[Editor’s Note: Ardent Partners recently published its Procurement-themed report, “Procurement 2024: BIG Trends and Predictions.” Over the next few weeks, this site will feature articles highlighting the key discussion points from the report.
Chief Procurement Officers and their teams head into 2024 with a continued lack of clarity and a need for caution. While a recession was avoided last year and inflation slowed its pace in most regions, economic and overall market uncertainty remains. In addition, geopolitical unrest in the Middle East and climate conditions in Central America are causing big delays and increased costs in global shipping, forcing many procurement teams to seek alternative sources of supply. While the details fluctuate year to year, procurement’s headline remains the same. In 2024, CPOs face a series of new challenges that must be managed while operating with high uncertainty … AND great opportunities exist for the teams who are best prepared for them.
Over the next few weeks, we’ll feature the BIG trends in procurement followed by equally BIG predictions for 2024 that will help CPOs and procurement professionals understand the key issues at hand and better prepare them for the year ahead.
BIG Trend #8 – Business Travel Risk Is at an All-time High
In a post-pandemic society, the return of business travel was a comforting sign to many that the world would and could revert to earlier, simpler times. However, there remains de-stabilization in the geopolitical and economic world order due to a heightened sense of uncertainty coupled with unpredictable actions of bad actors. The harsh reality is that business travel risk is at an all-time high.
Whenever possible, procurement should partner with business travel teams and business travelers to develop, communicate, and enforce stronger travel security protections by utilizing solutions that can centralize the management of business travel, supporting safer trips and more secure activities for all travelers. In cases where procurement is not directly involved with business travel, it can offer resources and support to help the travel team develop new risk management strategies.
BIG Trend #9 – The Growing Impact of “Community” Intelligence
Collective wisdom surpasses individual brilliance. While the events of the last few years pushed more workers/teams to operate remotely, new concepts of community have emerged, driven by the advancements in technology and workforce collaboration, enabling enterprise teams to advance and mature despite their locations. The fast-evolving landscape of supply management technology, networks, and suite platforms enable procurement teams and their trading partners to communicate, collaborate, and execute business transactions. These platforms and business networks foster internal user engagement and allow procurement teams to communicate industry trends, regulatory changes, internal best practices, as well as supplier offerings and capabilities, better price discovery strategies and reusable sourcing templates and requisition workflows.
While broadly leveraging shared “team” knowledge can empower procurement teams to reach new performance heights, the ability to connect to much larger online networks and/or communities comprised of hundreds or thousands of distinct procurement organizations actively participating and sharing information (e.g., data, metrics, best practices, technology workarounds, etc.) can be game-changing. Typically supported and managed by solution providers, these emerging communities are changing the traditional corporate mindset about what is and what is not proprietary information. The result is that more procurement leaders are sharing (in an anonymized way) many of the “secrets of their success,” enabling other members to improve at a faster pace.
BIG Trend #10 – CPOs Take the Suite Approach
Ardent Partners’ recent survey of roughly 350 CPOs and other procurement leaders found that there continues to be a strong push by procurement teams to adopt “solution suites” instead of a collection of standalone or one-off solutions. A full 65% of all enterprises that have made an investment in supply management technology over the last two years took a suite-based approach to their new technology deployments, including Strategic Sourcing suites, P2P suites, full Source-to-Settle suites, and multiple applications within one RFP. This is a sizable increase experienced over the past decade, driven by the desire/need to manage fewer technology vendors, allowing users to operate within a single UI and data model.
BIG Trend #11 – The Growth of Contingent Workforce Spend
Today’s extended workforce represents a transformative shift from its earliest days as a complex category of corporate spend. A decade ago, the average percentage of non-employee labor (i.e., temps, consultants, contractors, etc.) was roughly 30% of a company’s total workforce. In 2024, that figure has grown to essentially half (49%) of all workers. This means that businesses are spending a significantly larger amount to extend their workforce and remain more financially flexible. The spend has grown in size and strategic impact as outside workers in the gig economy tackle more important and valuable activities and projects. The continued growth of a non-FTE workforce means more spend in this category. HR and business stakeholders can benefit from procurement’s expertise in sourcing and managing such spend.
BIG Trend #12 – The War for Talent Continues to Escalate (CPOs Need a Plan)
Staffing shortages have led to a very real “war for talent.” The stakes for finding, attracting, and hiring the right talent remain high. Record-low unemployment numbers coupled with all-time-high job openings have led to struggles for many companies. This war for talent has emerged with many companies increasingly pressed to staff basic operations. The hard truth is that there is no single solution for global staff shortages that are going to continue for the next few years. Accordingly, CPOs must start developing new recruiting strategies and contemplating different staffing models, including a greater use of contingent workers (see Trend #11) to augment their staffs and ensure operational work continues uninterrupted in 2024.
