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Top 5 procurement trends for 2022

by | January 17, 2022

2021 has been an interesting year. We learned how to live through the pandemic and how to adapt to the new ‘normal’ in the way we do business. We also had to live through supply chain disruptions and learn how to manage them in a way that creates a minimum business impact.

Now that 2022 is here and experts have identified the main trends that are going to affect procurement this year, procurement leaders need to make sure they stay competitive and find ways to incorporate some of these trends into their transformation plans. These are the top 5 procurement trends for 2022 that we identified:

1. Sustainability

2022 will be the year of sustainability in procurement. While many have dabbled with the idea of sustainability in 2021, this year it’s time for procurement organisations to take a more ‘hands on’ approach. Your company might be having a negative impact on the environment, without even knowing it. It’s time to gain visibility over sustainable procurement practices. Stakeholders are becoming more and more preoccupied with how organisations choose and collaborate with their suppliers in a way that improves their environmental performance. It is procurement’s responsibility to understand and improve the impact the business is having on the environment.

2. Incorporating small local suppliers into your supply chain

There are a few reasons why we see this trend emerging, some of them having to do with ESG reasons, like supporting small business owners and local communities, while others have to do with the supply chain disruptions we have seen over the last 2 years. Incorporating local suppliers into your supply chain can help ensure business continuity and reduce supply chain costs.

3. Ethical sourcing

According to CIPS, ethical sourcing is the process of ensuring the goods and services being sourced are obtained in a sustainable and responsible way, that the workers involved in the process are safe and treated fairly and the environmental and social impacts are taken into consideration during the sourcing process. With this definition in mind, we need to understand that technology can play a huge role in managing procurement processes and ensuring supply chain transparency. A digital transformation process can help procurement departments become the corporate social responsibility advocate within the organisation.

4. Digitisation & automation

The pandemic has showed us how outdated some of our processes are. Did we really still need paper invoices and handwritten signatures? Apparently, for the most part, when we can manage without them. Long are the days when digitisation was a ‘nice to have’ feature for your procurement organisation. Digital procurement transformation is now a matter of WHEN not IF. In order to maintain a competitive status businesses need to digitise and move away from a paper-based procurement function. Without a digital transformation, procurement leaders have a limited ability to drive strategic insights from the data they collect. Sophisticated data analysis tools are needed to drive agile decisions from the large amount of data companies collect.

5. Risk management

When looking at the business environment, one of the most important lessons the pandemic has taught us is the importance of having a risk management strategy in place. Experts consider procurement to be the first line of defense when it comes to risk mitigation, especially when it comes to third party risk. Identifying risk at an early stage in the sourcing process minimises business impact. Procurement technology and automation can help companies identify risk at an early stage, monitor suppliers for early indicators of threats and identify regulatory changes or economic trends. Of course, risk management technology is just part of the solution and it needs to be part of a risk management strategy. Predicting the future is an impossible task. However, preparing for different scenarios, especially in today’s economic environment should be top of mind for procurement leaders. Having the right technology, processes and strategies in place can make the difference between success and failure.