The procurement landscape of 2023 is as dynamic as it has ever been. In these changing times, it's crucial to stay informed about the key trends and predictions shaping the industry. From the impact of geopolitical turmoil to the fading influence of COVID-19, and the rising importance of technology and ESG initiatives, procurement professionals face both challenges and opportunities. Explore the key points influencing procurement trends in 2023, based on the Procurement 2023: BIG Trends and Predictions report by Ardent Partners:
- COVID is Fading: While COVID-19 is still present in some parts of the world, its impact on business and procurement is diminishing in most Western democracies.
- Less Remote, More Office: Many organizations will rely on automation and outside services for procurement due to staffing challenges. CEOs will push for more office time, leading to a hybrid workplace model.
- Geopolitical Turmoil: Ongoing geopolitical conflicts, such as Russia's invasion of Ukraine, will continue to disrupt supply chains and impact markets.
- De-Globalization: Trade, investment, and immigration across borders will slow down as de-globalization accelerates, with rising tensions between the US and China.
- Supply Chain Disruptions: Global supply chains face challenges due to factors like sanctions, export controls, and increased risk awareness.
- Inflation: Inflation rates have been rising, and businesses will face higher costs and uncertainty. Procurement teams will focus on savings and combating inflation.
- U.S. Economy: Current predictions include a "soft landing" for the US economy, avoiding a recession, but uncertainties remain for the EU and other regions.
- Rising Cost of Capital: Central banks raising interest rates will increase the cost of capital, putting financial pressure on costs and budgets, making procurement more important.
- Collaboration with Finance and AP: Procurement teams will partner with finance and accounts payable departments to drive holistic processes, particularly in B2B payments.
- Category Management: Organizations will prioritize developing deeper category management capabilities to optimize spend and improve procurement strategies.
- ESG Initiatives: Environmental, social, and governance (ESG) initiatives will continue to gain momentum, driven by customer, employee, and investor demands.
- Technology in Procurement: Technology, including automation and artificial intelligence (AI), is crucial for procurement success. Digital intelligence and AI adoption will be imperative.
- AI's Impact: AI will gain more attention and traction in procurement, contributing to smarter decision-making and uncovering hidden opportunities.
In summary, procurement faces both great challenges and amazing opportunities in 2023, including the impact of geopolitical conflicts, the fading of COVID-19, supply chain disruptions, inflation concerns, the importance of technology and ESG initiatives, and the need for strategic collaboration and innovation in procurement practices.
