4 Ways Procurement Will Evolve in 2023
It may be easy for procurement professionals to have a dampened outlook for 2023 due to ongoing supply chain disruption and a potential recession looming. Despite these market conditions, there remains cause for optimism, as procurement leaders uncover opportunities to help their organizations navigate bumps in the road.
Enhancing the employee experience, modernizing the procurement process, and emphasizing high-quality supplier relations will be key priorities for procurement leaders to help their companies maintain success. Here are four procurement predictions for 2023.
1. Economic conditions place tech investments under the microscope. In 2023, the digital transformation spigot will turn off unless companies can justify their technology investments. While companies previously emphasized moving fast, they will shift focus toward the total cost of ownership and increasing ROI from existing technologies.
For example, companies will look to drive value by unifying the overall experience for employees, business users, and suppliers, leveraging recent investments in digital transformation and workplace productivity.
2. Ongoing disruptions emphasize the need to modernize procurement. Procurement leaders at manufacturing companies experienced significant disruption in their direct materials supply chain in 2022. They expect this to continue into 2023, though it may ease by year’s end.
The supply chain crisis underscores the importance of leveraging modernized technology in bolstering supplier relationships. In 2022, 70% of companies were focused on improving supply chain visibility and 80% were looking for ways to be more agile, IDC noted in Supply Chains Must be More Resilient. Many manufacturers have invested in digital technologies in their supply chain, they just haven’t done it fast enough, according to IDC’s analysis.
The supplier crisis will evolve from logistics to a focus on streamlining procurement and finance workflows. The need for better insight and control will drive the need for more real-time visibility into supplier data, as well as a better user experience and supplier onboarding.
3. Companies will prioritize building stronger relationships with suppliers. Economic uncertainty and supply chain disruption will cause procurement leaders to double down on building strong supplier relationships that enable business agility. Companies must invest in relationships with their supply base to ensure they have the visibility, collaboration, and engagement that improving supply chain planning and activity requires.
4. Procurement’s business role will elevate. Procurement’s charter within an organization will expand to encompass compliance and employee experience. Companies will look to procurement to deliver not just cost savings but also ROI in the areas of speed, compliance, and employee experience.
Increased focus on regulatory compliance and data privacy transparency will broaden procurement’s remit within an organization. As companies face more pressure around meeting compliance mandates, they will rely on their procurement team to serve as a type of charter carrier for validating compliance in procurement-adjacent areas.
For 2023 and beyond, procurement professionals will look to automation to drive digital transformation, unify all existing procurement tools, and increase ROI. They will look to streamline and improve their processes to increase efficiency and effectiveness. And they will look to increase agility to become responsive to changing requirements.