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.
“Risk: when the tide goes out, you see the old pipes and rusty trollies. Then you can see who had your back; who was there to help you out? Or who was just there to get their invoice?”
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:
Supplier Management 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?
Building better relationships with suppliers was on the agenda in 2020, but the pandemic meant those initiatives were deprioritized.
With renewed enthusiasm, procurement and supply chain teams will partner with suppliers and spend more time building an integrated partnership so when/if there are struggles in the future, their robust partnership will help them ride the storm together.
Cybersecurity concerns continue to build and more examples of high profile cases keep the CISO awake at night who, in turn, has the CSCO and CPO on alert.
Cybersecurity needs to be better understood by procurement and supply chain executives so they are not stifled in taking action
Multi-tier supply chains have been established as a hotbed of both risk and opportunity in the past 12 months.
In 2022, McKinsey surveyed supply chain teams and found that the level of visibility into Tier 2 suppliers had doubled from 20% in 2021 to 40%. Tier 3 visibility had also experienced a 4x increase from less than 3% to over 11%. This trend will continue in 2023 and beyond in pursuit of completeness.
Ilya Levtov, Founder & CEO, and Seb Butt, Head of Global Business Development & GM, Craft
Trading partners will need to collaborate transparently more closely than ever.
Market forces such as consolidation, rising customer expectations, and the direct-to-consumer motion are dramatically reshaping trading behaviors between manufacturers, distributors, and retailers, putting a strain on their relationships. To combat this, we’ll need to change behavior. No longer is it okay to operate in data siloes, where trading partners are independent of one another. Jay McBain of Canalys cites 96% of Microsoft’s sales being partner assisted, and I think this is going to be the new norm for most companies. One of our recent studies found that for 44% of distributors, only purchasing and senior management are familiar with the details of the trading programs they have in place with their supplier partners. Stronger, more transparent collaboration will close the gap and facilitate more opportunities across the supply chain.
Companies that manage their rebates on spreadsheets quickly find they spend all of their time entering data and making manual calculations, rather than working on building constructive relationships with their trading partners.
Throw in an unpredictable and volatile supply chain into the mix, the complexity heightens.
Rebates are in fact the healthiest incentive available to every member of the supply chain. When supply chain partners are aligned and coordinated as seamless extensions of each other to achieve the best outcomes, we’ll see our supply chain’s health improve and transform into a thriving partner ecosystem.
That’s why rebates shouldn’t be seen as a “nice to have”, instead rebates should become the bedrock on which loyal, trusting relationships are formed, so they can align partners around common goals and, when managed properly, can become an important driver of revenue and margin in their own right.
Andrew Butt, Founder & CEO, Enable
More executives will start asking procurement what they’re doing to improve end user transparency and employee NPS.
Kevin Frechette, CEO & Co-founder, Fairmarkit
The new macroeconomic uncertainty will change perspectives on what capabilities make the optimum balance.
I expect companies to strike a new balance between long term efficiency and the agility they need to respond to the next shock – whatever it might be.
David Doyle, Co-founder & CEO, Forestreet
Creating a joined-up approach for managing vendors and their associated contracts.
The two can’t be managed in isolation, with different teams taking individual responsibility. The future of the category depends on building one place to manage both the vendor relationships and all the related documentation, including contracts.
Patrick O’Connor, Founder & CEO, Gatekeeper
The adoption of a “single sign on” procure-tech approach amongst enterprises with complex supply chains will continue to grow.
HICX’s recent Voice of the Supplier survey, revealed that 61% of suppliers serving multi-billion-dollar manufacturers, find it difficult to do their best work for their most important customer. Suppliers must login to an average of 8.4 systems, and over a third have to access at least 10 different systems to get the job done. As enterprises continue to build resilience in 2023, more and more leaders will start to rethink the digital experience they offer to suppliers.
More enterprises will strive to become customer-of-choice. In HICX’s recent Voice of the Supplier survey, almost a third of suppliers serving some of the world’s largest brands don’t think of their most important customer as a “customer-of-choice”. Those who do, are 20% more likely to prioritise their favourite customer’s orders in times of demand, and 24% more likely to go the extra mile. With supply chain uncertainty continuing into the new year, customer-of-choice is a status worth having. We expect to see more enterprises leaning into this opportunity in 2023, by challenging the way in which they view – and then engage – all suppliers.
Costas Xyloyiannis, CEO & Co-founder, HICX
Supplier monitoring tools will mature from high-profile pilot projects into core procurement processes.
As demand starts to level off next year, supply will gradually get back into balance, and a lot of the panic from 2020-2022 will subside. However, the scar tissue (and budgets) that procurement professionals took on will be used to create more transparency around supply chains.
Transparency and decarbonization tools will be a key category in procurement as companies that have already made commitments will look to these teams to achieve these goals and leverage new opportunities that are created as a consequence of the global supply shift that is underway.
