I’ve been spending the last few Fridays sharing some predictions that Ardent has I have made about the procurement profession/industry in recent years because next week, we release our 2022 edition of the Procurement Big Trends and Predictions report. This annual report (and presentation) is one of the more enjoyable ones to write in that it blends both the market research that we do with the conversations we have and thought leadership that we publish.
Anyway, I thought it would be interesting to review and grade some of the predictions I made in 2021
Procurement 2021 Predictions – How Did We Do?
2021 PREDICTION: The Vaccines Work and Countries Slowly Gain Control over COVID-19
What we said:
Over the first few months of 2021, a large number of “Phase I” recipients (those most at risk who are qualified based upon their age, profession, or health condition) will receive their first dose, with the second dose following three weeks later…
While no vaccine is guaranteed to work 100%, it appears to most expert observers that the vaccines are working to inoculate recipients against the virus or, at least, against the most severe symptoms of the virus. This is positive news…
It is going to take months for the vaccine to begin to have a significant impact on society as a whole. And, while new strains of the virus may develop, Ardent Partners predicts that as we proceed deeper into the year that a majority of developing countries will begin to feel like they have better control over the virus and be in a much better position to fight against it. This will lead to productive discussions and plans focused on operating in a post-COVID-19 world.
What we got right… and what we got wrong:
We were correct about the vaccine roll out – they worked! – and their initial impact gave rise to optimism by last summer. Children returned to school, some people went back to the office (hybrid model mostly), and communities opened up. For a decent period of time last year, it felt as though we (the global community was headed in the right direction). But as COVID-19 ripped through other countries, new variants arose and quickly spread. Political opposition to masks and vaccines gained strength and by the end of the year, the Omicron was a heavy presence.
FINAL GRADE: B-
We were correct in predicting that the vaccines would work. However, we did not anticipate such virulent opposition to the vaccine. Economies have opened up but hospitals remain generally overwhelmed and COVID-19 remains a disruptive force. Things are better than 1 year ago, but COVID is not yet under control.
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2021 PREDICTION: The U.S. and Global Economies, Overall, Hold Steady
What we said:
This is not a financial recommendation, but rather, a prediction from Ardent Partners that the economies of the world, including the United States, do not drop into a deep, deep recession. Ardent expects volatility but not a massive and deep drop. While the underlying unemployment rates as well as the financial health of many industries (and local businesses) are all not positive, the impact has not been directly felt in the stock market or overall economy…
The U.S. stock market will be volatile until things revert to normal and will most-likely stay below its recent highs. But, as countries begin to gain control over COVID-19, employment numbers will slowly rise and the likelihood of a huge market crash becomes less likely.
What we got right… and what we got wrong:
The stock market remained strong in 2021. In fact, it was much less volatile than we thought. Economies remained strong as the job market went crazy with an extraordinary number of unfilled opportunities brought on by the Great Resignation. Employment numbers rose. Inflation appeared towards the end of the year, but was not a disruptive force in 2021.
FINAL GRADE: A-
We were mostly correct here. Despite the sizable impact of COVID on general life, global stock markets stayed strong and employment numbers increased. The markets were actually less volatile than we predicted.
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2021 PREDICTION: Procurement Drives Critical Business Strategies in 2021-2022
What we said:
In normal years, this prediction would mean that procurement is expected to expand its purview and in support of the business – getting involved in new business ideas, supporting M&A, helping expand into new markets, driving new product development, etc. But in 2021, Ardent Partners predicts that procurement will drive critical business strategies because CEOs and CFOs will be much more focused on controlling the “controllables.”
These “new” executive priorities will shift away from growth and expansion and instead hone in on initiatives that procurement can more directly control and impact – managing costs, driving strategies that positively impact cash, renegotiating contracts with suppliers to increase value, etc. In 2021, the critical business strategies at many enterprises will focus on matters that play to the strengths of procurement teams.
What we got right… and what we got wrong:
Procurement remained core to business strategy and bottom line results. However, because markets were generally strong, the focus on growth remained more important than the focus on savings.
FINAL GRADE: B
Of course, procurement remained important in 2021; however we did not experience a broad shift to cost management and savings.
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2021 PREDICTION: Enterprises Begin to Rethink their Global Supply Chains
What we said:
Given the events of 2020, Ardent Partners believes that it is inevitable that a majority of procurement organizations begin to rethink the designs of their global supply chains. Driven by a significant rise in “nationalism” and larger concerns for the level of security risk that is posed by having certain items manufactured abroad, there will be a push to localize large portions of some supply chains. Regulatory/legislative involvement will be a driving force for some industries, with mandates for changes with defined timelines enacted. Other enterprises will look at risk diversification as the primary reason to make changes.
Given the state of the economy today, Ardent does not expect aggressive changes to start in 2021. It is more likely that supply chain shifts are slow and gradual due to the switching costs involved.
What we got right… and what we got wrong:
Early in 2021, many CPOs were discussing a need to rethink their supply chains for national security reasons. But as demand stayed strong and even surged in some industries, the focus turned to execution. As delays in many industries and regions started to impact revenues, these discussions began again, but due to economic reasons more than political.
FINAL GRADE: B
Rethinking the global supply chain is something that is going to happen over the next decade. In 2030, many global supply chains will look different than they do today, for any number of reasons.
RELATED RESEARCH
Three “Macro” Predictions for Procurement in 2030
Two More “Macro” Predictions for Procurement in 2030
Ardent’s Other Predictions (through the years)
