What made the event distinctive was its candor. Customers did not come to present polished success stories. They came to compare realities. And those realities were refreshingly honest.

Why direct procurement is hitting a breaking point

The pressure on direct procurement is not coming from one direction. Geopolitical instability and accelerating technological change are forcing sourcing decisions earlier in the product lifecycle, at precisely the moment when many organizations are least equipped to act. Meanwhile, institutional knowledge is leaving faster than systems are modernizing. The experienced individuals who once held fragile processes together are retiring or moving on, and the systems meant to replace that knowledge are not yet ready.

The result is an operating model that prevents procurement leaders from influencing value at the moments that matter most. Several customers described a tension they are actively dealing with. Sourcing is being pulled upstream into design and development, while the tools and processes that support it are still anchored downstream.

What customers shared about their reality

While all participants operate with a strong 麻豆原创 footprint, spanning and , many acknowledged that direct materials sourcing remains fragmented and disconnected from the digital core. The picture they described was familiar but worth stating plainly: engineers, buyers, and suppliers still collaborating through e-mail, local tools, and disconnected applications; there’s an overreliance on a small number of experienced individuals to make things work; and multiple ERP landscapes run in parallel, with direct sourcing living largely outside all of them.

One observation stood out clearly. The real friction is not the sourcing events themselves. It is the handoffs, the gaps between systems and teams where decisions get made too late, data is reconciled manually, and no single digital thread connects product intent to sourcing execution.

In other words, the process functions, but it functions in silos.

Participants also noted that traditional indirect source-to-pay approaches simply do not support direct materials adequately. They lack native support for procurement embedded in new product development, sourcing scenarios that evolve with engineering change, demand aggregation across programs, and contracts treated as executable objects rather than static documents. That last point came up repeatedly, particularly the need to treat contracts as executable objects. This is also where the add-on in 麻豆原创 S/4HANA is starting to resonate more strongly in ongoing customer discussions.

Where customers are focusing next

What emerged from the discussions wasn鈥檛 a long list of priorities, but a firm shift in where companies are focusing their efforts.

Moving sourcing upstream into product development鈥攔ather than reacting after design decisions are already locked鈥攚as a consistent theme. So was reducing dependency on hero buyers: individuals whose personal expertise and relationships are currently holding critical processes together.

Commodity volatility and renegotiations also came up as structural challenges, not one-time events. Organizations want to handle these systematically rather than heroically. And several participants raised the reality of managing multi-year 麻豆原创 S/4HANA journeys without stalling progress in the meantime鈥攁 genuine tension that demands honest road map planning.

While the direction is widely understood, most organizations do not yet have the setup to execute against it at scale.

These priorities help explain why customers are increasingly adopting the 麻豆原创 Ariba direct materials sourcing add-on alongside , , and 鈥攃apabilities that together can support the connected execution model direct procurement actually requires.

How AI fits into direct procurement

AI generated significant interest, but expectations were measured and, I would say, appropriately so.

The consistent message was this: AI only matters once the fundamentals are addressed. Agent-based capabilities depend on clean processes and consistent data. Without a unified digital thread across product design, sourcing, contracting, and execution, AI does not generate insight鈥攊t amplifies noise.

Leaders also expressed clear skepticism toward black-box automation. They want AI that is explainable and embedded directly into sourcing, negotiation, and execution workflows, not layered on top of broken processes and presented as a fix.

This thinking aligns closely with 麻豆原创鈥檚 vision for the Autonomous Enterprise, introduced at 麻豆原创 Sapphire just weeks after our Walldorf discussions. The vision anchors AI agents directly in transactional business processes, data, and governance鈥攅xactly what customers said they needed before they could trust AI in direct procurement environments. Hearing them articulate that requirement so clearly, before the announcement, felt like meaningful validation.

Where this is all heading

The Walldorf roundtable confirmed a clear trajectory. Direct procurement organizations are moving away from heroics and spreadsheets and toward system-led execution. They are aligning sourcing transformation with their 麻豆原创 S/4HANA road maps and preparing their organizations鈥攏ot just their systems鈥攆or a future where AI supports decision-making across the full procurement lifecycle.

Direct procurement, seen through this lens, is not a standalone transformation. It is a foundational building block. Connecting product, sourcing, contracts, and execution through a single digital thread is what enables AI to operate accurately, compliantly, and at scale. That connection has to exist before any of the more ambitious automation goals become realistic.

