A few weeks ago, I shared with you some of the BIG procurement trends that we at Ardent Partners, in conjunction with our sponsors, Beeline and Ivalua, shared on our Procurement: Big Trends and Predictions webinar that we host each January. There are a lot of trends in business, politics, society, and technology, and from these trends emerge a dozen predictions we have made for 2018. Here are six more BIG procurement predictions for 2018!
Big Prediction #7: Weather Cataclysm
In 2017, weather events had devastating impacts on the Southwestern and Southeastern United States and Caribbean island territories, including the U.S. Virgin Islands and Puerto Rico. Hurricanes Harvey, Irma, Jose, and Maria hammered those regions, causing billions of dollars in damage, widespread and sustained business disruptions, and between 500 and 1,500 lives to be lost. Much of the death, destruction, and disruption occurred on Puerto Rico, where a third of the island’s 1.5 million residents are still without power five months after Maria.
The 2017 Atlantic Hurricane Season was a glaring example of how merciless and relentless Mother Nature can be, making the expression “When it rains, it pours” seem like an egregious understatement. Based on 2017 alone, one can reasonably assume that 2018 also will be eventful. Moreover, as the world’s climates continue to change (e.g., Arctic glaciers and permafrost melting at faster rates; sea levels rising; irregular seasonal weather patterns in certain parts of the world), the likelihood of additional cataclysmic weather events increases.
As a result, Ardent Partners predicts that businesses and countries will experience further cataclysmic weather events in 2018. Business, legal, and supply risk managers need do begin planning for the worst (if they have not begun already), and ensure that they: understand their legal liabilities, have resilient supply chains (they have back-up or redundant suppliers), are versed in weather-related contingency plans, and are equipped with the resources (human and technical) to manage what lies ahead as they stare into the abyss.
Big Prediction #8: U.S. Economy Avoids Recession
Popular opinion has been that the dual winning streaks of the U.S. economy and Wall Street are about to come to an end; reasons being that the economy might overheat, that inflation might increase too fast, that the markets have been in a “bubble” and, if the 10-year average for markets is correct, that the bubble is about to burst. Although Wall Street indices have seen significant fluctuation thus far in February (resulting in the largest single-day drop in the history of the Dow Jones Industrial Average), and inflation has crept up a little faster than expected, Ardent Partners predicts that the U.S. economy will avoid recession in 2018.
Buttressed by the $1.5 trillion tax breaks that the Trump Administration and the U.S. Congress gave to U.S. businesses and workers before the New Year; the growth in wages; and the continued growth in non-seasonal jobs, the U.S. economy should be in good shape in 2018. We predict that job growth will slow, based on numbers released by the U.S. Department of Labor; but overall, and baring any major geopolitical event that scares the markets or disrupts commodity trading, the U.S. economy will avoid recession this year. We cannot say the same thing for 2019, though, so do not get complacent.
Big Prediction #9: Industry 4.0 Technologies Become Better Integrated into Standard Supply Management Solutions
Over the past couple of years, the supply management industry has seen the rise, proliferation, and advancement of Industry 4.0 technologies, including 3-D printing, artificial intelligence (AI), augmented reality, Blockchain, connected devices (the “Internet of Things”), and robotic process automation (RPA). Ardent Partners predicts that in 2018, technology providers in the space will successfully integrate many, and perhaps all of these technologies into standard supply management solutions. For example, the rise of “Procurement 4.0” technologies and “Cognitive Procurement” overall will mean:
- Source-to-settle solution suites will blend AI component technologies, like machine learning, natural language processing, and personal assistants end-to-end — from upstream sourcing to midstream procurement to downstream payments — resulting in a more “intelligent” and adaptive user interface (UI) and an enhanced user experience (UX);
- Supply risk management tools will increasingly leverage Blockchain distributed digital ledgers in order to gain end-to-end visibility into commodity / product sourcing and shipping, which will enhance compliance to supply chain track-and-trace, auditing and reporting, and other “Know Your Supplier” laws and regulations;
- And connected devices / IoT will increasingly link business managers and line-of-business users with distributed digital networks, collect system and user data, and pipe this business intelligence back to the enterprise to inform and influence decision making.
Big Prediction #10: Second- and Third-Generation Industry 4.0 Technology Will Be Transformative
On the heals of our last prediction, we also predict that second and third-generation Industry 4.0 technologies, like AR and RPA, will transform the supply management industry. As the nature of work changes, and as we place more value on strategic, value-adding work, enterprise software developers become incentivized to facilitate the transition of tactical, transactional work away from knowledge workers and onto machines. Any business tool that makes an analyst or manager’s life easier can be very lucrative. As a result, Ardent Partners predicts that RPA will come of age in 2018 and enable more sourcing and procurement practitioners to be more strategic in their planning and execution. We also predict that the industry will gravitate towards AR-enabled technologies that will fuse more data and intelligence right onto our desktops or right onto our smart glasses, and also make the world smaller.
Big Prediction #11: The New World of Work Continues to Take Shape
As the “consumerization” of business continues unabated, Ardent Partners predicts that on-demand talent networks continue to increase and flourish. As business users, like hiring managers and HCM / HR staff, seek more specialized talent; and as that talent migrates towards 1099 / contract-based work, business users will be able to fill niche job vacancies by leveraging on-demand talent networks that feature drill-down and filter capabilities to lead hiring managers to the right candidate for the job.
Moreover, business agility will require flexible, more educated executive thinking. Business leaders, like the CPO, will need to wrap their heads around a broader array of responsibilities falling within procurement’s purview, and within a quicker time span. For example, CPOs increasingly have to manage the cyber security risks emanating from their supply base, which requires the typical CPO to get smart enough and fast enough to make smart decisions based on an area of expertise and skillset that they likely lacked.
Lastly (and it seems kind of intuitive), but Ardent predicts that the evolution in technology and innovation will ultimately optimize work in 2018. As more business solutions and tools feature embedded analytic and cognitive capabilities, they will enable business users to leverage the power of AI and advanced analytics and put Big Data to use. There is a ton of value in the data that business users, enterprises, customers, and suppliers create on a daily basis; systems and tools that enable users to leverage that data will make them smarter, more effective, more efficient, and more valuable.
Big Prediction #12: The Future of Work Takes Hold
The Future of Work is a hot topic here at Ardent Partners, and especially on CPO Rising. And today, we are excited to predict that it will truly take hold in 2018. By the “Future of Work,” we mean that new ways of thinking and new ideas will spark transformed approaches to how work is done, addressed, and ultimately optimized. We mean that innovation across all business units, functions, and locations will occur, including the application of AI, Blockchain, and AR. We mean that new approaches and strategies will emerge in how talent is engaged and sourced, and how it is better linked and aligned to work, projects, and initiatives. And finally, we mean that interconnected key business processes, systems, solutions, workers, and partners (i.e., omni-channel networks) will create a “boundary-less” and digitized organization. Are you excited to for the Future of Work? We are! And you should be, too.
Final Thoughts
Two months into the New Year and we’re already starting to see some of these predictions come to fruition. Tech and innovation will roll on unabated, whether or not the economy or the markets see some fluctuation. And the New World of Work, and the Future of Work, in particular, is here to stay. Enjoy the year ahead.
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