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SAP study: 32% of executives list sustainability as a top priority
A study sponsored by SAP, Economist Impact examines procurement’s growing role, as 32% of executives list sustainability as a top priority in 2024, a 7% increase from 2023.
Under the study, 2,307 C-suite executives were interviewed from January to March 2024, spanning multiple countries, regions, and industries.
As external pressure mounts from internal stakeholders and regulators for companies to act on environmental issues, procurement teams have placed a larger emphasis on sustainability.
In fact, 70% of executives say legal and regulatory non-compliance is a key external risk.
Additionally, the top priority for sustainability among executives is compliance, demonstrating an increased focus on regulatory risks.
The increased attention on environmental, social, and governance (ESG) has been successful, as 68% of executives express confidence in procurement consistently meeting ESG goals, an increase of 21% from the 2023 survey. With long-term sustainability measures in place, procurement teams may serve as a model for regulatory compliance.
AI can increase efficiency across many businesses
Artificial intelligence (AI) has shown that it can increase efficiency across many business use cases. Within procurement, AI and generative AI can optimize spend, enhance supplier management, create cost savings opportunities, and allow procurement professionals to focus on value-adding activities.
The Economist Impact data suggests that AI is a significant driver of digital transformation.
Accelerating digitalization is tied as the top procurement priority over the next 12-18 months, with 44% of respondents identifying AI as a crucial technology focus. Respondents anticipate that AI would bring about significant enhancements in two areas: the automation of procurement processes (48%) and improved guidance and optimization (45%).
Chief procurement officers (CPOs) are seeing direct impacts on business outcomes through increased technology investment. However, to realize the value of AI, procurement executives must create a road map for change management, adopt new ways of working, and invest in developing new skills for their workforce.
The survey cites that 69% of respondents believe a lack of vision and business alignment poses a major change management challenge in procurement transformation.
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