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Confidence, Cost, and Compliance: Insights from the Economist Impact Report
Philip Ideson : May 10, 2026
“Right now, procurement needs to define their future role in the business. Procurement needs to drive that for themselves, because if we don't, then someone is going to drive it for us, and that could drive us out.” - Gordon Donovan, Vice President Research - Procurement & External Workforce, SAP
The world of procurement is shifting… again.
Over the last few years, I have seen procurement gain confidence, expand their influence, and move closer to the center of business decision-making. In many cases, we’ve moved from tactical support to true business partners.
What stood out in this year’s Economist Impact research is that this trajectory has taken a turn, and not entirely in procurement’s favor. This newest data shows that confidence has dropped, cost has surged back to the top of the agenda, and AI has quickly moved from concept to expectation.
In this Art of Procurement podcast episode, I welcome back long-time AOP friend Gordon Donovan, Vice President of Research for Procurement and External Workforce at SAP, to unpack what the data is telling us.
As always, Gordon brings a grounded, research-led perspective on where procurement really is versus where we think it is.
Confidence Slips and It Is a Global Trend
“We've been tracking the confidence that both procurement has in itself, but also the rest of the C-suite for the last four or five years. Unfortunately, this year it dropped down between 15 to 18 percent, pretty much universally as well. So it wasn't one region, it wasn't one persona, it wasn't one industry. It was pretty consistent.”
This is one of the most important signals in the entire study. A decline like this, spread consistently across regions, industries, and roles, points to something structural rather than situational. When confidence was rising, procurement was able to expand its scope and take on more responsibility. When confidence softens, expectations do not disappear, but tolerance for misalignment shrinks.
What this means in practice is that procurement leaders need to be very deliberate about where they focus. Stretching across too many priorities without clear impact can dilute credibility. This is a moment to reconnect our activity with outcomes that matter to the business.
The Return of Cost and Compliance
“When we looked at the short-term priorities last year, cost was the fifth short-term priority. This year, it's the second. And when we look at the value proposition, it was cost at 43 percent last year. This year, it's cost, but it's gone up to 54 percent.”
Cost has always been part of procurement’s identity, but the speed of its return to prominence is telling. External conditions are clearly playing a role, but what I find more interesting is how procurement is responding. Gordon points out that even CPOs are reinforcing cost as the primary value proposition.
That suggests a conscious shift back to fundamentals. The risk here is not focusing on cost. The risk is doing so in a way that overlooks the broader value procurement can bring. The opportunity is to approach cost with more sophistication, connecting it to resilience, growth, and long-term competitiveness rather than treating it as an isolated objective.
Category Management Evolves
“What I'm seeing now is organizations deciding those strategies of the past aren't necessarily going to work for every category. What I'm seeing organizations doing is operating at the subcategory level, where, within that category, they’re going to have 15 to 20 strategies that all need to come together.”
Category management has been a core discipline for years, but the level of nuance Gordon describes reflects a new level of complexity.
Managing a single strategy at a high level is no longer sufficient. Teams are now expected to tailor approaches across multiple layers within a category. That has implications for both capability and capacity. It reinforces the need for better tools, stronger data, and clearer prioritization. It also changes the role of category managers. Their value is increasingly tied to how well they can design and orchestrate a portfolio of strategies, rather than execute a single approach effectively.
AI as Both Priority and Pressure
“The top priority for procurement from a short-term priority was digital transformation, which included AI. And when we asked what’s driving digital transformation, the top answer was implementing an AI strategy.”
AI is playing a dual role now. It is both the objective and the mechanism for achieving that objective. That creates a sense of urgency, but it also introduces complexity. Organizations are investing in AI with the expectation that it will improve efficiency and decision-making. At the same time, many are still working through fundamental questions about how to integrate it into existing processes. This is where I see a clear dividing line emerging. The organizations that treat AI as a layer on top of existing processes will struggle to realize its full potential. Those who are willing to rethink how work gets done are more likely to see meaningful impact.
Data, Decision Making, and the Human Role
“46% percent said AI will support tactical decisions while humans retain strategic control. 42% said AI and humans will collaborate equally in most decision areas.”
There is still a strong belief that humans will remain at the center of decision-making, particularly for strategic choices. What I found interesting in our discussion is how that role may evolve.
The value of human input is likely to shift toward questioning, validating, and interpreting rather than simply approving. That requires a different mindset. It also places greater emphasis on data quality. Without reliable data, neither human nor machine decision-making will deliver consistent outcomes. For procurement leaders, this reinforces the importance of investing in data foundations alongside any AI initiative.
Rethinking What Comes Next
“We've almost got to unlearn what we've learned. If we hold on to the processes that have got us to where we are, I don't necessarily think they're the ones that are going to get us to where we want procurement to be in three to five years.”
This is probably the most important takeaway from the entire conversation.
Procurement has built their current operating model over many years, and much of that experience remains valuable. At the same time, holding too tightly to established ways of working can limit progress. What Gordon is pointing to is the need for a more deliberate reset. That does not mean discarding everything that has worked. It means being willing to question it. The organizations that move forward will be those that can combine what they have learned with a willingness to rethink how they apply it.
When I reflect on our entire conversation and the insights from the report, what stands out is the combination of pressure and possibility. Confidence may have dipped, but the opportunity for procurement to shape their future remains significant. The difference will come down to how intentionally leaders respond to what the data is telling them.
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