63% of CPOs Are Gaining More Influence — Here’s Why Procurement is Now a Strategic Powerhouse

For years, procurement was viewed as a back-office function, focused primarily on cost-cutting and supplier negotiations. But that perception is changing rapidly. 

The 2025 ProcureCon CPO Report reveals that 63% of CPOs expect to play a greater role in high-level decision-making over the next 12 months—a significant jump from last year’s 46%. 

And this shift could not have come at a more critical time. 

With rising costs, shifting trade policies and new tariffs, and the growing demand for sustainable procurement practices, business leaders are looking to CPOs to drive strategy, mitigate risk, and create value beyond cost savings. 

Procurement is no longer just about cutting costs — it is about navigating economic uncertainty, leveraging technology, and shaping long-term business success. 

Here’s why procurement is becoming a business powerhouse and what CPOs must do to take full advantage of this shift. 

Why CPOs Are Gaining More Influence 

Procurement’s role is expanding beyond supplier negotiations and cost reductions. Today’s CPOs are expected to shape corporate strategy, drive innovation, and manage major business risks. Several factors are accelerating this transformation. 

1. Managing Supply Chain Complexity Amid Global Disruptions 

The world is facing supply chain challenges unlike anything seen before. Tariffs, geopolitical tensions, inflation, and raw material shortages are forcing businesses to rethink how they source and manage suppliers. 

The ProcureCon report found that 53% of procurement teams are only involved after purchasing requirements are defined, meaning many organizations are still failing to leverage procurement’s expertise early enough in the process. 

The businesses that engage procurement from the start — during strategic planning and budgeting—will be the ones best positioned to handle supply chain disruptions before they become crises. 

For example, during the global semiconductor shortage, automotive and electronics companies had to act fast. 

The ones that had procurement leaders involved early were able to secure alternative suppliers and negotiate long-term contracts before shortages escalated. Others that relied on last-minute sourcing were left struggling to keep production lines moving. 

2. The Rise of AI and Data-Driven Procurement 

Procurement is no longer a manual, reactive process. Today, CPOs are using AI, automation, and predictive analytics to enhance decision-making and efficiency. 

• 38% of procurement leaders are already using AI to improve sourcing and supplier management. 
• 90% of procurement leaders are considering AI for procurement, but 65% lack confidence in implementing it effectively. 

Why the hesitation? Many procurement teams struggle with data quality, AI integration, and upskilling staff to work alongside new technologies. However, those who embrace AI will see massive gains in cost reduction, risk mitigation, and supplier performance optimization. 

Key AI Applications in Procurement: 

• Spend analytics to identify cost-saving opportunities in real time 
• Predictive supplier risk assessment to prevent disruptions before they occur 
• Contract automation to reduce errors and ensure compliance 

The message is clear—CPOs who invest in AI and analytics today will be the ones leading business strategy tomorrow. 

3. ESG and Sustainability—From Compliance to Competitive Advantage 

Sustainability is no longer just a buzzword—it is a business imperative. According to the 2025 ProcureCon report, 48% of CPOs have made ESG a top priority. Companies that fail to meet sustainability requirements risk regulatory fines, reputational damage, and loss of investor confidence. 

However, ESG is not just about avoiding penalties—it is also a competitive advantage. Businesses with strong ESG practices are seeing: 

• Better supplier relationships and improved contract terms 
• Lower costs over time by reducing waste and improving efficiency 
• Greater brand value, attracting customers who prefer ethically sourced products 

For example, Unilever has made sustainability a core part of its procurement strategy, committing to 100% sustainable sourcing. This has not only reduced environmental impact but has also improved supplier performance and strengthened brand reputation. 

For CPOs, sustainability is now a key metric for success, not just an afterthought. 

4. Procurement is Now a Revenue Driver, Not Just a Cost Cutter 

For decades, procurement was seen as a function that saved money but did not generate revenue. That perception is changing. CPOs are now playing a key role in: 

• Speeding up time-to-market by improving supplier efficiency. 
• Leveraging supplier innovation to develop new products and services. 
• Maximizing return on investment by optimizing contracts and reducing inefficiencies. 

Leading analysts say that optimized procurement sees significant improvement in EBITDA. This is a game-changer for businesses looking to improve profitability. 

Procurement is no longer about spending less—it is about spending smarter to create long-term business value. 

How CPOs Can Take Full Advantage of This Shift 

With more influence comes higher expectations. Here’s how procurement leaders can solidify their role as business strategy drivers. 

1. Align Procurement with Business Strategy 

The ProcureCon report found that 42% of CPOs are already aligning procurement goals with company objectives. To achieve this effectively, procurement teams must collaborate with finance and operations to improve cash flow and budgeting. They should also work closely with R&D teams to integrate supplier innovation into product development, ensuring procurement supports long-term growth. Additionally, improving forecasting capabilities will help procurement shift from a reactive function to a proactive, strategic driver of business success. 

2. Invest in AI and Data-Driven Procurement 

To close the confidence gap in AI adoption, CPOs should start small with high-impact automation, focusing on areas like invoice processing and contract management. Ensuring AI models provide accurate insights requires a strong foundation of clean, well-structured procurement data. Additionally, upskilling procurement teams to work effectively alongside AI and analytics tools is essential for maximizing the technology’s potential and driving meaningful business outcomes. 

3. Get Procurement Involved Earlier in Decision-Making 

Right now, only 38% of procurement teams are involved early in strategic planning, leaving a significant gap in their ability to influence key business decisions. 

To maximize their impact, procurement leaders must push for a seat at the table from the outset. By being actively involved in supplier selection and contract negotiations, they can secure better terms and ensure alignment with business objectives. Early engagement in budgeting and resource allocation allows procurement to drive cost efficiencies while maintaining operational agility. Additionally, integrating procurement into risk assessment and compliance strategies strengthens the organization’s ability to navigate regulatory challenges and mitigate supply chain disruptions. 

Also Read: 6 Step Procurement Audit Guide for CPOs 

Is Your Procurement Team Ready? 

The best-performing organizations will be those that leverage procurement as a strategic lever rather than a cost-control function. Investing in AI, sustainability, and supply chain resilience today will ensure procurement teams are leading the future of business strategy. 

Download the full 2025 ProcureCon CPO Report for more insights.