Neil D’Souza, Founder, Makersite
Supply chain disruption will continue to be the focus. This will require companies to build supplier relationship management programs.
Lalitha Rajagopalan and Sudhir Bhojwani, Co-founders, ORO
CISOs will be required to connect cyber risk to the broader business to keep their jobs
It’s no secret the economic downturn has meant significant budget cuts for many companies. As cyber threats escalate, cybersecurity investments are either staying put or increasing in 2023—that is, only if security teams can rightly prove the value of their cybersecurity programs to senior leadership and the board. However, the majority of CISOs are struggling to effectively express the business impact of cyber risks to their board. In 2023, this ability will go from a nice-to-have to a must-have, and we will see an influx of CISOs losing their jobs if they can’t adapt.
There will be a stronger government push toward security by default
According to Gartner, digital immune systems that deliver resilience and mitigate security and operational risks will be a key strategic technology trend in 2023. We’ve already seen considerable mentions of security by default practices in the past several months within CISA’s Strategic Plan for 2023 – 2025 and the White House’s Guidance on enhancing software supply chain security. In 2023, we’re going to see increased guidance and legislation surrounding secure development practices that include specific metrics and timelines for federal agencies. As technology companies seek government contracts in the coming year, it will be increasingly crucial that they collaborate with the public sector and look at these government regulations as a baseline to build foundationally secure software.
Aleksandr Yampolskiy, Chief Executive Officer, SecurityScorecard
An enterprise will cut ties with a brand-name business partner due to poor cyber hygiene
With the uptick in massive third-party data breaches, conversations around business ecosystem risk have escalated to the senior leadership level. Organizations have also begun taking the security posture of vendors into account before doing business with them. Gartner forecasts that the majority of enterprises will use cybersecurity risk as a core determinant in conducting business engagements and third-party transactions by 2025.
Network defenses such as firewalls and identity management solutions are still essential to maintaining a strong cybersecurity posture. However, in 2023 organizations will need to place equal investment in threat intelligence and monitoring tools that can illuminate hidden cyber risks across their extended business ecosystem. With increased visibility into third- and fourth-party risk, more enterprises are likely to withdraw from partnerships that pose a threat to their business.
Sam Kassoumeh, COO and Co-Founder, SecurityScorecard
A successful kinetic cyberattack against Ukraine is highly likely
Many experts were surprised at the evident ineffectiveness of Russian cyber espionage during the Ukraine war. However, Russia’s unsuccessful attempts thus far are not to say we won’t see one occur in 2023. Russian cyberattacks have succeeded in shutting down Ukraine’s power grid in the past and Ukraine has already reported numerous instances of Russian hacker attempts to cut off its electricity this year. In 2023, we can expect a higher level of sophistication coming from Russian hackers.
There will be a reckoning among IoT manufacturers as customers demand the strengthening of product security
Connected devices have been historically known for their poor security posture. From vulnerabilities within baby monitors to critical bugs in home security systems, it’s just a matter of time before a malicious actor takes full control of a user’s smart home device.
To protect the privacy and security of consumers and their homes, the U.S. government has confirmed plans for a cyber labeling program, set to launch in the spring of 2023. The initiative will help consumers make informed cybersecurity decisions about their IoT devices with easily recognized labels. With new regulations placing increased scrutiny on IoT device manufacturers in 2023, they will be compelled to significantly enhance security across their products.
Ryan Slaney, Threat Researcher, SecurityScorecard
Manufacturers will focus on supplier collaboration more than ever before. Collaboration prevents late supplier deliveries by allowing buyers to have visibility and react quickly.
Preventing late part deliveries. As much as 70% of supply chain problems occur before parts ever ship. Late part deliveries shut down production lines and cause loss of revenue.
Tom Kieley, CEO & Co-founder, SourceDay
More companies will implement product traceability as part of building trust with a new generation of conscious consumers
EU and US laws will make end-to-end supply chain transparency part of business as usual
The widespread deployment of traceability tech to raw materials origins will help companies tackle issues with product quality and adulteration
- De-risking the supply chain to better adapt to swings in demand
- Traceability for anti-forced labor enforcement
- Creating an audit trail for sustainability across the end-to-end supply chain
Leo Bonanni, CEO & Founder, Sourcemap
Companies will adopt digital supply chain grievance mechanisms to meet regulators’ public and market demands for better working conditions in global value chains
Antoine Heuty, Founder & CEO, Ulula
Procurement teams are going to have to move to more radical collaboration as we progress through this decade.
Deploying change isn’t easy; the best way is to make sure you have not only good relationships with your suppliers, but active, collaborative relationships.
The days where one-way Supplier Relationship Management strategies could be the extent of your interaction with the rest of your value chain are over.
True Supplier Collaboration & Innovation is the new norm if companies want to ensure sustainability, resilience, and growth.
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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