6 Fresh Considerations to Elevate Procurement Value in 2023
In 2023, procurement organizations will continue the push to elevate procurement. Teams will need to juggle traditional priorities such as cost optimization and risk management with emerging trends and additional considerations. To elevate procurement’s value, teams will need to possess qualities such as flexibility, agility, and resiliency. Six key considerations for procurement organizations in 2023 include:
- Flexibility and agility
- Digital transformation
- Collaboration and globalization
As we embark on a new year in 2023, procurement organizations will need to consider several key factors to ensure success. In addition to traditional priorities such as cost optimization, risk management, compliance, and supplier relationship management, procurement organizations must juggle more balls than ever. These additional considerations must be accounted for during planning and must be refined and calibrated through execution.
The need to effectively manage priorities will be of critical importance. Macro forces will continue to disrupt supply chains, cause significant price swings, and reshuffle teams. Procurement must manage its traditional priorities and take action on many of the emerging trends incumbent upon them to adopt to support their organizations and maintain a competitive edge.
Procurement organizations are commonly faced with a complex landscape of priorities that are influenced by a variety of factors, such as the needs of the organization, changes in the market or industry, and external events (supply chain disruption, inflation, the job market, etc.).
Managing these priorities can be challenging, particularly with constraints on resources like time, budget, and staff which can make it difficult to focus on multiple priorities at once. Inevitably, this leads to trade-offs and tough decisions about which initiatives to prioritize and which to de-prioritize or defer.
Flexibility & Agility
To effectively navigate this dynamic landscape, procurement organizations will need to be flexible and agile. Flexibility allows for adaptation to changing circumstances, allowing adjustment to be made to priorities as needed. Agility enables swift and efficient action to be taken to address new priorities as they arise. It is only in possession of these qualities that procurement organizations can effectively prioritize and execute on initiatives that align with the needs and goals of the organization, while also being able to respond quickly to new priorities as they arise.
As technology continues to advance, many organizations are looking to digital solutions to streamline and improve their procurement processes. Procurement organizations in 2023 should consider implementing, replacing, and/or refining the processes supported by digital tools for spend analysis, sourcing, contract management, and supplier relationship management.
To stay ahead of the competition, procurement organizations will need to be proactive in identifying and sourcing new and innovative products and services. This may involve working with suppliers to develop custom solutions or identifying emerging technologies that can provide a competitive advantage.
Many organizations are prioritizing sustainable procurement, which involves considering the environmental and social impact of the goods and services they purchase. Procurement organizations in 2023 should consider choosing suppliers who have a strong sustainability record and selecting products that are made from sustainable materials or have a lower environmental impact.
Collaboration and Globalization
Procurement teams will need to work closely with internal stakeholders and navigate an increasingly globalized supply chain, which may involve working with suppliers in different countries and dealing with cultural, language, and regulatory differences. This globalization is a necessary shift for most companies and may be new or mostly unchartered territory for many procurement organizations.
To Wrap Up
2023 will undoubtedly be a challenging year for procurement organizations as they juggle traditional priorities such as cost optimization and risk management with emerging trends and additional considerations. To be successful, procurement professionals will need to possess qualities such as flexibility, agility, and resiliency to effectively prioritize and execute on initiatives that align with the needs and goals of the organization.
Digital transformation, innovation, sustainability, and globalization will also be key factors to consider as procurement organizations navigate an increasingly complex and dynamic landscape. Strong collaboration and communication skills will be crucial to successfully manage these challenges and stay ahead of the competition.
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