In recent times, a lot of emphasis has been placed on the procurement function as being strategically important to the business. It drives value, generates massive savings opportunity, and increases the overall operational efficiency. By using proper procurement processes including supplier relationship management and category management, organizations are able to treat the effective procurement of indirect costs, as a strategic function. With technology changing at a rapid pace and procurement practices being regularly updated, the trends within the procurement function are ever changing. So here are the top procurement trends that are all set to take off in 2018:
Top 10 Procurement Trends in 2018
#1 – Cognitive Procurement
The year 2017 was dominated by the big data hype, however this year though, the standard has been raised up a notch with
professionals turning towards cognitive procurement. It goes far beyond the automation of manual and repetitive tasks and assists supply chain managers in decision making in a complex and dynamic environment. Additionally, it is now possible to automate spend analysis, supplier management, and contract lifecycle management. Its true power can be unearthed when natural language processing (NLP) comes into play, where it can go through texts in the contract and policies to help professionals in spot buys, identify the best value, and perform contract analysis.
#2 – Cybersecurity
As the whole world adopts digital technologies, the procurement trends slowly shift towards cyber security more than physical security. The year 2017 had numerous cyber-attacks with malware and ransomware troubling procurement professionals to keep their data safe. Cyber-attacks such as Shadow Brokers, WannaCry, Petya, and Cloudbleed caused a lot of problems to the businesses all around the world.
#3 – Brexit causing disruption
Brexit can be considered the biggest political news with the potential to create a massive impact on the world economy. Since it affects business and the supply chain functions, it is one of the hottest procurement trends to cause disruption even in 2018. As many companies decide to move their supply chain out of the UK and labor market getting highly affected, procurement professionals will have a tough time making adjustments.
#4 – Blockchain
The procurement function is highly dependent on provenance, decentralized coordination, and transaction history. Since supply chain and procurement decision are all based on data blockchain is one of the top procurement trends in 2018.
#5 – Could technology and IoT
Cloud-based technologies along with IoT is expected to remove physical boundaries and create a centralized system thereby increasing the efficiency and productivity of the supply chain and procurement function. This procurement trend is expected to give rise to the popularity of Software-as-a-Service (SaaS) applications and encourage even the small businesses to reap the benefits of such services.
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#6 – Corporate social responsibility (CSR)
Another procurement trend gaining traction is the increased pressure for businesses to involve in sustainability practices as a part of their CSR activity. The need for sustainability is heightened by the fact that consumers now prefer brands that are doing environmentally or socially good.
#7 – Procurement and supply chain collaboration
Collaboration as a procurement trend is gaining prominence across all business sectors. As a part of their strategic move, businesses are collaborating business functions including procurement and supply chain. For instance, e-procurement systems allow stakeholders all across the company and suppliers to share and manage valuable data online.
#8 – Innovation
Companies have to rely on innovation in a bid to gain a competitive edge against the competition. Companies will have to be more risk-averse and seize opportunities to embrace innovations as implement the latest procurement trends. Although it may involve significant costs or pose challenges at the start, it usually pays itself up and helps improve profits for business in the long run.
#9 – Simplicity
Although the majority of the procurement trends call for complex technologies and complex benchmarks, there is still room for simplicity and easy-to-understand goals. For instance, cost advantages and cash flow improvements are still the driving force of procurement and supply chain functions.
#10 – Nearshoring
Over the past few years, a majority of the companies from the developed nations were jumping on the bandwagon for outsourcing their business processes in a bid to reduce costs. However, nearshoring is amongst the new procurement trends this year as companies try to exploit country-based opportunities, shared laws, and have closer control of procurement and supply chain functions.
For more information on the top procurement trends of 2018, big data in procurement, innovations, blockchain technologies, and nearshoring:
To know more about the latest trends that are revolutionizing businesses in 2019, click here:
5 Key Procurement Trends That are Crucial for Procurement Organizations in 2019
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