6 Key Procurement Trends for 2024

Download this article in PDF format.

The traditional role of procurement as a “cost-saving department” has transformed dramatically in recent years. In contemporary times, procurement is the “strategic partner” that drives value enhancement throughout the entire supply chain. “This ongoing transformation has been gaining momentum, permeating various industries and organizations worldwide,” Capgemini points out in Intelligent Procurement Study 2024.

 The report focuses on four key trends that are shaping the current landscape of procurement practices: hot trends, client priorities, technologies and the startup landscape. “These elements encapsulate the contemporary challenges and opportunities faced by procurement professionals,” the company says, “in their pursuit of delivering value and maintaining competitiveness within an increasingly complex global marketplace.”

Here are six of the key trends, changes and challenges that Capgemini says procurement teams are focused on this year, and some strategies for navigating these complexities:

1. Inflation. Global Inflation has become a key concern for CPOs, according to Capgemini, which compares this challenge to a “storm at sea,” with governments and businesses taking on the roles of ship captains, diligently working to navigate through the challenges it presents. “Procurement functions have a tremendous opportunity to mitigate these risks and help create a more resilient supply chain by equipping buyers with the right knowledge, skills, and tools to do so,” the company says. “Creating an inflation risk matrix will identify priority categories to focus on, and data needs to be leveraged, to drive productive discussion with internal and external stakeholders.”
   
   
2. Procurement-driven innovation. Procurement can play a key role in driving innovation within a company by owning the relationship with the supply base; by identifying, and sourcing, new and innovative products and services; and by promoting a culture of continuous improvement within the organization. “To become strategic and accelerate inventive change, procurement departments must focus on innovation in procurement strategy,” Capgemini recommends. “Supplier encouragement is key to fostering an environment of innovation and can be achieved by encouraging collaboration between suppliers.”
   
   
3. Risk management. Globalization has undoubtedly increased the complexity of the supply chain. Through continuous proactive risk management, Capgemini says companies can develop mitigation strategies for external and internal risks, implement best practices in governance and establish alert mechanisms to enable businesses to manage those risks effectively.
   
   
4. Increased focus on sustainability. By incorporating sustainability into their procurement decisions, organizations can reduce their environmental impact. This also requires reskilling the workforce; Capgemini’s survey respondents say that the skills required in the future include awareness about global supply chain changes, digitalization, relationship building and commercial skills.
   
   
5. Creating a digital culture in corporate procurement. This will require a multipronged approach that involves technology, processes and people. “Ensuring sufficient focus on process improvement and people can lead to efficient implementation of key technology,” Capgemini points out in its report. “Any technology will require good data to maximize its potential, and data management takes effort, but investment here can provide quick returns. Improved data quality translates into improved data visibility, which supports more informed decision-making.”
   
   
6. Procurement technologies. Technology is helping companies shift from being cost-driven enterprises over to more value-driven enterprises. Take source-to-pay technologies, for example. Capgemini says these solutions are most useful when implemented as part of wider procurement transformation programs that focus on people, processes, change management, and, most importantly, senior management support for change. “We’ve seen the common pitfalls of procurement technology implementation and the best practices on how to prevent them,” the company adds. “Learning from these can set any project up for success in delivering value back to the business.”