Looking Glass: Top 5 Procurement Trends for 2024

In the dynamic world of procurement, staying ahead of the curve is essential for driving efficiency, managing risks and fostering innovation – and as businesses grapple with rising costs, complex supply chains and an ever-increasing focus on sustainability it's the procurement professionals that are at the forefront of driving organisational success.

As we venture further into 2024, several key trends are shaping the procurement landscape. Let's take a look:

1. Digital transformation takes the lead

   Procurement continues to undergo digital transformation. Paperwork and isolated information systems are fading away, while modern procurement teams leverage automation and AI to streamline tasks, minimise errors and gain valuable insights.

   Investment in digital procurement tools is expected to grow throughout 2024, unlocking new efficiencies, reliability and ROI for supply chains. However, while technology plays a crucial role, it's not a standalone solution. Effective processes, supplier relationships and skilled personnel are integral to maximise the benefits of digital transformation in procurement.

2. Sustainability and ESG focus

   It's not just in the news – government regulation plays a part, too. Sustainability and ESG are top of mind for many companies wanting to ensure their supply chains meet strict criteria with regards to emissions and modern slavery laws. Having insight into suppliers and their suppliers is crucial to understanding and, if necessary mitigating these risks.

   Previously, companies focused on making sustainability and ESG commitments. Now, the focus is on delivering on those promises. This means clear reporting on everything from carbon emissions to social impact. To address this, some organisations may look for assistance from third parties to aid in identifying and managing sustainability and ESG obligations across their supply chains.

3. Strategic supplier relationships

   Suppliers have always been the bedrock of the supply chain and now more than ever with potential global economic instability it's more important than to find, nurture and build upon strategic supplier relationships.

   The pandemic demonstrated the need for robust, resilient supply chains. Moving from transactional relationships with suppliers to collaborative partnerships can help identify risks, aid in the development of contingency plans and ensure uninterrupted supply through trust and transparent communication.

   Supplier Relationship Management (SRM) tools are increasingly becoming pivotal in procurement strategies, strengthening relationships with suppliers in order to foster long-term partnerships that drive innovation, bolster supply chain resilience and elevate product quality.

4. AI, automation and analytics

   The world of procurement is undergoing a significant shift. While generative AI is a hot topic, its practical applications in procurement are still under development. In the meantime, the focus for 2024 is on leveraging AI and analytics to streamline processes and support strategic decision-making.

   Procurement teams are facing a complex and ever-changing landscape. Advanced analytics tools are helping them sift through vast amounts of data to gain insights into supplier performance, market trends and potential risks. This allows for better planning and proactive mitigation of disruptions. AI-powered scenario analysis is also emerging as a way to automate tasks and identify potential issues, freeing up human expertise for more strategic work.

   To capitalise on these advancements, businesses need to ensure they have the right tools and platforms in place. This may involve migrating to solutions that offer strong AI integration and advanced analytics capabilities. By embracing these technologies, procurement teams can make data-driven decisions and navigate the complexities of the modern supply chain.

5. Agile, strategic procurement teams

   As a whole, the procurement industry is facing challenges stemming from qualified skilled resource shortages and the inability to keep up with operational demands. Decision makers are increasingly looking to outsource elements of procurement to third parties where efficiencies and costs align.

   With the complexity of demands expected to continue to rise throughout 2024, procurement teams can benefit from streamlining low-value manual tasks in order to redirect efforts towards high-level strategic activities. Leveraging technologies like low-code platforms, AI, and process automation can facilitate this transformation, as well as leaning into procurement-as-a-service.

   To thrive in this evolving landscape, procurement teams can benefit from diversifying their talent pool and seeking professionals with non-traditional skills such as data analytics, sustainability expertise, and digital fluency. Upskilling programs are essential to equip professionals with the competencies needed for the future, ensuring that procurement remains agile, adaptive and able to drive strategic value in an ever-changing environment.

   Conclusion

   The procurement landscape is a rapidly evolving and constantly changing beast, marked by technological advancements, sustainability imperatives and shifting market dynamics. By embracing these trends, organisations can seek to unlock new opportunities, mitigate risks and achieve sustainable growth into 2024 and beyond.