Webinar Recap: Procurement 2022, Big Trends and PredictionsProcurement
Last week, Ivalua partnered with Ardent Partners to discuss Procurement 2022: Big Trends and Predictions.
During the webinar, Ardent Partners highlighted a series of market trends and predictive scenarios for 2022, focusing on massive challenges brought on by the global pandemic that procurement organizations are facing today and present a thoughtful discourse on the road ahead.
While the procurement industry is consistently evolving and shifting, supply management professionals across the globe have had to quickly prepare for change and innovation in technology, business regulations, and the general speed of commerce.
Below, we’ve lifted the main webinar takeaways from panel contributors and Vishal Patel, VP of Product Marketing at Ivalua.
Procurement 2022: Big Trends and Predictions
#1. Impact from Covid-19 will be massive
COVID-19 has fundamentally altered families, communities, businesses, countries, and the world. Enterprises will continue to undergo the financial burden of revenue disruptions, consumer , and uncontrolled supply chain variables.
Businesses are either pausing staffing efforts or ramping up talent acquisition strategies depending on the industry. The world of work is changing even more so than ever before and we need to recalibrate recruitment and retention strategies.
#2. Inflation will Continue to rise in 2022
As operating budgets tighten, restrictive spending will pressure businesses to focus on savings and creative alternatives.
The annual rate of inflation in the United States hit 6.2% in October 2021*, the highest in more than three decades, as measured by the Consumer Price Index (CPI). Disruptions in global supply chains, labor market shortages, strong consumer demand. What can we expect in 2022? CPO’s and CFO’s will join forces to combat inflation and supply risk, supply assurance will be perceived as more important than price, convenience and customer service gaining significant popularity, and vigilance against commodity and supply market manipulation will be critical.
#3. The Criticality of the Supply Chain (and Suppliers)
Building and maintaining supply chain resilience will be critical in a post-Covid-19 world. How can we mitigate technical, logistical, weather-related, and demand-driven supply chain disruptions? Organizations must shift focus toward strengthening their procurement processes and procedures to gain 100% supply chain visibility. Teams also need to to mitigate supply chain risk by prioritizing digital transformation and adopting procurement technology.
#4. Digital Transformation is the Top CPO Priority
An Ardent 2021 survey of more than 350 CPOs and other business leaders found that there’s a strong push by procurement teams to adopt suites instead of a collection of standalone or one-off solutions. More on that here.
Last year, 62% of enterprises that made an investment in supply management technology over the past two years took the suite-based approach (strategic sourcing suite or full Source-to Settle suites. CPOs prefer their technology delivered as a solution suite and we need to pivot away from disjointed software systems.
#5 Procurement Increasing Its Focus on and Use of Data
The average procurement department’s overall data aptitude is increasing, but most organizations classify themselves as novices and only occasionally use data to drive actual strategies. 2022 will be a breakthrough year for data as companies start implementing tools like predictive A.I. to analyze market data, industry factors, and sourcing information to identify and find pricing trends. Data quality and access will need to be front and center in all procurement strategy and sourcing decisions.
#6. Future of Work 2022: The Great Resignation and the Impact of the Extended Workforce
The US saw a record 4 million resignations in November 2021. Talent scarcity remains a top concern as better opportunities and remote work options become the primary drivers for these shifts. Companies must proactively fill positions and increase talent acquisition budgets to meet industry demands. Employee retention rates will also continue to fall as competitors begin to recruit heavily in 2022.
The extended workforce enabled businesses to thrive during some very uncertain times, providing flexibility and scalability to modify as market and staffing conditions changed. This increased agility and scalability increased business continuity as work environments shift to hybrid or 100% remote models. The “digital enterprise” will become a reality as hybrid work, total talent management, and seamless talent acquisition become necessary in a volatile 2022 labor market.
#7. Procurement Technology Trends
From Ivalua’s standpoint, we’re starting to see a shift in the Source-to-Pay spectrum. Today, many more organizations have undergone at least some portion of procurement digital transformation and as they become more mature and given the criticality of supplier relationships, they are turning towards ensuring a holistic and integrated supplier management capability.
Previously, supplier management (including supplier information, risk and performance) may have been an afterthought, after you’ve automated your sourcing, contracts and procure-to-pay process. However, I believe that businesses are now seeing that a strong supplier management foundation (even beyond just tier 1 suppliers) actually improves the performance and efficiency of all source-to-pay processes. Of course, it is also essential to strengthening supplier relationships, lowering supplier risk, impacting ESG objectives, improving supplier innovation and more.
The Best Way Forward for 2022.
Building stronger supplier relationships in 2022 will set leading organizations apart from others. Leaders will greatly benefit from deeper collaboration, and as a result, increased supplier resilience. As the market continues to shift and evolve at a rapid pace, we need to pivot and prepare for these changes by prioritizing digital transformation and adopting best-in-class procurement technology.