2025 CPO Agenda

This episode of the “Gen AI Breakthrough Podcast” explores findings from The Hackett Group’s 2025 Procurement Key Issues Study, focusing on top priorities like the scaling of Gen AI, cost reduction, supply continuity and the evolving procurement operating model. Hosts Vicky Kavan and Chris Sawchuk discuss the disruptive impact of generative AI, the need for digital transformation, and the growing emphasis on talent, data analytics, and supplier relationship management in shaping the future of procurement.

Welcome to The Hackett Group’s “Gen AI Breakthrough Podcast”, where top experts give actionable AI insights, expert advice and strategies to achieve breakthrough business performance. This episode is hosted by Vicky Kavan, director and senior manager at The Hackett Group, and Chris Sawchuk, principal and Global Procurement Advisory Practice leader at The Hackett Group. In today’s episode, they will explore key issues in the agenda for finance leaders in 2025 and discuss the findings from The Hackett Group’s 2025 Procurement Key Issues study, focusing on top priorities such as Gen AI technology, supply continuity, cost savings and the procurement operating model.

To begin, Vicky and Chris share their initial thoughts from the 2025 CPO Agenda. The top two issues relating to operating models were the same as the year before and the issues around continuity have subsided. Chris believes the continuity level stands where it is because of sticky areas like tariffs, which have an elevated level of concern. There has always been a need for the absolute basics of procurement delivery – getting the right stuff to the right place at the right time – which remains a priority. In addition, organizations still want to find ways to save delivery costs. For the operating model, organizations also found operating in the future, digital transformation – in terms of what technology are we using – and talent to be among their top three issues.

There is an emerging focus on the operating model more broadly, and it is further elevated as an organizational priority. Driving this is the emergence of new technologies, specifically, Gen AI, which depends on organizations moving forward in this new environment. Organizations understand the disruption underway as we reshape an environment that is dependent on AI technologies and forces us to rethink how we operate. A significant portion of our work today will impact future results, and skills will be more dependent on data, the ability to analyze data and intelligent procurement organizations. The speed with which we do that has implications on our future environment.

Next, Vicky and Chris talk about the idea of freeing up time to work on more important activities. Everyone has this problem, and the question is how we become more strategic. Tools have been introduced to us to transition much more rapidly, but there are also some challenges for organizations. Not everyone is prepared to operate in an environment of evolving AI technologies. .
In the procurement study, participants were asked about the trends for a transformational impact. Clients highlighted the areas of Gen AI as incredibly important but said they were woefully unprepared to deliver against them. This is representative of most of the clients, and they identified these areas of technology as being linked together.

One of the enablers of technology is talent, and we need to look at tools that take on some of the work organizations are doing today. Data is required, and the key objectives must be to upscale and be ready with the talent and human capital we have. Data is a continuous opportunity for us to exploit these technologies and the more we do that, the more opportunity we have to become intelligent and predictive.

In addition, Vicky and Chris discuss third-party risk management, which is always evolving and emerging. Due to the pandemic, risk management became a top 10 issue several years ago. . Supplied continuity is a growing risk management priority to protect the revenue of our organizations. Supplier relationship management is explicitly highlighted today because the organizations that did well during the pandemic were those with strong supplier relationships. We have to set ourselves up for success and we are dependent on our partners.

Among the top 10 improvement initiatives identified in the procurement survey, Gen AI was number eight on the list, but that begs the question as to why it was only eighth when Gen AI will be the most transformative factor in business today? Chris said these questions were asked last year when it wasn’t even in the top 10, but since then, there has been recognition and effort to improve and integrate this technology into the environment.

Our 2025 procurement study wrapped up at the end of November, and since then, more organizations have highlighted greater initiative with Gen AI. They also share interesting use cases that indicate 2024 was a year of education and some implementation, but 2025 is a year of implementation. The identification of use cases was something more organizations were trying to understand and they are being brought forth in a number of ways.

Lastly, the study showed business objective realization hadn’t been met yet, but Chris says some expectations of technology are higher than they should be. The potential could be much more than what people are thinking about today.

Timestamps:

• 0:39 – Welcome to this episode, hosted by Vicky Kavan and Chris Sawchuk.

• 1:39 – Initial thoughts from the 2025 CPO Agenda.

• 4:30 – Perspectives on the operating model at number three out of the top 10.

• 7:42 – How to free up time to work on the more important activities?

• 9:20 – Clients highlighted areas of generative AI as incredibly important and state of readiness. 11:36 – Third-party risk management.

• 14:05 – Thoughts on supply relationship management.

• 17:19 – Why is generative AI number eight on the procurement list if it’s the most transformative initiative.

• 19:04 – Interesting use cases.