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Top 4 Business Drivers for Investment in Procurement Transformation 2023

Procurement Strategies Investment 2023
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Procurement plays a critical role in the success of an organization and requires the right tools, strategy, and people to remain competitive. Disruptions are never going to end. It is an organization’s prerogative to remain proactive to stay ahead of the competition. Investment in Procurement is essential for organizations to remain competitive and proactive against disruptions. Organizations must stay abreast of the changing landscape by considering procurement priorities such as Supplier Risk Management, Co-Innovation, ESG mandates, and Compliance.

At its core, procurement strategies are all about managing the change aimed at driving continuous improvement in the supply chain. This requires expertise across both people and process aspects, and the ability to build strong relationships with suppliers.

With a focus on realizing a continuously improving procurement function, key objectives are well with an enterprise’s reach. Procurement Leadership Agenda and Narratives (PLAN) 2023 aimed to help organizations realize a continuously improving procurement function by exploring the latest trends and challenges in the sector. It also provided insight into building resilience through technology, people, and processes concerning the continuous improvement of the supply chain.

With this knowledge, procurement leaders can make critical contributions toward organizational success in this new year.

Business

During the PLAN 2023 – APAC Edition discussion, 4 key drivers for Procurement Transformation Investment Strategies were highlighted, which have been discussed below.  

1. ESG Adoption and Integration:

As the business dynamics continue to change, so do the sourcing and procurement mandates. In recent years, there has been an increased focus on environmental, social, and governance (ESG) issues, and this trend is likely to continue in the near term. As a result, forward-thinking procurement leaders are beginning to integrate ESG considerations into their enterprise’s procurement processes. Organizations have started to walk the talk in terms of implementing ESG policies.

Organizations that successfully navigate the challenges involved in ESG implementation will be well-positioned to succeed. Technological capabilities can be leveraged to be able not only to quantify but also to measure continuous improvement. We have discussed these benefits in more detail in one of our new eBooks. You can gain ESG adoption insights by accessing the eBook here: New Rules for a New World

2. Supply Chain Resilience:

The unprecedented disruption caused by the pandemic has highlighted the importance of supply chain resilience. Organizations must build tough and robust supply chains to cope with these kinds of shocks and stay competitive in the long run.

Working closely with suppliers is essential for mitigating risk and ensuring a successful and sustainable operation. The KPIs for Supplier Risk and Performance Management provides valuable insights into how organizations can utilize the latest technology, people-centric approaches, and process optimization strategies to ensure their supply chain remains resilient against external disruptions.

3. Innovation ecosystems replacing traditional supply chains:

When we refer to supply chains, these have now evolved into ecosystems that can sustain on their own and offer significant scope for driving innovation for all ecosystem players. This not only helps organizations to become more efficient but also to stay ahead of the curve. Building a competitive advantage and leveraging feedback from the supply ecosystem are some of the many benefits that an efficient supply network can provide.

On a similar note, the concept of “co-creation” is prevalent in creating supply ecosystems, as suppliers and customers can furnish the best feedback for products, thereby assisting in the product development process. If a supplier network is vast enough, organizations can be at a better vantage point vs. competitors, who probably aren’t treating their supply chain as a value chain.

Forrester’s Senior Analyst, Jeffrey Rajamani discussed the future of supplier networks in great detail which you can watch in this keynote session.

4. AI-Powered Software:

AI has gained momentum, and there is hardly anyone left who does not appreciate the application of AI in modern IT stacks. In the case of procurement, AI can help reduce costs and improve efficiency if there is good quality data available for training AI/ML models.

AI can automate manual processes and provide the skilled workforce more time to focus on strategic aspects of the business. It can help managers make more informed decisions using data analytics. Such tools can provide users with insights into spending analysis, making it more beneficial for organizations as cost saving continues to be a priority.

Adopting AI-powered strategic procurement software, however, requires acceptance across the board and business-IT alignment. Without trying out the capability of what AI can do alongside your procurement software, its entire capability will remain hidden.

To know more about how AI can help improve your procurement efficiency, Experience Merlin AI.

In Conclusion:

While the four drivers we’ve discussed are currently dominating the procurement strategies debates, there are many other trends to watch out for in 2023. Businesses that act early and invest in procurement strategies will be well-positioned to remain competitive and maximize returns over their long-term cycles.

ESG adoption, supply chain resilience, innovation ecosystems and AI-powered strategic procurement software today may merely provide a competitive edge – but they could be the standard tomorrow. Strategic investments early on can help businesses find themselves ahead of the curve when it comes to the 2023 market landscape.

Investment in a modern platform isn’t just an opportunity to get ahead of trends – it’s an investment in your success for the years to come. You can read what thought leaders have to say about these trends in our latest eBook: PLAN 2023: A CPO Perspective of Asia-Pacific or watch the discussion on-demand in our Video-Hub.

Related Read:

  1. Procurement automation: How can it help in procurement transformation? 
  2. Understanding Blockchain in Procurement and Its Impact  
  3. Blog – One Size Doesn’t Fit All: Why Supply Chains Need Micro-Segmentation?
  4. Procurement vs Purchasing– Understanding the Difference 
  5. White Paper – Unraveling Cognitive Procurement: Unlocking Efficiency With AI
  6. Webinar – New Rules for A New World: Why Procurement Must Take the Lead in Accelerating ESG Adoption
  7. Whitepaper – Making Procurement Performance Count – A 3 Step Approach
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Namrata is a content writer with over three years of experience in the field. She has a Master’s degree in Marketing and is passionate about writing, and reading. Namrata loves experimenting with different genres of writing and enjoys working on creative projects. When she’s not writing, you can find her exploring new bookstores or spending time with her books.

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