For nearly a decade, our team gathers to discuss and review the prior year and lay out plans for the new one. We review, in depth, the key findings and trends from the prior years’ market research studies. We also discuss the highlights and takeaways from the previous year’s briefings delivered by solution providers, consultants, and investor groups.
Our goal is to develop a list of the big trends impacting procurement today as well as a list of predictions for the industry this year and share them in a published report.
While our promotions for the formal report – Procurement 2022: BIG Trends and Predictions – have ended, I wanted to share some of the highlights with you here.
BIG Trends & Predictions
Procurement’s momentum has not been thwarted by the global pandemic. If anything, COVID-19 and its impact on business and the supply chain has provided yet another opportunity for procurement departments to show their executives that it is a strategic function, fundamental to overall operations and enterprise success.
Ardent Partners has identified the “BIG trends” that have emerged from its recent research that will impact procurement in 2022. Ardent also makes a series of predictions based upon those trends that are intended to help Chief Procurement Officers, sourcing executives, category managers, and other procurement staffers focus on the important issues facing the profession in 2022.
BIG Trend #1: COVID’s Impact Continues
It is “déjà vu all over again” in 2022 as this year’s first BIG trend is that the impact from COVID-19 on procurement (and everything else) remains massive. The following is from a Marketwatch.com article that published on January 10, 2022:
“The U.S. is still weeks away from a peak in the number of new COVID-19 cases as the country continues to report soaring rates of new infections due to the rapid spread of the highly transmissible omicron variant. Airlines are still canceling flights, citing weather and outbreaks among workers. More lawmakers are testing positive for the virus.
“We believe cases in major metropolitan areas on the coasts will likely peak in the next two weeks,” said a health policy expert. Though infections with omicron are thought to be milder, the sheer volume in cases still means that hospitals are filling up. It takes about two weeks after cases first start to increase to see a rise in hospitalizations. The U.S. is expected to hit a record number of COVID-19 hospitalizations within days.”
But this is not an American problem. This is a global problem and stories like this one are being written in a majority of countries around the world right now.
And yet somehow, even with the millions of reported cases, hospitalizations, and deaths, not to mention the direct impact on large parts of most people’s lives, the overall impact of COVID remains underreported. For example, many experts believe that the actual number of deaths brought on by COVID-19 (directly and indirectly) is significantly greater than the numbers reported. When the “excess deaths” over the duration of the pandemic are considered, the body count is staggeringly higher. This is not a political statement. It is a fact that many millions more have died during the pandemic than what was expected based upon actuarial estimates.
Beyond these devastating numbers, it is also pretty clear that the massive impact on business and communities has also been underreported. That is because the full scope and breadth of this unprecedented event cannot be accurately gauged in real time. What is also clear is that the impact of the pandemic on procurement and society, at large, will far outlast the Coronavirus itself.
Prediction #1: COVID-19 Will Be the Top Story of 2022
On the eve of year three of the COVID-19 pandemic, it is more likely than not that 2022 will simply mimic the cycle of hope and despair that has been experienced since the initial outbreak – a positive medical breakthrough, a decline in cases, a relaxation of guidelines, a spike and regression, new guidelines, rinse, repeat. During the summer of 2021, optimism began to swell in many corners. The widely discussed “new normal” was approaching and while many were excited by the “new,” most were desperate for the “normal.” Then, the weather turned cooler and a sense of dread returned, along with several new variants. Rinse. Repeat.
There is nothing to suggest that the cycle will be broken in 2022. This is not going to end well, and, as far as predictions go, it is not going to end this year. The issue, of course, is globalization – because no matter what one country or group of countries may do to combat the pandemic, the frictionless flow of goods, services, and people around the world will keep countries closer to a lower common denominator situation than to a final solution, at least in 2022. Sadly, this prediction is the easiest one that Ardent has made in this annual series.
Prediction #2: The COVID “Hangover” Will Last a Generation
This prediction is a companion to the one above and, unfortunately, extends beyond 2022. COVID has taken us all hostage and left a powerful imprint on everyone reading this report, even
those wearing tinfoil hats. Despite Ardent’s optimism last year, 2022 will not be the year when the new normal takes hold. Instead, it will be another year where families and businesses alike remain trapped in limbo – unsure in the near-term and unable to plan for the long-term. And, as devastating as the pandemic has been to some people, the longer-term effects from it will be felt for at least a generation. The strain on most health care systems, a majority of supply chains, and many businesses has been unrelenting and also well-documented. But, most citizens in the Western world have been shielded by the more severe and longer-term impact of COVID by their governments, which have provided massive stimulus and support to prop up industries, companies, communities, and individual families.
Over time, large portions of the population are being shaped and transformed by the negative impact of the radical change experienced over the last few years. For example, a generation of students has been negatively affected. How can they possibly reclaim those “lost” years and begin to fill the huge gaps in their education? How will developing minds process what has happened and how will it manifest in their adult lives? How will this impact the global trade balance? For example, the US and many western nations have become service economies. Does the ability to accept, and more importantly, deliver services from anywhere in the world marginalize Western-based white-collar services and consulting firms? Even if they are not marginalized in 2022, has COVID accelerated a large shift in where and by whom these services are delivered over the next 20 years? That argument can be made. Can a dollar sign be placed on the loss of human experiences? The global citizenry is absolutely resilient, but there will be scars, they will be deep, and we will all have them.
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RELATED RESEARCH
Procurement 2022: Big Trends Part 1
Report Card on Ardent Partners’ Procurement 2021: Big Trends & Predictions
Three “Macro” Predictions for Procurement in 2030
Two More “Macro” Predictions for Procurement in 2030
Ardent’s Other Predictions (through the years)
