Four key trends that will have a major influence on procurement decision-making in 2021.
A major increase in business risks, including supply chain disruption to cybersecurity to regulatory change to the economic implications of prolonged pandemic-related restrictions. All parts of the organization, especially procurement, will feel the effects of this high-risk business environment and need to factor this into their 2021 transformation agenda.
Shift to virtual work will require significant re-skilling and innovation of management techniques. It will also allow companies will tap into an increasingly global talent pool. Performance management will evolve from measuring activity- and task-based productivity to business outcomes based on teamwork and collaboration. Further, diversity and inclusion have become a top priority.
Given the economic recovery conditions, cost-cutting remains the key priority. The combination of significant 2020 cost cuts and increased workloads is straining many procurement organizations, and this will continue into 2021.
The level of “digital maturity” a company possessed was a major factor in their ability to respond to the crisis, creating competitive differentiation. Most companies have learned these lessons and plan to accelerate their digital transformation. Procurement must support the enterprise’s digital agenda while shifting its own digital transformation into overdrive.
Companies that attained greater success overall in implementing process automation, data and analytics, and cutting-edge technologies, we’re able to address top objectives far better than their peers.
For example, 44% of technology leaders said they met their functional objectives in 2020, versus just 24% of other companies. New technologies provide the opportunity for procurement to become much more data and insight-driven.