Weekly Special - State of Procurement 2025 – Mid-Year Review

Howdy fellow nerds -

We’re halfway through 2025.
And I don’t know about you, but procurement right now feels like juggling flaming swords while someone keeps handing you new ones.
Also, the swords are on backorder.

Here’s my quick, unfiltered scan of where we’re at — and where we’re heading — before someone from Finance asks why your cost savings target isn’t trending in Excel.

1. Spend is under pressure — everywhere

Budgets aren’t “tightening” anymore. They’re suffocating.

In both public and private sectors, the mood is the same: delay it, cut it, or pray it disappears from next year’s plan.

CFOs are issuing the same corporate mantra we’ve all heard on repeat:

“Do more with less.”

Translation:

We still want the same results, but with fewer people, smaller budgets, and definitely no mood to approve that training you asked for in January.

The impact?

Projects sit in limbo while Procurement plays referee between “we need it now” and “we can’t afford it until Q4 next year.”

2. Supplier power is still strong in key categories

Let’s be honest — in categories like cloud licensing, critical components, and certain niche services, the supplier leverage right now is obscene.

Consolidation has been doing its slow magic for years, and here we are: fewer suppliers, bigger market share, higher switching costs.

Renewals? Forget polite 3% increases.
Price hikes of 15–40% are showing up like they’re part of a summer clearance sale. Only, it’s your budget that’s being cleared out.

If you’re still going into renewals without alternative scenarios, competitive data, and a plan to walk away, you’re basically speedrunning “How to Lose Negotiating Power in 3 Easy Steps.”

3. Risk has shifted east

Asia is still the beating heart of a huge chunk of the world’s supply chain — but lately, it’s been more of an arrhythmia.

New regulations, geopolitical tensions, and the occasional “oh by the way, we’re flooding again” are forcing buyers to rethink sourcing footprints.

For years, “China + 1” was the smart move.

Now it’s “China + 2 + a lawyer + a plan to airfreight if everything goes wrong.”

If your supply risk monitoring is a quarterly check-in buried under 12 other agenda points, congratulations — you’ve already lost the reaction race.

4. ESG pressure is intensifying

Regulatory reporting is speeding ahead like it’s being chased by AI.
Meanwhile, half your supplier base is still figuring out if they can even provide Scope 3 data without sending you a PDF that looks like it was scanned in 1997.

This isn’t just about compliance for the sake of compliance — non-compliance is now a contract killer.

Fail to meet reporting standards, and you’re off the tender list.

The problem is, many buyers still treat ESG as a “we’ll fix it next year” problem.

Except next year is now, and the auditors have already booked their flights.

4. AI in procurement has moved past hype

Yes, I know — the buzzword fatigue is real.

But here’s the uncomfortable truth: early adopters are already eating your lunch.

• Spend classification? Automated.

• Contract expiry forecasting? Done in minutes.

• Supplier risk simulations? They’re running scenarios on everything from natural disasters to political coups.

And they’re not doing it for “innovation theatre.”

They’re getting faster decisions, sharper forecasts, and better risk planning.

If your AI strategy still lives in a PowerPoint marked “future ideas,” you’ve got six months to move it into production before you’re the next case study on “how to be irrelevant in a digital market.”

My takeaway for the second half of 2025:

• Build cross-functional alliances early. Especially with IT and Ops.

  Those renewal battles are much easier when you’re not walking into the room as “that procurement person who slows things down.”

• Lock in flexible terms before renewal dates. 

  Waiting until 30 days before expiry is like trying to negotiate with your landlord after you’ve already moved in.

• Treat supplier risk as a board-level topic. 

  Stop burying it under “miscellaneous.” If your CEO wouldn’t sleep through a discussion about cyber risk, they shouldn’t be snoozing through a discussion about geopolitical or supplier risk either.

Procurement’s not dying — but it is shape-shifting

We’re moving from cost cops to resilience architects.

From negotiators to risk forecasters.

And if we play it right, the next six months could be where we stop reacting to every fire and start fireproofing the business.

It’s messy. It’s exhausting. But it’s also where the fun is.
After all — no one remembers the procurement team that played it safe.

P.S. If you want my full checlist on tackling renewals and supplier risk in this climate, it’s here: https://procurenerds.gumroad.com/l/renewal-prep-checklist-strategic 

Spoiler: It’s blunt, it’s practical, and it works even if your budget has been cut to the corporate equivalent of instant noodles.