For several years now, Spend Matters has been collecting and publishing a series of articles about predictions and insights on procurement, supply and services trends for the year ahead from expert tech and service providers in the market.
This year is no different and we’ve framed the subject around “insights,” highlighting providers’ observations from the year they’ve left behind and how they see them shaping the year ahead.
This series will run from mid-December to mid-January, then our analyst Bertrand Maltaverne will wrap up with his own take on the key themes that emerge.
In no order of preference, other than by the date they dropped into our digital letterbox, today let’s hear from Jag Lamba, CEO and Founder of Certa.
Simplifying processes for supply chain sustainability in 2023
2022 was a year of unpredictability. Russia’s invasion of Ukraine sent out shockwaves and the effects of the pandemic still lingered across the global supply chain. The S2P space has needed to either take on a greater appetite for risk or adapt to mitigate risk exposure.
There were also clear signals that the industry is going to have to work under new environmental, social and governance (ESG) regulations — sooner than later. In 2022 the SEC took the step of proposing regulations around climate-related disclosures for companies, similar to approved EU regulations.
This increased risk environment has encouraged sourcing teams to move away from suppliers in riskier geographies by reshoring or friend-shoring (moving production back to the US and to friendlier, more stable countries). It also requires increased due diligence throughout supply chains, as new sanctions mean some existing suppliers or their ultimate beneficial owner (UBO) could put a company in violation.
The likely-to-come ESG regulations also require sourcing teams to start the process of gathering emissions data. Two-thirds of a company’s emissions can usually be attributed to its suppliers, and those will need to be reported as well.
In order to achieve these disparate tasks, procurement teams have been utilizing platforms that can integrate non-spend functions into a single suite. This innovation has proven to be more than just a timesaver, as sourcing departments are becoming a hub for data and risk mitigation. Speed, transparency, efficiency and risk management are the name of the game now.
For 2023, these trends will continue and accelerate. S2P will look to innovations that increase transparency, eliminate silos and simplify processes. Heightened sanction risks don’t look to be easing off, and we know the road ahead for ESG regulation compliance requires a better way for companies to collect, analyze and report data from their suppliers, and quickly identify which suppliers aren’t meeting the mark.
As these platforms evolve and gather all these functions in a single digital platform, there is a push for “no-code” functionalities. This makes integrating and upgrading systems easier, as “drag-and-drop” functionality saves time and headaches when compared to a system that relies on updating code every time something needs to be changed. 2023 will see even more heaped onto S2P teams’ plates, so they’ll be looking for innovations that can help them through the complexity of bringing it all together.
Thanks to Certa for being a part of the series, and look out for more insights for the year ahead.
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