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 Kristian O’Meara, SVP of Strategic Initiatives at Jaggaer.
Pressures on Procurement
The outlook on the likelihood and timing of a potential economic downturn in 2022 seemed to change daily. Most companies have a strategy for handling polarities, whether a downturn occurs or not, but they don’t always have a strategy for handling a prolonged ‘limbo’ period. The uncertainty, combined with other macro-level forces — Russia’s war on Ukraine, inflation, talent shortage and continued supply disruptions — has put tremendous pressure on procurement.
When enough pressure is applied to any system, that system must adapt. The more pressure, the more significant those adaptations become. If economic uncertainty continues through 2023, it will significantly intensify pressure on procurement teams. Procurement leaders will need to rethink how they conduct commerce at a fundamental level to drive the type of resilience, risk mitigation, cost optimizations and efficiencies to help their companies survive, let alone thrive.
We expect more organizations will lean into AI and automation’s power across the B2B commerce experience to weather a likely economic storm. These tools enable teams to run more efficiently in a resource-strained environment and drastically reduce the time buyers and suppliers spend on routine and repetitive processes, like invoicing, purchase orders, responding to RFPs and contract management. Companies can have up to tens of thousands of active contracts at a time. Managing contracts manually is incredibly time-consuming. AI and automation can help teams address contract risk at scale more efficiently.
Enterprises can strip out costs by leveraging AI to get matched with suppliers that offer equivalent goods and services for lower prices. AI can help teams identify optimal areas within the business to reduce costs overall and ensure everything purchased across the organization is at the lowest possible cost based on industry benchmarks.
The pressure on procurement will sustain throughout the year, but remember that diamonds are created under pressure. Most companies strip down as much as they can to weather an economic downturn, then slowly ramp back up when the economy strengthens. Well-led and run companies will invest in automation and optimization solutions throughout any downturn. Imagine if you could optimize your business so that you can successfully operate with a downturn cost structure when the economy bounces back? This would have a profound bottom line impact and is the type of value that the right mix of technology can deliver. The organizations that take steps now to revolutionize their commerce experience will have a significant competitive advantage.
Thanks to JAGGAER for being a part of the series, and look out for more insights for the year ahead.
If you need to find the right procurement technology and provider for your business needs next year, Spend Matters “Procurement Technology Buyer’s Guide” and TechMatch can help.
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And if you are looking for procurement services providers to help you with your 2023 decisions, look no further than our Procurement Services Market Landscape Directory.