Continuing our series of procurement and supply chain related predictions for next year, we have gathered a variety of predictions from leading vendors in the procurement and supply chain market, and will add our own sprinkling of endorsement from analyst Magnus Bergfors in our own roundup piece to follow.
Today let’s hear what spend management giant, SAP Ariba and vendor management system expert SAP Fieldglass have to say in the second three of their six predictions.
Purpose in procurement will drive environmental and social impact while driving business value
There has been a general awareness of environmental and societal issues for decades, but now we are seeing a sense of urgency and demand for real change, propelled by easy-to-share information, compliance requirements and a growing demand for transparency. Consumers will vote with their dollars and because of this companies are leveraging their impact on issues such as climate impact, forced labour and impact on livelihood and job opportunities as part of their brand promise. To be credible, the smart ones will shift from focusing just on cost savings and compliance to true value creation, and avoid green washing. Squeezing suppliers on cost just doesn’t cut it anymore. Buyers and suppliers are coming together to create value for their mutual customer, and where else can this happen but from the beginning of the procurement process when sellers come calling with their business card or buyers scan the globe for the best suppliers? In 2020, watch for more and more businesses to focus on developing transparent, sustainable relationships that have a positive impact on both the environment and society.
– Padmini Ranganathan, Global Vice President, Risk and Sustainability, SAP Ariba
Artificial intelligence will be fully integrated into supplier management
In 2020, businesses will extend and accelerate output of existing intelligent technologies such as AI, by applying them to different business operations and integrating them with one another. The supply chain is a great example of this. For instance, AI will disrupt the manual, error-prone process of managing vendor contracts by automating the process and applying intelligent algorithms. And, AI will be integrated fully into the supplier management process, helping identify high-risk suppliers before purchases are made, to ensure suppliers are financially, environmentally and ethically sustainable.
– Drew Hofler, Vice President of Portfolio Marketing, SAP Ariba and SAP Fieldglass
Businesses will adopt a values-driven approach to procurement
In 2020, businesses will start to seriously take account of the ethics and values of their customers to drive procurement decisions. As issues such as sustainability, diversity and working conditions increasingly displace price in the buying decision, businesses will need to adopt a values-driven approach to spend management to ultimately address them. It’s an exciting time to be in procurement: breaking out of the back office and getting to the front lines.
One example of where businesses will look to make a tangible difference is with plastics. Redirecting even a small portion of global spend on packaging to pre-certified suppliers of recycled plastics and alternatives can have a tremendous impact. These suppliers can then grow, reaping benefits from economies of scale, and then start to lower the costs of their products. Ultimately, this practice will make sustainable materials more widely available and economical for buyers. In the next year, inspired by their customers, businesses will leverage spend management and business networks to make a dent in these intractable issues.
– James Marland, Global Vice President, SAP Centre of Excellence for Spend Management, SAP Ariba and SAP Fieldglass
Thanks to SAP Ariba and SAP Fieldglass – and look out for more solution provider predictions over the next few days. It will make interesting writing for the end of 2020 to see which were most accurate!
Please note that the order of vendor predictions in this series is based entirely on the order in which they dropped onto our digital doorstep, nothing more.
