the previous prediction of 1.1%, a slowdown reflected in the way procurement teams are approaching their budgets.
It also found that while 64% of UK decision makers expect their 2025 budgets to exceed those of 2024, they are sceptical about the impact these increased budgets will have. The rising cost of purchases continues to be a top external challenge for 44%, suggesting that the increasing costs of goods and services is an acute roadblock to maximizing the potential of these larger budgets.
Procurement teams need the tools and insights to navigate unexpected economic changes and streamline their operations to drive both immediate and long-term value
While last year’s report saw procurement leaders anticipating a shift towards strategic, high-value decision making – such as leveraging budgets for initiatives like analytics or reporting tools to understand performance and identify trends – this is yet to materialise, with no increase in pickup of these technologies compared to last year.
Instead, the focus remains on overcoming day-to-day operational hurdles, with 49% of all procurement leaders citing efficiency and complexity as their primary challenge, in particular 60% see the intricacies of their internal systems and processes as a major internal barrier.
“Our research highlights a clear disconnect between procurement leaders’ ambitions and their ability to act on them,” said Amy Worth, Director & General Manager of Amazon Business UK.
“While increased budgets present new opportunities, procurement teams need the tools and insights to navigate unexpected economic changes and streamline their operations to drive both immediate and long-term value.”
Other findings included the fact that demand for AI remains high, although the general consensus is that the benefits are yet to be realised and ESG remains a critical priority.
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Access the 2025 report here
