ProcureTech hosted its 2023 Predictions & Purpose: a webinar revealing the way ahead for digital procurement as provided by the 2022 ProcureTech100 pioneers.
Joined by an expert panel of leading corporates, they discussed the 70+ predictions from the pioneers.
“Supply Chain visibility should be easy – that’s where digital unlocks it and gives us superpowers.”
Sam de Frates, Global VP – Commercial Performance, Capabilities & Services, Mars
The webinar elicited engaging conversations between the panel, each sharing their own experiences, successes and struggles of using and looking for the right digital solutions.
The 2022 ProcureTech100’s predictions were separated into 5 different categories:
Digitalisation & Intelligence closely looks at how companies will need to focus on new solutions and practices in 2023. We asked them:
- What is going to share digital procurement in 2023 and beyond, and why?
- What is going to be most important for your category over the next few years, and why?
Digitalisation
We’ll see a greater priority to implement automation driven by the need to increase visibility, mitigate risk and optimize costs.
With the current state of economic uncertainty and inflation, procurement professionals will be challenged to do “more with less” and optimize costs. Furthermore, according to Gartner, suppliers are imposing contract renewal price increases ranging from 10% to 30% or more. To solve these challenges and optimize costs, a priority of procurement teams in 2023 and beyond will be to implement automation, enabling them to flag contract expiration dates and measure suppliers’ compliance to contract terms. Additionally, automation will be sought out for its ability to optimize return on investments by reducing the costs of multi-supplier maintenance and further improving relationships with individual suppliers.
Focusing on CLM technology with AI capabilities will be a key focus for us over the next few years.
With the economic uncertainty, it’s important for procurement teams to have a better understanding of how they can drive better efficiency at the contract level. CLM solutions enable procurement teams to enhance their sourcing and negotiation strategies, while also enabling them to proactively manage the full procurement and contract management lifecycle. Without a CLM solution, teams face the risk of supply chain continuity challenges, inconsistency across segments, limited reporting, and potential legal risks.
Sarvarth Misra, CEO, ContractPodAi
Solutions proliferation is unstoppable, and Best of Breed selection is the new playfield of consulting firms, especially the big 5.
The Platformization of the leading S2P players has not been as successful as expected and cannot be the answer for the thousands of solutions around searching for Clients.
Connectivity will be crucial because, being at the center of Kearney’s Spider Chart, we must be reachable and easily connectable with anybody.
Adriano Garibotto, Chief Sales & Marketing Officer, and Co-founder, Creactives SpA
Companies are cutting back on discretionary spend in 2023 due to forecasted market conditions, but mission-critical technology will not fall prey to budget tightening.
The investments in supply chain and procurement technology will be led by executives demanding visibility into their direct and indirect supply network to drive savings, mitigate supplier risk and comply with new regulatory requirements.
In 2021, the Economist Intelligence Unit reported that 45% of companies had their supply chain “significantly” disrupted by COVID-19, but it was only one of several challenges, including cyberattacks (36%), commodity pricing fluctuations (33%), and diverging regulations (32%). In 2023, most countries have relaxed or eliminated their pandemic related restrictions reducing the likelihood that the virus will be the source of supply-chain disruption. However, other, more persistent, factors have become more pronounced. With 2/3 of the market relying on outsourced product manufacturing and over 90% of products relying on at least one supplier, most companies are grappling with the effects of geopolitical strife, climate disasters, financial volatility, the high cost of capital putting suppliers at risk and rampant cyber supply chain threats. However, the investment will be a means to an end. Once procurement leaders know how to spot the resilient supplier options, they can turn that knowledge into a more frictionless market landscape and procurement strategy.
The most important change for our category, supply chain and third-party management, will be the development of quantifiable risk appetite and management frameworks that have been validated by regulators and leaders in the procurement space.
The operational and reputational risk side of procurement is still undefined and every organization is assessing and defining risk differently. Establishing processes, guidelines and model documents will be an important step towards unifying the requirements of business tools and the functional roles in organizations.
Brandon Daniels, Founder & CEO, Exiger
Enterprises will significantly accelerate their decision making and adoption of best-in-breed tech.
Kevin Frechette, CEO & Co-founder, Fairmarkit
Increasing compliance and information security requirements place a greater responsibility on procurement, as one of the first points of engagement with prospective vendors, to make sure that due diligence and requisite data capture is carried out at the earliest opportunity.
Achieving a state of ‘audit-readiness’ starts with an exemplary procurement process. And digital procurement is really the only way to make this possible. This includes digital intake, automated checks for financial, cyber-security and ESG status and ongoing vendor management.
The economic environment will also have a big influence on digital procurement and how it can support a cost-conscious approach to business growth.
