As an organisation helping suppliers win work through the tendering process, we believe it’s vital to keep a close eye on contemporary procurement trends. These form the context into which you will be bidding, helping you shape an approach that aligns with the broader procurement agenda.
Having digested several 2025 procurement reports including the Kearney CPO Agenda, then coupling this with what we see on the job daily, here are five procurement trends we expect to see more of as the year unfolds further.
Five procurement trends to expect in 2025:
1. The rise, and rise of technology.
Large buying organisations will continue to streamline procurement operations through the ongoing automation of manual tasks. Nothing new here. But we’ll also see an uptake of ‘smart’ AI-based solutions that can analyse large data sets to assist with forecasting, and at this stage lower-level decision making. We also expect 2025 to be a pivotal year in which organisations decide how to integrate AI into their ‘business as usual’ activities, whether that be on a make or buy basis.
2. Continued focus on cost reduction
As major guardians of company spend, procurement teams will continue to seek opportunities to better forecast, manage and reduce costs. For product-based organisations, inventory levels will be optimised using more advanced dynamic analytics. Procurement teams will also seek to simplify production and reduce costs through influencing design and material decisions. Supplier payment terms will be fiercely negotiated, while procure to pay processes will continue to deliver better cash-flow management and liquidity. We may also see a requirement for procurement budgets to be developed from a zero base to test and/or re-set budget fundamentals.
Much of this cost reduction focus will be supported by the rapid and ongoing technology developments noted in trend #1 above.
3. Building an efficient and resilient local supply base
The Covid pandemic exposed the risks of being reliant on complex global supply chains. Since then, we’ve seen (and will continue to see) a focus on reducing supply chain risks through strategies including near-shoring/local supply. However, it’s acknowledged that this will require a longer-term view that’s reliant on partnership-based approaches. These partnerships will stem from procurement teams’ dealings with their internal customer(s) as well as their external commercial relationships with contractors and suppliers. We are already seeing signs of buyers creating capability development programs designed to improve local supplier flexibility, responsiveness and conformity. Earlier and more collaborative activity with suppliers will also deliver cost optimisations and uncover innovative local supply solutions.
4. Sustainability becoming mainstream
With sustainability reporting mandatory for larger Australian organisations since 1 January 2025, we will see more evidence of the flow on effects during the year. Affected organisations will manage legal and reputational risks more tightly, while also demanding more of their supply chain in this regard. Although sustainability reporting has an environmental focus, some organisations may also bundle social and governance initiatives into the mix to progress their wider ESG agenda. Whichever approach is taken, ESG is no longer a future concern. It’s here now.
5. Hiring for the future
It almost goes without saying that hiring decisions will be made to support the above procurement trends and priorities. Although more traditional procurement skills will remain in demand, technology embedment increases the demand for tech-savvy procurement professionals. Strategic expertise in ESG implementation and monitoring will also be particularly sought after, as will the ability to build robust supplier partnerships.
Understanding assists positioning
At BidWrite, one of our fundamental principles is the importance of client centricity. In bidding, this means developing submissions that place your buyer’s objectives firmly at the centre of your offer. But if that’s all you do, you’re going in undercooked. Understanding your buyer’s ‘why’ is equally important as it provides you with a broader framework to align your response to.
Buying organisations know where they’re heading, so if you can understand the procurement trends that matter to them and help accelerate that journey, your tender response will be considered more favourably.
So what’s a supplier to do?
Our next piece will look at the other side of the equation. We’ll explain what these procurement trends mean for you as a supplier of goods and services, and how to capitalise on them as you develop your next tender response.
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