If 2020 has taught us anything, it’s that we shouldn’t take things for granted, even if it’s the most basic things like visiting loved ones, going on holidays or even going to the office every morning. 2020 has taught businesses that they should always have a contingency plan in place for when the unexpected happens.
What has everything that happened in 2020 meant for procurement and how is it going to reflect in procurement 2021? Read some of our observations below.
More business meetings done remotely
We have clearly seen a shift in the way companies are interacting with their suppliers, their partners, their clients and even their employees. A lot of our day-to-day activities have moved online and businesses all over the world were forced to adapt to moving their business online. And many have done so, successfully.
However, is this new way of working going to stick going forward? Probably not 100% but it definitely showed us that if there’s a will, there’s a way.
Looking back at 2020, as a company, we managed to deliver multiple successful Source to Pay implementation projects 100% remotely. We have based the approach on previous remote Source to Pay implementations for clients – this is not new for us, however, what is new is that our clients were also fully home-based – a situation that some are not used to or were not expecting.
Going forward, at least for the first half of the year, business is still going to be done online through digital platforms, however, many people speculate that one of the things that we’re going to take from 2020 is that in some cases the same productiveness can be obtain from remote meetings. You can read more about this topic in one of our previous blogs, here.
The shifting role of procurement
As we’ve seen throughout the years cost optimization will remain procurement’s main focus, however, there is a shift in the way procurement is perceived within the business, now more than ever.
Today, in addition to recovering profitability and finding ways to make savings, companies face the challenges of shifting supply-market dynamics, changing ways of working and managing risk within their supply chain to make it less vulnerable to disruption.
Procurement’ role in risk management and social value has increased over the last year and is likely to continue to do so in 2021. The increased adoption of technology will be needed and in turn this will support procurement’s shift to broader role of managing supply chain and risk and increasing transparency.
Digital procurement & supply chain compliance
2020 has showed us the true value of having the right technology in place – if we weren’t already sure of it. When it comes strictly to procurement practices, having the right Business Spend Management system in place has helped companies better focus on their supply chain resiliency during the pandemic.
ESG was at top of most companies’ mind at the beginning of 2020, as their customers demanded more and more visibility over how they are managing sustainable and ethical supply chains. However, this idea was slightly put aside as last year’s events started to unfold. With that in mind, 2021 might just be the year of supply chain visibility. Companies will need to be able to use data efficiently as to quickly assess their suppliers and be data-driven when it comes to assessing whether the goods and services they are buying are sourced ethically, responsibly and sustainably.
Technology plays a huge part in making this happen, as many Business Spend Management platforms help companies get actionable insights into their potential suppliers, helping them identify suppliers that can both deliver savings and sustainability benefits.
Those companies that will prioritise digital compliance and having access to actionable data about their contractual partners that will allow them to monitor that all suppliers adhere to same level of ethical and sustainability practices, will be the winners of 2021.
Leveraging intelligent procurement
Continuing on from the previous point, many procurement experts believe that 2021 will be the year of intelligent procurement. Companies will begin to embrace intelligent procurement technology to capture data in the various procurement functions and activities and will augment the data with market intelligence and community data to generate automated insights about the best next action.
On top of this, leveraging intelligent procurement should enable companies to create forecasts and “what if scenarios” empowering procurement professionals to take the best decisions and mitigate risk.
Brexit & ensuring business continuity
Finally, in 2021 we should begin to experience the effects of Brexit. Of course, the new regulations will take time to understand and contracts will need to be flexible to ensure continuity of commerce and compliance with a new regulatory framework.
Proper contract management will play a big part here. Companies with contract management technology in place will be able to quickly gather the intelligence that will give them a competitive advantage over competitors who need to review these vital documents manually.
Of course, our observations are based on recent events and historical data. However, one of the most valuable business lessons we learnt in 2020 is the importance of having a contingency plan in place and always prepare for the unexpected. We are a visionary team, and our plans and strategy already prepares us for procurement trends for 2022.