Despite the massive challenges brought on by the global pandemic, most procurement organizations enter 2023 with the wind at their back. But the sailing will be rougher for many procurement organizations, and sourcing teams must be ready for the unexpected throughout the year.
The latest Ardent Partners’ research reveals that procurement’s long-term future remains bright, even if things look challenging in the near term. Here are some predictions based on the expected inflationary environment most businesses are in.
First the CPO-CFO partnership will thrive because both inflation and supply risk are at the top of each of their agendas.
Second, once the economy begins to slow down and the stock market corrects, the pressure to find more savings will increase for most procurement departments.
Third, supply assurance will be a make or break concern for many CPOs, and as a result “low price” suppliers will lose more bids this year.
Fourth, inflation will also put more pressure on CPOs to manage their departments strictly within budget.
Fifth is that procurement and sourcing teams will award more bids to smart suppliers who justify their higher prices by differentiating with greater customization and value-added services.
Sixth, as a result of certain goods and services experiencing sharp increases in price, sourcing teams will have to act with greater vigilance.
Seventh, the manipulation of some supply markets will be uncovered in the next year 2023.
Most Chief Product Officers faced great pressure to achieve their performance targets, particularly in the second half of the year 2022. This pressure, however, must not deter them from ensuring that they build and maintain an active talent pipeline and keep a steady focus on digital transformation. 2023 will be a very interesting, challenging, and rewarding year to work in procurement and most CPOs would not have it any other way.
* Leads Resources can assist you in developing a program to help you re-evaluate your vendor relationships. Contact our team for more information.