The state of procurement: tackling inflation, supply chain disruptions, and cybersecurity risks

Procurement professionals are operating in a challenging environment, with risk a constant presence. A turbulent economic environment coupled with an uncertain geopolitical landscape means procurement teams must constantly think about security of supply and their ability to cope should the worst happen.

 

This is a key theme in Amazon Business’s 2025 State of Procurement Data report, which finds that the factor seen as most likely to pose organisational risks or challenges is supply chain disruptions and delays. This is seen as a threat by 32 per cent of procurement decision-makers, making it their biggest worry, along with 33 per cent of senior leaders.

Political instability is also a concern, identified by 27 per cent of decision-makers and 25 per cent of senior leaders.

 

This has the potential to impact supply chains, with wars, potential regime change and the introduction of tariffs all contributing to an uncertain climate. Concerningly, a fifth (21 per cent) of decision-makers and 18% per cent of senior leaders admit they lack systems to monitor and manage risk effectively. 

 

This means procurement teams are having to make difficult decisions about which – and how many – suppliers to use, including considering where they are based and the potential for them to become embroiled in disruption or instability.

 

One manufacturing procurement senior leader summed it up: “The biggest procurement challenge today is balancing efficiency with the complexity of global supply chains, where managing both resilience and cost are increasingly hard to reconcile.”

 

Inflation is also an ongoing issue, despite the falls seen in recent months. Senior leaders are particularly concerned with this – 34 per cent cite it as a worry, making it the joint biggest perceived challenge – but 29 per cent of decision-makers are also unsettled. The potential for new or changing laws or regulations is a concern for 31 and 29 per cent respectively.

 

But it’s not just the day-to-day practicalities worrying those in procurement. Cyber-security threats are viewed as the biggest issue by senior leaders, with 34 per cent expressing concern; 30 per cent of decision-makers feel similarly. Linked to this are concerns about data privacy, which 27 per cent of decision-makers and 26 per cent of senior leaders see as an issue.

 

The fact that such concerns now rank higher than many traditional business and macroeconomic risks suggests a shift in procurement priorities, and demonstrates the impact new technologies are having on how procurement operates.

 

There are concerns that lie closer to home, too. Difficulty in attracting or retaining talent is seen as an issue by 28 per cent of decision-makers and senior leaders, while 31 per cent and 33 per cent respectively are concerned about integrating new technologies. The spread of AI and new technologies is cited as a threat by 29 per cent of decision-makers and 31 per cent of leaders.

 

Many procurement teams are also facing challenges in their day-to-day operations. Nearly half of procurement leaders highlight efficiency and complexity as their primary challenge, with rates ranging from 42% in Spain to 49% in the UK and Germany. Internal systems and processes are the top internal barriers, with France (64%), Italy (62%), and UK (60%) leading in reporting system inefficiencies. Both these figures have increased from a year ago, by 3 and 1 per cent respectively.

 

Costs and budgets are also a challenge, as is to be expected for those in procurement teams in a difficult economic environment. But the emphasis has fallen slightly – only 21 per cent of both decision-makers and senior leaders list this as a challenge, and this is down 5 per cent for decision-makers and 3 per cent for senior leaders.

 

Supplier relationships, though, are becoming more important, partly because of concerns about supply chain disruption and security of supply. “It’s crucial to build strong relationships with suppliers because when challenges hit, those partnerships determine if you can stay resilient or fall behind,” was how a technology procurement leader put it. Around one in five – 20 per cent of senior leaders and 19 per cent of decision-makers – identify this as a pain point, with both showing a slight increase on the previous year’s figures.

 

There are also concerns about suppliers’ ability to help organisations navigate some of these challenges. Some 17 per cent of both decision-makers and senior leaders are worried about suppliers unable to support digital procurement, and this has increased by 11 per cent for senior leaders and 10 per cent for decision-makers in the past year. The risk here is that suppliers could slow down the adoption of digital processes that would otherwise help organisations balance the pressures of rising costs and security of supply.

 

A lack of clear communication and support from suppliers is also seen as a growing issue, by 19 per cent of senior leaders (up by 11 per cent) and 15 per cent of decision-makers (up by 9 per cent). Ensuring visibility into supplier inventory is another worry, cited by 12 per cent of decision-makers (up by 5 per cent) and 10 per cent of senior leaders (up 3 per cent). And concerns about reliable delivery are on the up: 12 per cent of decision-makers worry about this (up by 4 per cent) and 11 per cent of senior leaders (up by 3 per cent) feel similarly.

 

Those working in procurement face the daunting task of trying to juggle such conflicting issues, while also balancing their ongoing purchasing needs. Accessing a wider range of sellers or products is seen as a challenge for 29 per cent of both decision-makers and senior leaders, as is ensuring compliance with spend policies (29 per cent of decision-makers feel this is an issue, as well as 22 per cent of senior leaders). Some are making use of outsourcing to cope: 72 per cent of respondents do this to some degree.

 

But there is also concern about the extent to which procurement can influence wider organisational issues. Collaboration with decision-makers remains a challenge, particularly in Germany, where 82% of procurement leaders report insufficient collaboration and 83% cite a lack of specialist knowledge—the highest across the EU. 

 

“There’s a real need to ensure procurement has a stronger seat at the table, especially as priorities shift from just cost saving to supporting larger strategic goals,” concludes one technology procurement leader.

For more information on how Amazon Business could help your business reduce risk and access a wider range of sellers and products, visit business.amazon.com/

 

To access the report, visit business.amazon.com/en/cp/state-of-procurement-data#download-report