2024 Key Events Notes and Actions to Take (Part 2):
Previously, I spoke about
- Commodity Price Slowdowns
- Consulting World Shakeup
- Election Year of World
- Slowdown to GenAI API startups
- Accelerated Supplier Developments
- USD Depreciation
Now, I want to focus on Digital Procurement:
- Slowdown in Meaningless Digital Procurement Spending:
Firms will delay "good to have" digital procurement tools. Yes, Proof of contracts will increase, but actual contract conversions will decline. Unless the tool enables cost savings directly (hard cash savings), the budget will be diverted to "Must Have" tools instead of "Good to Have". Simplification of Procurement Stacks will be prioritised.
- Lesser reliance on Magic Quadrants:
Unfortunately, such quadrants are biased towards favouring old legacy players with outdated technology stacks (and ideas), archaic, slow and meaningless corporate setups and painfully slow product innovation. Personally, I feel they add more confusion than simplifying.
Their mainstream quadrants of eSourcing (source to pay), spend analysis, and other must-have tools in digital procurement have remained the same. It's dated and disregards the incredible work being done by a lot of quality new players and startups! Ask the community.
- Dead end for Sustainability Platforms:
ESG is great, but do not fall for the sham of many ESG platforms where you can buy good credits. There is zero value behind such business models. More so, ESG reporting platforms are glorified data entry forms. Highly overhyped. DIY project of a maximum of one week.
- More Focus on Phase 2 of Procurement Digitization: i.e Data, Spend Analysis:
Whether with a tool or without, most Procurement orgs are now realizing the Data problem. Everyone has Data, and the data becomes even more complex with all digital Procurement stacks. So, the use cases and output/success-driven payment milestones will become mainstream.
The digital Procurement suite providers who sell their tools upon promises of efficiency and cost savings will have to become accountable for delivering those savings. Although not entirely, I do expect at least one payment milestone linked to cost savings delivered output.
- Negotiation:
2024 is going to be the year of Negotiations. Read about the economic indicators (in my last post) and you will realize it is the time to exercise your procurement muscle. Unfortunately ,Negotiation skills among middle management category managers are often neglected, and most savings were largely cost avoidances driven by high quotes in the initial rounds. The Data-driven Negotiation upskill will become popular!
- Spend Analysis:
More than data scientists, machine learning and AI in Procurement, I foresee 10x demand in Procurement Spend Analyst positions not only in Procurement functions but also in Digital Tool Providers. People know how to use the tools but dont know how to find the use cases to achieve savings. This will be a huge differentiator!
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