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Shifting trade policy announcements, rising costs and new regulatory compliance requirements are just a few of the main issues impacting companies’ operations and performance this year. Chief procurement officers (CPOs) are feeling the pinch and many of them are focusing on a basket of risks that Deloitte uncovers in its 2025 Global Chief Procurement Officer Survey.
“The risk landscape continues to evolve and has shifted from supply assurance to profit assurance, as rising costs and inflation are placing increased pressure on margin attainment,” Deloitte points out in its report. “However, this data understates the commercial risk present in the current global trade environment, given the shifting tariff policy announcements from the US administration.”
- Right now, the top risk impact areas identified by CPOs are
- Rising cost/spend pressures
- Regulatory compliance issue
- Supply shortages and constraints
- Intellectual protocol/cyberattacks
- Loss of critical talent
Deloitte says many organizations are also struggling to keep pace with the increasing size, complexity and criticality of third parties within their supply chains—as well as the inherent risks that these third parties create. “The impact of any failure by such third parties, embedded in delivering critical organizational functions such as sourcing,” it explains, “also continues to increase amid growing risks and geopolitical uncertainty in the macroeconomic environment.”
The survey also found that 74% of CPOs see “maintaining active alternative sources” as the most effective mitigation strategy and 64% want to enable greater visibility into the supply chain. Additionally, 61% of CPOs are focused on enhancing supplier information sharing and collaboration.
Deloitte says CPOs are also worried about cost pressure from suppliers that are either attempting to pass on tariff costs or restricting the supply of unprofitable items due to their similarly increased costs. “Both of these areas can be affected by internal and external policy changes, as well as uncontrollable forces,” it adds.
The AI Conversation Gets Louder
Artificial intelligence (AI) and generative AI (Gen AI) are increasingly becoming part of the procurement process, and CPOs are embracing these and other technologies. According to Deloitte:
- Despite low maturity levels, this year’s survey respondents are “ambitious” about embracing intelligent automation, while managing both the risks of AI within their organizations and those arising from third-party AI usage.
- The business case for doing so is primarily driven by the need to be more cost-effective while being agile and resilient in their navigation of the ever-changing external environment.
- The data shows that inherent risk determination on a dynamic basis and due diligence activities present the greatest potential for using intelligent automation and AI for efficiency and effectiveness.
- The potential of AI in contract management for proactive risk mitigation should not be overlooked. However, data quality and integration must be prioritized to maximize the effectiveness of AI usage in these areas.
“We believe that sophisticated risk intelligence platforms combining AI, analytics and data visualization to provide real-time insights and actionable recommendations will emerge,” Deloitte predicts. It also says that while larger organizations may invest in their own AI-powered platforms and upskilling their teams, smaller organizations “can benefit from more holistic managed service solutions.”
Mitigating Tariff Impacts
Looking ahead, Deloitte says the inflationary concerns and geopolitical uncertainty are both pervasive, and that “stagflation is a massive concern right now.” And with geopolitical uncertainty intensifying—and the tariff situation fluctuating almost daily—effective risk mitigation strategies have become increasingly important for procurement teams.
“CPOs and other leaders are grappling with the operational effects of these policy measures, implementing strike teams in their organization to understand new legal and customs requirements and change their processes to implement mitigation strategies,” Deloitte says. “The daily cost of a wait-and-see approach rapidly outstrips the cost to stand up these teams, leading organizations to rapidly assemble both triage and operational teams to mitigate their tariff exposure in a way that has never before been seen.”
