Top 10: Procurement Trends of 2024

From continued digital transformation and AI-powered advancements to the ever-increasing prioritisation of ESG and sustainability initiatives, it's been a fascinating year for procurement.

Here, Procurement Magazine takes a look at the top 10 trends across procurement in 2024.

10. Cost optimisation and value creation

While cost savings remain a primary objective, procurement's role has grown to focus on broader value creation. Procurement leaders are now looking beyond immediate cost reductions to consider long-term value, including sustainability benefits, innovation opportunities and strategic partnerships.

What's more, procurement teams are increasingly involved in product development, market expansion strategies and revenue-generating initiatives, with firms taking a much more holistic approach to supplier relationships and a deeper integration of procurement with other business functions.

Earlier this year, The Hackett Group's 2024 Key Issues research found improving cost reductions was the highest priority for procurement leaders, as businesses work against a climate of high interest rates, labour shortages and the challenges of growing revenue.

9. Agile procurement

So volatile is the procurement landscape that agile practices have become vital in 2024.

Companies are forming flexible procurement strategies to respond on a dime to an ever-fluctuating market, react quickly to supply chain disruptions and change their priorities.

Agile procurement aids rapid decision-making, iterative processes and close collaboration with suppliers and stakeholders. It allows organisations the ability to react to challenges and opportunities quicker and maintain some competitive edge in this ever-changing landscape.

A top priority at Neo Tangent, for example, is preparing clients for disruption. This mindset shapes the firm's approach to creating solutions for customers, with resilience "always built in".

8. Procurement orchestration

With companies constantly striving for increased efficiency, transparency and cost-effectiveness, procurement orchestration became pivotal this year.

Orchestration increasingly serves as the backbone of streamlined operations through its integration of functions such as supplier and contract management and analytics into a cohesive system.

These systems are making an impression across the industry and should most definitely be on procurement professionals' radar. 

Companies like Zip, Tonkean and ORO Labs have all emerged as leaders in this space and look set to take the momentum into 2025.

7. Blockchain for enhanced transparency

Blockchain technology is gaining traction in procurement thanks to its ability to provide unprecedented levels of transparency and security. It offers a tamper-proof record of transactions and movements throughout the supply chain, enhancing traceability and reducing the risk of fraud.

Blockchain can improve supplier verification processes, streamline contract management and provide real-time visibility into the entire procurement lifecycle.

With the PwC Global Economic Crime Survey 2024 revealing that procurement fraud is among the top three most disruptive economic crimes globally in the past 24 months, the tool is rising in importance.

Paul Brody, Global Blockchain Leader at EY since 2016, highlights how blockchain can assist procurement teams, emphasising the importance of privacy for industrial applications.

6. Talent development and upskilling

As procurement evolves, there's a growing need for new skills and expertise.

Organisations are investing in upskilling their procurement teams to adapt to new technologies and strategies. This includes training in data analytics, AI, sustainability practices and strategic sourcing.

Genpact is among those to have plough significant investment into upskilling its employees. This has included embedding Gen AI content into its Genome platform, an industry-leading approach for reskilling and upskilling.

5. Data-driven decision making

This year we've seen the procurement function increasingly rely on data to drive strategic decisions, with analytics being used to obtain insights into spending patterns, supplier performance and market trends.

Ivalua has introduced an Intelligent Virtual Assistant (IVA) powered by generative AI to enhance procurement operations across multiple facets.

This innovative tool assists in supplier research by gathering relevant information on existing and new suppliers, while also conducting specific research and summarising key trends within categories for market insights.

4. Supply chain resilience and risk management

The lasting impact of the pandemic, combined with economic instability and geopolitical tension, means procurement has been operating in something of a 'polycrisis'.

Procurement teams are now trying to get ahead of disruptions by diversifying supplier bases, implementing real-time monitoring systems and developing contingency plans for potential interruptions.

Samir Khushalani, a Partner in McKinsey's Houston office, says supply chain disruptions have prompted companies to rethink their globalised sourcing strategies.

Leaders are re-evaluating their supplier bases and exploring the possibility of sourcing from alternative suppliers with divergent risk profiles.

3. Digital transformation and cloud-based solutions

The digitalisation of procurement processes has become a necessity rather than a choice.

Cloud-based solutions are at the forefront of this transformation, offering scalability, accessibility and real-time collaboration capabilities. The adoption of these technologies is crucial for organisations looking to streamline operations, reduce costs and improve overall procurement efficiency.

GEP has helped a number of companies in their transformation efforts, including Costa Coffee. Costa is using GEP and its software to transform and automate its source-to-contract procurement process for all indirect spend, encompassing sourcing, contract and supplier risk management.

2. Sustainability and ESG initiatives

Sustainability is no longer a mere consideration but a core component of procurement strategy. Companies are increasingly prioritising eco-friendly suppliers, sustainable materials and energy-efficient technologies.

This shift is, of course, being driven by growing environmental concerns, regulatory pressures and consumer demand for responsible business practices.

Spend management specialist Coupa is demonstrating admirable leadership by treating sustainability as a priority, driven by a values-based culture. The organisation is dedicated to serving people and communities across the globe.

Coupa's latest ESG report focuses on how the company's platform, principles, innovation, people and community can create a better planet.

1. AI and predictive analytics integration

The integration of AI and predictive analytics is revolutionising procurement processes, bringing unprecedented intelligence and efficiency. These technologies are reshaping how companies manage supply chains, make purchasing decisions and address risks.

AI-driven systems can automate routine tasks like purchase order generation and invoice processing, allowing procurement professionals to focus on strategic initiatives.

Beroe, a global leader in procurement decision intelligence, is among those allowing procurement professionals to fully harness the power of AI. 

Its procurement intelligence platform, Beroe Live.ai, provides teams with unprecedented support, bringing together cutting-edge AI insight and human expertise. 

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