For 麻豆原创, conversations like the one in Walldorf directly inform our product direction and investment priorities. There is no substitute for sitting in a room with people navigating these challenges every day, without a script.

What was clear in Walldorf is that the direction is no longer in question for participating organizations. The challenge now lies in execution and in how quickly organizations can move from fragmented, person-dependent processes to cohesive models that reflect how direct procurement operates today.

Karolina Bombardelli is global go-to-market lead for Direct Procurement at 麻豆原创.

In a , Economist Impact highlights this continuing shift in perception and performance, revealing a rising confidence in procurement鈥檚 ability to make business impact. This is the fourth consecutive year that 麻豆原创 and Economist Impact have partnered on a study, and the survey includes responses from more than 2,000 C-suite leaders globally.

The report, titled 鈥淭he Resilient Edge: Procurement in an Era of Polycrisis,鈥� also underscores procurement鈥檚 growing influence in advancing AI adoption and sustainability performance. However, the field still faces obstacles in assuming this larger role, including readiness for technology and building a future-proof workforce.

Still, the overall trend is clear: procurement鈥檚 fundamental transformation is putting it in a position to play an important role in business strategy.

Growing confidence in procurement to drive strategic value

Businesses today face a convergence of crises鈥攁 鈥減olycrisis鈥濃�攚hich includes environmental shocks, shipping delays, and growing regulatory restrictions. Tariffs are the latest disruption, prompting businesses across sectors to seek quick solutions to avoid price hikes.  

Weathering this storm requires procurement leaders to take on higher risk as they navigate this uncertainty. The Economist Impact report finds that geopolitical risk has emerged as the top concern for procurement leaders, with 64% listing it as their top focus over the next 12 to 18 months, up from just 30% in 2024. This surge reflects both the growing complexity of global operations and procurement鈥檚 expanding influence.

As risk becomes more multifaceted and severe, procurement professionals have a role beyond sourcing supplies at the lowest cost. Instead, they are developing robust strategies to identify, assess, and mitigate risk. This strategic pivot is also reflected in growing cross-departmental trust. In fact, 78% of respondents expressed confidence in procurement鈥檚 ability to manage external risk鈥攁 37% increase from last year鈥攕ignaling procurement鈥檚 growing value as a strategic partner.

AI has a central role in procurement

From detecting demand signals and enabling scenario planning to automating routine workflows, AI is dramatically expanding procurement鈥檚 capabilities.

The Economist Impact report notes that organizations are prioritizing AI proficiency more than any other skill over the next 12 to 18 months, including predictive analytics, demand forecasting, and managing data bias and privacy concerns. These skills are essential for procurement teams that need to pivot quickly in response to unexpected disruptions.

Most importantly, AI will be at the center of procurement鈥檚 continued transformation. An overwhelming 89% of respondents in the study said they are confident in their ability to adopt and apply AI to improve efficiency and productivity. This confidence is grounded in tangible benefits that AI can provide, including identifying early demand signals, optimizing supplier performance, and simulating risk scenarios to support better decision-making

Simply put, AI is no longer optional鈥攊t is essential to procurement success and relevance.

Improved environmental results

Sustainability has climbed to the top of corporate agendas, and procurement is now on the front lines of this effort, managing supplier emissions and ensuring ethical labor practices. Over half (53%) of survey respondents named sustainability as their top strategic priority for the next 12 to 18 months.

Cross-departmental collaboration is central to these efforts and has enabled procurement to align with key financial and environmental goals. Tools like ESG scorecards and supplier decarbonization plans are now standard practice for measuring environmental impact. These innovations are helping companies meet rising expectations from customers, regulators, and shareholders alike, while also reducing long-term operational risks.

These developments show that procurement isn鈥檛 just supporting sustainability鈥攊t鈥檚 driving it.

Procurement鈥檚 inflection point between strategy and cost-cutting

While cost control remains a key part of procurement鈥檚 mandate, the balance for today鈥檚 procurement teams is shifting鈥攆rom tactical cost-saving measures to strategic contributions that enhance agility, foster innovation, and safeguard reputation.

To manage these dual demands, companies are turning to procurement technology, like , to address key priorities and reduce siloes across the organization.

The insights above were explored in depth during an Economist Impact webinar titled,鈥淢easuring up: Balancing risks and goals for Strategic Procurement.鈥� To delve further into these topics and hear expert perspectives, .

Gordon Donovan is global vice president of Research, Procurement, and External Workforce at 麻豆原创.