4 trends for the procurement area in 2020

We are only in the third month of 2020 and many events have already impacted the B2B procurement area: the rising dollar, export problems and materialization of the coronavirus pandemic, along so many other things that are happening behind the political and economic scenes. In fact, the year has just begun, bringing a host of challenges already.

But even with all such disturbance, organizations must restructure and update themselves to keep business running, achieve their goals and satisfy the customers.

In this post, we will then talk about trends in the B2B procurement area and practices that can help buyers during this year.

Are you ready? So keep on reading!

1. Investments in Machine Learning

Businesses are investing in Machine Learning to achieve more productivity, financial gain and assertive results. This market trend will probably increase even more in the next few years. By 2021, investments in Artificial Intelligence and Machine Learning are expected to grow 46.2% annually, totaling US$ 52 billion – according to a recent survey by IDC, a consultancy firm established in São Paulo.

As to the procurement sector, growth means more room to implement tools and solutions that can optimize the time spent on manual processes. Additionally, it creates a strategic culture of transaction housekeeping, supplier management, risk management and data analysis particularly.

The focus of Machine Learning is to achieve more correct profiles of your customers and even predict behaviors for an assertive decision-making process.

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2. Suppliers as partners

The way in which buyers relate to their suppliers has changed over the years. Due to market challenges and fierce competition, organizations now need that their salespeople provide them with set deadlines and quantities.

Therefore, more than ever, relationships are now working as an exchange process. The buyer partners with suppliers, in order to favor them during agreement relations. In this way, salespeople are happy to do business and help organizations achieve their deadline, price and quality goals.

The supplier then starts to act as a partner of the company, and together they can create and develop scenarios that are satisfactory to both sides. In addition to decreasing risks of the supply and acquisition chains, this relationship fosters innovation in businesses.

3. Digitization of procurement processes

According to a report called “World-class procurement: redefining performance in a digital era” by the Hackett Group – an international consultancy firm and leader in benchmarking and best practices for global companies –, procurement areas that use 4.0 technologies will be able to achieve cost savings up to 17%. However, when they truly embrace digital transformation – that is, when they change their mindset and not only use a given technology, in an occasional way – they will be able to reduce expenses by 45% or more.

That report addresses also the importance of freeing professionals from routine and repetitive activities, giving them more time and conditions to be strategic. By way of digital transformation, it’s possible to implement robotic solutions, which will help to decrease process errors and, of course, achieve higher profit.

Once the behavior has changed, it will be up to organizations to decide how to use the cost savings generated by digitization. It will be perhaps a great opportunity to invest in their employees, qualifying them for more strategic and important tasks for the company’s business.

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4. Risk management to avoid problems in the supply chain

No business is untouchable. Threats are inherent to everyone, and when we talk about risks, there are the ones we can predict and avoid, and those that just happen and force us to act quickly, in order to minimize the impacts on businesses and society as a whole. A contingency plan is then required, to be put in practice whenever something unexpected happens.

In the case of coronavirus, for instance, we have seen that the risk wasn’t even mapped. In this scenario, the 5 steps of risk management must be reviewed, looking not only at the primary risk of people contamination, but also at the secondary risks in the supply chain and world economy.

Response planning must include alternative supply sources and inventory levels, considering also a possible demand drop for companies’ products or services.

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What other trends would you include in this list? Tell us in the comment field!

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