As new year strategies are discussed and old habits rethought, procurement teams are looking to the year ahead. We asked our CEOs and founders, David Doyle and Alex Miller, for their thoughts about where digital procurement is headed in 2023 and the key trends to look out for. Here are their predictions:
Macroeconomic uncertainty will drive a greater emphasis on resilience and agility.
Faced with macroeconomic uncertainty, along with pressure to make cost savings while also keeping an eye on the increasingly important long-term, companies are likely to start placing a greater emphasis on resilience and agility in their procurement strategies. This will change perspectives on what capabilities make the optimum balance. Teams are likely to need to strike a new balance between long term efficiency and the agility teams need to respond to the next shock – whatever it might be.
The historic strategy of having fewer suppliers will be reversed in favour of a diverse, de-risked supply chain.
As companies look to de-risk their supply chain, they are likely to favour a more diverse set of suppliers. This will replace the historic strategy of selecting just a handful, each covering many services and needs.
Reducing the complexity of their supply base has long been a priority of procurement teams. This allows companies to capitalise on economies of scale and minimize complexity. However, in the uncertain economic climate, companies are increasingly seeing single source supply arrangements as operationally risky. As resilience and the ability to respond reliably to shocks remain at the front of mind for procurement teams, companies are likely to want to make sure they don’t have all their eggs in a single basket.
Sustainability (ESG) will continue to play a key part in procurement decisions.
The importance of sustainability and ESG is not going anywhere in 2023. Consequently, this will play an important part in procurement processes. Data demands to evidence potential suppliers’ standings will become essential, making it crucial for companies to have systems in place to easily access this information. This will also extend beyond public companies into the private arena, where reporting requirements have been historically less accessible.
The focus will shift from automated to augmented artificial intelligence in the digital procurement space.
The distinction between autonomous and augmented sourcing is likely to become more pronounced, as a focus turns to technologies which can enable experts to use their own insights to make higher quality decisions faster, rather than taking humans out of the picture entirely with automation. Particularly in the analytics, data and intelligence category, new natural language models, deployed appropriately, will shift the conversation about ‘best practice procurement’ away from more and more automation and toward human augmentation.
AI will allow more information to be evaluated, ultimately leading to a reduced reliance on RFIs and RFPs.
AI will provide an easier way to gather and evaluate large quantities of information in an accessible and affordable manner. As a result, fewer companies will need to rely on traditional methods of information evaluation, such as RFIs and RFPs, allowing a greater level of self-direction and control over the data gathering process.
How can Forestreet help you reach your digital procurement goals this year?
Have you been asked to reduce spend in 2023? Looking to make your supply chain more resilient to shocks? Need to make sure your suppliers meet the highest ESG standards?
If so, Forestreet’s AI-driven tool can help.
Our intuitive platform helps you map, categorise, analyse and deeply understand any market in minutes. With comprehensive and real-time market data at your fingertips, you can confidently respond to supply chain emergencies and changing business needs with our agile tool.
To find out more about our platform, book a demo here.
Want more digital procurement predictions in 2023? ProcureTech has asked CEOs and Founders from the ProcureTech100 about their procurement predictions for 2023. You can read their top ten insights and predictions here.