Unstoppable procurement trends in 2023
As the world becomes more interconnected and businesses expand globally, the role of procurement has become increasingly vital.
As we look to the future, there are five key trends that procurement teams can expect in 2023.
These trends are likely to shape the way procurement is carried out, and businesses will need to adapt to stay ahead of the curve. In this article, we will delve into each of these trends, and the impact they will have on procurement in the years to come.
1: Increased Emphasis on Sustainability
The first trend that procurement teams can expect in 2023 is an increased emphasis on sustainability.
Sustainability has been a growing concern for businesses in recent years, and it is only going to become more critical as we move forward.
In 2023, procurement teams will need to consider the environmental impact of the products and services they source.
This means that procurement teams will need to evaluate suppliers on their sustainability practices, such as their use of renewable energy and waste reduction efforts.
We can also expect to see more companies setting sustainability targets and requiring their suppliers to meet them.
This will require procurement teams to work closely with suppliers to ensure they are meeting these requirements.
Furthermore, sustainability will also be a crucial factor in supplier selection. Procurement teams will need to identify suppliers who have strong sustainability practices to ensure they are aligned with the business's sustainability goals.
2: Greater Use of Technology
The use of technology in procurement has been on the rise for several years, and we can expect this trend to continue in 2023.
Procurement teams will increasingly rely on software and automation tools to streamline their processes, such as e-sourcing, e-procurement, and contract management.
The use of artificial intelligence (AI) and machine learning (ML) will also become more prevalent.
These technologies can help identify patterns and anomalies in procurement data, allowing procurement teams to make more informed decisions.
AI and ML can also assist in supplier selection, contract management, and risk mitigation.
However, it is worth noting that with the greater use of technology, cybersecurity risks also increase.
Procurement teams will need to ensure they have adequate cybersecurity measures in place to protect their data and systems.
3: Focus on Risk Mitigation
2022 was a year of significant supply chain disruptions, from the COVID-19 pandemic to natural disasters and geopolitical tensions.
Procurement teams will continue to focus on risk mitigation in 2023, ensuring that they have contingency plans in place to address potential disruptions.
This will require procurement teams to assess the risks associated with their suppliers, such as their financial stability, geopolitical risk, and resilience to natural disasters.
They will also need to evaluate their contracts to ensure they have adequate protection in the event of a disruption.
4: Emphasis on Supplier Relationship Management
Supplier relationship management (SRM) will become increasingly critical in 2023.
Procurement teams will need to establish strong relationships with their suppliers to ensure they are meeting their needs and expectations.
This will require regular communication, collaboration, and feedback.
Procurement teams will also need to work closely with their suppliers to identify opportunities for innovation and cost savings.
This will require a more strategic approach to supplier selection and management.
Effective SRM can also help businesses mitigate risks associated with their suppliers.
By establishing strong relationships, procurement teams can work with suppliers to address potential issues before they become significant problems.
5: Increased Diversity and Inclusion
Diversity and inclusion (D&I) have become increasingly important in the business world, and procurement is no exception. In 2023, we can expect to see a continued focus on D&I in procurement teams.
This means that procurement teams will need to evaluate their supplier diversity programs to ensure they are promoting a diverse supplier base.
This includes working with small and minority-owned businesses and prioritising suppliers who have demonstrated a commitment to D&I.
Additionally, procurement teams will also need to prioritise D&I in their own hiring and talent management practices.
This will require a concerted effort to attract and retain a diverse workforce, including implementing training programs that promote inclusion and diversity.
In 2023, procurement teams will need to be aware of these five key trends and adapt to stay ahead of the curve.
By focusing on sustainability, technology, risk mitigation, supplier relationship management, and diversity and inclusion, procurement teams can ensure they are meeting the needs of their businesses while driving value and minimising risks.
These trends are likely to shape the future of procurement, and businesses that embrace them will be better positioned to succeed in the years to come.