Patrick O’Connor, Founder & CEO, Gatekeeper
Automation of processes will be key here. I predict Autonomous Sourcing will become a more mainstream approach for sourcing functions.
Almost 9 in 10 (89%) of respondents to our new Voices of Sourcing survey acknowledge that automation will reduce time spent on manual tasks (in many cases, by up to 90%) ease the burden on teams and drive better outcomes.
Alan Holland, Founder & CEO, Keelvar
The pandemic drove widespread technological advancement and uptake with many solutions now coming to market at scale.
I think this year we will see a great deal of merging of solutions as some companies struggle to stand on their own two feet as a result of a more challenging fund raising landscape.
Many innovative new solutions which have been operating in stealth or building at scale will likely start to emerge/monetising driving competition and innovation in the landscape.
Both things can only further drive innovation in the market which for me is a good thing.
The space we operate in is ripe for a significant land grab so I feel distribution will be key. Getting as many eyes on the right solution as possible to drive sector wide change of users both sides of the procurement process which is largely outdated, particularly in the public sector.
Tim Ward, Founder & CEO, Opportuni
CFOs will invest in the digitization of procurement and finance processes. There are manual workflows that cost companies operational cost and also impact business results directly. To get better control, more investment will go in.
Lalitha Rajagopalan and Sudhir Bhojwani, Co-founders, ORO
Companies will try to consolidate the stack of tools they are using for procurement/accounts payable.
Market conditions change quickly, and during a time when it is difficult to grow sales, it makes sense for businesses to audit their existing technical stack and look for ways to reduce costs/improve efficiency.
SMBs will look for digital procurement solutions even more than in 2022.
We are seeing a huge potential for growth here, as when the economy is going into recession, it makes much more sense to check your expenses and make sure you are efficient enough to get through it. More than 90% of SMBs manage procurement processes without professional tools, just using email, Slack for approval, and Google Docs/Excel to manage budgets.
2023 will be a year of market consolidation for procurement solution providers.
We can see a decline in VC funding, especially for overvalued companies. At the start of 2022, things were still part of the 2021 boom. Unicorns were minted daily and weekly, and valuations were sky-high. By late Q1, it was over. And things just got tougher and tougher as the year went on. Growth rounds essentially stopped.
Andrew Zhyvolovych, CEO, Precoro
Market and Tech consolidation will continue- companies will struggle to get value out of best of breed solutions because of the disconnected exploding solution landscape.
A new trend will emerge: “Suitify” – Amalgamating Best of Breed solutions into a suite like experience. This will happen via acquisitions or via technology that connects solutions and creates context to maximize investments in these best of breed solutions
Gregor Stühler, CEO & Co-founder, Scoutbee
Composable procurement technologies will continue to gain increasing popularity with procurement teams looking to derive deeper and more holistic views of organizational spend – and use that information (and technology) to expand procurement’s spend influence to include more indirect (tail) spend categories.
Modular, plug-and-play spend analytics and tail spend management solutions can easily integrate into existing procurement applications to provide deeper, and more comprehensive views of organizational spend, and better overall control of indirect spend categories and spot buy purchasing. With user-friendly, self-service buying channels, e-catalogs and buy desks, Procurement will have the tools and capabilities in-house to embark on very intentional strategies to chip away at their organizations’ unmanaged purchases, ultimately converting more tail spend to influenced spend, increasing overall spend under management.
Procurement Teams Turn to Composable, Purpose-Built Solutions and Strategic Resourcing to Achieve Desired Outcomes and ROI
Amidst tough market environments, 61% of procurement professionals keep focusing on cost reduction (37%) and strategic sourcing (24%) to offset negative impact. Composable or modular-based procurement solutions help to reduce operational costs by letting organizations choose only the features they need without significant ongoing resource investment for management and upkeep. Suite solutions are highly complex, requiring significant resources to manage. By contrast, composable solutions offer an intuitive and user-friendly experience which helps to ensure product adoption and ROI (Source: PwC Global Digital Procurement Survey, 4th edition).
David Bush, CEO, Simfoni
Those maritime professionals (or others for that matter) that rely too much on AI or Big Data to tell them what the future will look like – without understanding the basics of how it works and how you should make use of such information for better decision making. Taking it all in is tempting, but the biggest mistake of all. Use tech carefully for the right purposes and beat the opposition – there are no easy shortcuts.
Secondly, the use of robotics for maritime purposes: cargo hold cleaning, hull cleaning (under water and above). The pandemic proved to be a catalyst for technology – 2023 is likely to give it a full-blown breakthrough.
In 2023, procurement and B2B purchasing technology vendors will need to prioritize no-code functionality to keep pace with the evolving purchasing landscape and economic environment.
