First, happy holidays! As CPO and leader of procurement strategy, you deserve a break because the past 12 months have been challenging to say the least.
In fact, it’s a good job that your average chief procurement officer is naturally drawn to complex problems because there was a rich vein of them through 2024. And there’s little to suggest that much will change moving into 2025.
So, here are three things we should plan for in the year ahead – look out for a further three in the new year…
First, profound uncertainty. Leaders must become more accustomed to making big decisions with a growing set of incomplete and sometimes competing data. Our capacity for operating in areas of ambiguity will be tested to the limit in 2025.
In such an environment, agility will be an important muscle to build – agile teams, agile processes and supply chains and supplier relationships that are able to pivot at speed.
Second, local first. One profound geopolitical trend is that we are becoming more fragmented with peak globalisation behind us. Growing protectionism, tariffs and national hostilities all play into this narrative but, at a micro level, the trend toward more local outcomes is also top of mind.
CPOs relying on centralised, ivory-tower approaches will face significant headwinds as local nuances in terms of approach and consumer demand gain traction. Decision-making should be flattened to allow for faster reaction times.
Third, AI bunfights. Next year is a big year for AI rollouts and CPOs will need to vie for investment with other AI-hungry functions. Building the business case and working on a concise value proposition that an investment will bring will be top of mind for the function.
Equally, the AI investments that are being lined up by significant partners and suppliers should also be on the radar of every CPO, as this type of intelligence will help determine where time and resources can and should be spent.
So, as we close out the year, think about how you and your team might prosper through uncertainty, be more agile and better able to respond to local demand, as well as compete for technology investment with your customer-facing functional colleagues.
Once you’ve solved for that over the holidays, we’ll move on to the next three…
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