The Process to Develop Ardent’s Annual BIG Trends and Predictions List
Earlier this week, nearly 1,000 of you registered for our 8th annual Procurement: BIG Trends and Predictions webinar. If you missed the webinar, don’t worry – next week we’ll release the companion report which expands on the webinar presentation and goes into more depth. Today’s article is a prelude to the report.
I’ll start with a discussion of our process. Since 2014, Ardent Partners has gathered our senior analyst team together usually at our headquarters in Boston (but this year virtually) during the second week of January for a multi-day kickoff, during which time we dedicate serious hours to review the prior year’s research and main findings. We discuss our key research findings from our different market research surveys as well as briefings with technology providers, consultants, and investors. We also discuss our consulting projects, Chief Procurement Officer interviews, and general inquiries (more than 700 last year).
Once we’ve done an exhaustive reviewed of our own work in the prior year (which we use to develop the list of BIG Trends in procurement), we investigate the macro and global issues that are facing procurement and supply management teams everywhere. Most years we’re able to look at the early data from my annual CPO Rising Survey (which is available now – if you can spare 10-15 minutes, please take it). Finally, we review the topics of conversation from our annual CPO Rising Summit and for this year (our virtual events) to determine the direction of the overall market and begin to make our predictions. In sum, the webinar and the report next week is a culmination of all of those efforts from the collective Ardent team
A Few BIG Trends
#1 – THE GLOBAL PANDEMIC RAGES ON
No real discussion of what’s happening in the market can start without first discussing COVID-19. Last year at this time, we predicted that Global Supply Risk was at a 20-year high as the geopolitical uncertainty driven by the unilateral and unpredictable US trade policies set by the Trump administration, coupled with a likely recession was going to test the global supply chains of many, many companies.
It’s important to remember that today’s global supply chains are a largely 21st-Century phenomena, driven by the demand for lower-cost sources of supply and production and bolstered by the rapid advances in technology and communication. These global supply chains delivered extraordinary value to the Western-based corporations that initially moved supply off-shore in the pursuit of lower costs. Over the ensuing two decades, manufacturing capabilities expanded rapidly across the traditional low-cost regions (including Asia, Eastern Europe, as well as regions within Africa and across Central and South America) spawning the current age of globalization and innovation. it has gone largely unnoticed that global supply chains, by and large, are ill-prepared for any major global shock or event and remain almost universally untested.
Well, in 2020 global supply chains were tested, but not in the ways we imagined. Very few predicted this outcome with thousands dying each day in the US alone. In March 2020, Chief Procurement Officers and procurement leaders around the world were faced with an entirely new set of challenges, accelerated by a global pandemic that has disrupted an interconnected business world and its supply chain. Roughly 70% of every procurement team felt an extraordinary or significant impact. But, procurement was resilient. Our supply chains became resilient. Our teams, companies, and families were all resilient.
Right now we are closer to the end of this than the beginning, but it is clear that impact on procurement and society will far outlast the Coronavirus itself.
#2 PROCUREMENT’S IMPACT CONTINUES TO EXPAND
Today, most CPOs and other procurement executives are well aware of the impact that their teams can make, and there is good news to report. In 2021, a majority of CPOs (53%) believe that their departments made a major or significant impact on the enterprise over the last 12 months, while another 42% believe that their impact was solid or notable. And to bolster the case that procurement is trending up, only 5% believed that their impact was small, insignificant, or negative.
As a business function, procurement’s been on a major, multi-decade
Consider the following proof-points in 2021:
- CPOs (or their equivalents by role and title) now exist in more than 90% of large enterprises today, compared with less than 50% 15 years
- Procurement teams are significantly more likely to be organized as centralized business functions rather than as ad-hoc groups of buyers loosely populated across the
- In 2021, almost every procurement department has some type of annual or multi-year strategic plan in place, up from just over 40% in 2006.
- CPOs and their teams now have unprecedented visibility into business operations, performance, and risk, thanks in large part to advanced analytics, process automation tools, and a connected network of global trading partners.
- More than 70% of all CPOs have a direct reporting line (and direct accountability) to key enterprise executives such as the CEO (22%), CFO (32%), and COO (19%).
So, stay tuned for more BIG Trends…. but also, Predictions for 2021.
If you have a few minutes today, I’d appreciate it if you took our survey (Practitioners only) – if you do, you will receive a free copy of the report and receive priority when we launch our Roundtable Series next week.