As the pressure on procurement teams increases to scrutinize spend and ensure every dollar of spend delivers maximum value, businesses will need flexible solutions that can easily adapt to their unique and evolving business needs. Furthermore, the teams implementing procurement technology – often finance, accounting or procurement teams – are often not technical professionals, which means any SaaS solution they choose to implement should require as little coding knowledge as possible, or face significant IT backlog.
There will be an acceleration of emerging B2B marketplaces for software/apps will dramatically reduce procurement costs, increase efficiency and allow companies to expand into new markets.
A majority of procurement professionals (54%) say they want to be purchasing primarily online by 2024, either through a vendor’s own site or a digital marketplace (according to a survey by SAP).
Ritish Reddy, Co-founder, Zluri
Intelligence
The Digitization of Decision Making
As procurement operations take advantage of new artificial intelligence (AI) and machine learning (ML) technologies, and as enterprises determine the best balance between teams and automation, we will see intelligent, automated decision making emerge as a critical capability – alongside the need for a complete, digital memory of decisions across end-to-end procurement processes.
Starting now and continuing over the next two to five years, procurement teams will move from an operational environment focused on reactive processes and transactional recording systems to one where they have an “always-on” memory of the decisions made, and why – along with the options or recommendations that were available. This will provide a digital record that informs future strategy, which will be especially critical as businesses justify the social and environmental impacts of procurement decisions.
PwC’s 2022 Digital Procurement Survey revealed that 82% of companies with a high level of process digitalization were able to gain value from their procurement data, yet 34% reported a lack of expertise in leveraging this data. AI and ML technologies have reached a level of sophistication to bridge this expertise gap, identifying patterns in data with a level of accuracy, scale, and speed that people can’t achieve. This will drive the ability to digitize procurement decisions – including capturing the context, rationale, and outcomes of those decisions for future analysis.
Digitized decision making will transform the procurement function in 2023 and beyond by enabling teams to be more strategic and collaborative, while helping them protect their companies from risk and unnecessary costs.
Jennifer Chaplain, Principal Solution Engineer, Aera Technology
Technology that simplifies the way data is captured, processed and put into use moving from lofty concepts towards delivering actionable insights with an end-to-end approach and that can quickly prove its worth in terms of driving both top-line and stakeholder value.
Procurement & Sourcing professionals will embrace the fact that they hold the currency of impact and the responsibility that comes with it.
This will have huge implications for the way technology can be used to leverage this responsibility in 2023 and beyond. 2023 is also the year when Sustainability progress ( – be it reducing carbon footprint or increasing diversity) will become an innate part of any Buyer – Supplier Relationship & Supplier Performance Management. Supply Chain sustainability will have to be managed rather than being tick in a risk and compliance box.
Malin Schmidt, Founder & CEO, Kodiak Hub
Harnessing cutting-edge artificial intelligence (AI) to automate the identification, prioritization, and sharing of risk information across departments within businesses—at scale and in real-time—will create competitive advantage.
New ESG compliance imperatives for monitoring ESG metrics, including supplier sustainability metrics, product carbon footprints (Scope 3) and human rights issues (due to emerging regulations, such as the German Supply Chain Law, EU Due Diligence/Corporate Accountability Directive and Uyghur Law), have become and will continue to be important.
Heiko Schwarz, Global Supply Chain Risk Advisor at Sphera and former CEO and founder of riskmethods (acquired by Sphera in October 2022)
With the economy remaining uncertain next year, CISOs will feel increased stress from their board and senior management to justify the spend on their cyber tech stack.
To ensure their security program is well-financed, CISOs will need to set specific management-level cyber metrics that can help them properly articulate whether the cybersecurity products and tools they have purchased provide a sound return on investment.
Aleksandr Yampolskiy, CEO & Co-founder, SecurityScorecard
We see even more use of detailed data to provide actionable insights and support strategic decisions. Top performers in supplier diversity are not only finding deeper insights and opportunities in data, they’re also finding ways to manage and analyze that data more efficiently, freeing up staff to focus on more strategy and business opportunities.
Procurement teams will require a sophisticated data set to effectively manage supplier contracts
The macroeconomic environment has put financial pressure on procurement teams to cut cost and spend, and consolidate suppliers where possible. This is impossible to do without the right data that’s not only visible to consume, but also easily actionable. Companies cannot afford to throw heads at the problem due to hiring constraints, so they will turn to technology to solve for it.
Justin Hiatt, Chief Growth Officer, Terzo
The way that freight is bought and sold, by global shippers, freight forwarders and carriers. Constantly increasing transparency, lifts data-driven decision making based on actionable insights to the next level in 2023. A breakthrough, as all logistics professionals seek to gain a better understanding of the causality of the global supply chain events – and how they impact contract rates and spot market prices too.
Look out for the full predictions from the 2022 ProcureTech100 pioneers!
Want to make the predictions a reality? Contact ProcureTech to find out how:
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