2025 Predictions – The Good, The Bad and the AI Mainline

Can we really predict what lies ahead? Well, no – but in some areas the crystal ball is a little more clear than in others. Sometimes of course, predictions turn out to be plain wrong – remember Blockchain anyone? Wrong for now, at least. But our industry is changing at pace, so it makes sense to try to understand what might be about to impact us. So here are some initial thoughts on trends as we look down the barrel of the mid 20s.

ESG Rollback – Are Some of the Promises Drifting Away?

And there might be some choppy waters ahead. Let’s take a look at ESG. If we look back to the pandemic, the more forward-thinking organisations set ambitious ESG targets, acknowledging that it made good business sense to collaborate with suppliers who weren’t poisoning the oceans, who paid on time and who appeared to comply with regulations. But fast-forward to now and in the face of economic uncertainty and shareholder pressure, some major companies such as Unilever and BP, have started to roll back on their plans. Perhaps it’s because “ESG” is such a broad term and one which has proved difficult to define, that some organisations have decided that it no longer makes financial sense to be a standard bearer for ethics. Regulations in the area will remain tight, and are likely to become more so, but some of the big promises, such as halving the use of virgin plastic or paying all suppliers a living wage for example, seem to be drifting quietly away.

And What about Diversity, Equity and Inclusion?

And it’s not just ESG, it’s the Diversity, Equity and Inclusion agenda too, with announcements from the likes of Meta, Amazon, Walmart and McDonald’s scraping their DEI schemes. And yet evidence from McKinsey amongst others states that companies which are gender, culturally and ethnically diverse perform up to 34% better than the alternative. Scraping a means to get there seems contradictory and frankly, ethically wrong. So, what’s going on? Well, take Bud light for example, their work with a trans influencer reportedly cost the company $27bn in revenue. Business, particularly in the States has become twitchy around what might be seen to be “wokeism” in some of their customer demographics. This backlash in the US raises fundamental questions globally, including for us here in the UK. Notably, Apple’s Board have recommended that shareholders reject plans to axe DEI policies. Companies that remain committed to DEI are likely to suffer less attrition, have a better reputation and remain relevant in a world that will only ever become more connected.

Global risks and Disruption and Local Sourcing

But global risks remain, with geopolitical events causing disruption to supply chains and driving costs up in some areas. Threats of tariffs in the US and the confusion around President Elect Trump’s “External Revenue” Department, is likely to cause some concern. For companies committed to supply chain resilience and flexibility, we could well see something of a resurgence in local sourcing.

Interest Rate Cuts and a Drop in Inflation

External and internal pressures continue to make themselves felt in the UK economy, but with the surprise drop in inflation to 2.5% announced yesterday, it seems more likely that the Bank of England will cut interest rates next month. But while the cost of borrowing remains high, business will still need to be cautious around their cash management and debt. Plus, on the back of October’s Budget, businesses have had to face the costs of changes to National Insurance contribution. Without the time to prepare, it’s also caused some pause for thought in the job market, though the more likely result is hesitancy to increase wages, rather than stagnation. There remains a skills shortage in the industry, particularly around automation, digitisation and AI.

Digital Transformation, AI and eInvoicing

People with those skills will remain in strong demand as 2025 is likely to see steady growth in digital transformation initiatives, some of which will be second or even third generation. Those companies that invest in controls and efficiencies and - here’s the crucial part - do it well, will see ROI in terms of cost savings, better cash management, analytics to predict outcomes and the use of AI to automate routine tasks. And in some cases, it won’t just be a nice to have. Countries like France and Germany following in the footsteps of Spain and Italy and others, will soon have eInvoicing mandates in place, while the UK is expected to eventually follow suit. GenAI continues to make an impact in both finance and procurement and with the announcement of the government initiative to “mainline AI into the veins” of the UK announced this week, organisations still relying on Excel and manual process had better start to think again.

Fraud and the Rise of the Deep Fake

Digitisation offers opportunities. But it’s not always to those you would want to offer opportunities to. There have always been people who are not quite who they first appear to be. ?And digitisation offers a whole new way for them to do that. Take what happened at UK engineering company Arup for example, a company that fell victim to a ￡20m deep fake fraud. Despite having suspicions about the initial request for money, the finance manager arranged a meeting to put those fears to rest. When they were met by people who looked and sounded like people the employee knew, the money was sent. Scary stuff, but an example of how fraudsters evolve and how company controls and awareness need to be one step ahead.

Standards and Regulations

And we are trying to be. From consultations around eInvoicing mandates, the Procurement Act, ViDA, the Fair Payment Code and the Economic Crime and Corporate Transparency Act, there is an attempt to create an environment in the UK where malpractice has fewer places to hide. While the burden to remain compliant might cause headaches, particularly for some smaller businesses that have to comply, the upside should be more transparency, better payment terms, accountability and a more level playing field. We will see!

Change is inevitable, but by staying connected and up-to-date, it doesn’t have to be something to hide away from. At Purchase to Pay Network we believe that the value of a community is in its people, sharing information, staying connected and providing a place where innovation, trust and learning can thrive.

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