A modern procurement function is about more than just securing goods and services at the lowest price. Procurement has become a multidimensional discipline encompassing strategic sourcing, supplier management, risk mitigation, and process optimization, all of which are critical to staying competitive in today’s fast-paced business environment. Procurement personnel and technology have emerged as top investment priorities. But where is this money going and how much is being spent? To answer these questions, we proudly present our first annual Procurement Budgets, Staffing, and Process Metrics 2024/2025 report. This comprehensive report delves into the financial and staffing trends shaping procurement today, offering valuable benchmarks for companies seeking to optimize their procurement strategies.
As shown in the figure below from the executive summary (available to download for free), healthcare payors are allocating the highest percentage of revenue toward procurement. This challenges the conventional belief that manufacturing sectors, with their heavy reliance on raw materials and complex supply chains, would naturally command the largest procurement budgets. Process manufacturing, which includes sectors like chemical production and food manufacturing, typically requires significant procurement resources for raw materials and equipment essential to production. However, our findings indicate that these industries now allocate a smaller portion of their revenue to indirect procurement compared to healthcare payors.
The enterprise focus in procurement has been on adopting digital technologies such as generative AI, automation, robotics, and predictive analytics to revolutionize procurement organizations’ operations. These technologies enable the automation of routine tasks, freeing up procurement professionals to focus on higher-value activities such as strategic decision-making, risk assessment, and performance optimization. Additionally, digital technologies provide real-time insights into procurement operations, enabling organizations to respond quickly to changing market conditions and make data-driven decisions.
Staffing is also a critical factor in procurement success. Organizations must balance maintaining a skilled workforce with enhancing efficiency through automation and outsourcing. Our report provides benchmarks for procurement staffing, offering insights into optimal staffing levels based on organizational size and procurement spend. Key metrics include the ratio of internal and external procurement staff to total procurement staff, the ratio of total employees to procurement employees, annual spend per procurement employee, and the number of purchase orders processed by procurement employees annually.
Understanding procurement spending and staffing is essential for optimizing procurement strategies. To support organizations, our report provides benchmarks calculated across various metrics, including organizational revenue, procurement expenditures, and the number of procurement staff. By comparing their performance against these benchmarks, organizations can identify areas for improvement and ensure their procurement functions align with best practices.
“Today, business leaders understand that procurement goes beyond efficiency—it’s a driver of strategic value and innovation. Leading organizations don’t just secure the best deals or build resilient supply chains; they also foster adaptability, ensure risk management, and create a foundation for long-term sustainability,” said Michael Wheeler, partner at Avasant.
Our Procurement Budgets, Staffing, and Process Metrics 2024/2025 study is based on a comprehensive survey of over 150 organizations in North America and Europe regarding their procurement spending and staffing plans for 2024/2025. The study offers benchmarks for midsize, large, and very large organizations across seven sectors. The free executive summary describes the study’s metrics, design, demographics, and methodology.
This Research Byte is a brief overview of the findings in Avasant’s Procurement Budgets, Staffing, and Process Metrics 2024/2025. The full 10-chapter report is available as an add-on to existing Avasant Research clients. Individual chapters may be purchased directly from our website (click for pricing).