Global fast-food chain saves 3,2M€ every year by using AI procurement software. The company managed to source alternative suppliers and mitigate their dependency to avoid forecasted supply chain disruptions. AI is just one of the market trends in procurement shaping businesses. Keep reading to learn about the 5 biggest trends of procurement and how they impact your business today and tomorrow.
Trustpair secures your entire P2P process thanks to automated and ongoing account validation. For a streamlined experience, we integrate directly with the main procurement portals.
Artificial Intelligence
The first procurement trend impacts all departments, organizations, and industries: AI. This technology has disrupted the way procurement leaders work, make decisions, and operate daily.
When it comes to procurement supply chains, AI and machine learning have been useful to make sense of huge quantities of untapped data.
McKinsey states that companies have moved from using less than 20% of their available procurement data, to automatically generating data analytics that assist with better decision-making at every step of the sourcing process. According to McKinsey’s procurement trends report, companies used less than 20% of their procurement data. They’ve now moved on to using AI to automatically generate data analytics, leading to better decision-making at every step of the sourcing process.
AI can give insights and create forecasts based on real-time data. Management and procurement teams can therefore track KPIs along their global supply chains. It has made tracking vendor’s reliability, cost, and delivery times easier than ever.
For example, companies can use AI tools to review their Purchase Requests based on their historical data and set rules for their automated validation. Instead of having to handle their PRs manually, procurement teams can use this time on more valuable tasks. Data-driven procurement leads to increased transparency, which helps with sourcing (and keeping) the best suppliers. Procurement departments make cost savings decisions, reducing maverick spending.
Digital procurement
One of the procurement trends we don’t have to introduce: digital transformation! Digital transformation procurement is here to stay and will keep evolving. New solutions emerge regularly to help meet the needs of procurement teams — from sourcing to invoicing and securing payments.
Digitalizing procurement processes contributes to streamlining workflows and enhancing collaboration, improving supply chain management. Software solutions have helped companies shift from department-focused to project-based work involving cross-department teams. They broke data silos, allowing a flow of real-time information to be accessible to all relevant stakeholders. Procurement and supply chain management platforms centralize all necessary data into one central location.
Teams from Finances, Legal, Procurement as well as Management can access what they need without having to chase the most updated spreadsheet. Procurement transformation also brings suppliers and clients closer together. It fosters two-way communication so everyone will know what to expect for delivery, contract, payment, etc., leading to better supply chain management.
Trustpair is an anti-fraud software that secures your procure-to-pay process. Our solution uses AI to detect any fraud attempts, so you can be sure you are paying your intended recipient — not someone impersonating your suppliers.
Sustainability
Procurement professionals also have to integrate sustainability and environmental social governance criteria in their supply chain management.
You may remember the Rana Plaza disaster in Bangladesh in 2013. The eight-stories building that housed garment factories collapsed, killing more than a thousand people. The Rana Plaza factories provided products to Western clothing brands, which were spotlighted for not enforcing safety regulations for their suppliers. This reputational loss directly impacted their sales, and (fortunately) led to enforcing better safety regulations and labor laws in Bangladesh.
In the current context, supply chain leaders need to factor in sustainable procurement practices in their supply chains. This applies to the whole supply chain management, from sourcing to invoicing:
- Sustainability ethical sourcing has become a priority for companies who want to comply with regulations, trends in procurement, and reduce their carbon footprint.
- Streamlining and digitalizing processes reduce the energy (and paper) needed for teams to carry out their work.
Learn more about procurement trends in our white paper crafted in collaboration with Deloitte.
Supply chain resilience
Companies today are evolving in increasingly uncertain markets. You have to navigate:
- Geopolitical unrest,
- Health crisis,
- Environmental concerns,
- Change in spending habits in B2C and B2B markets.
As a result, procurement professionals will need to develop more resiliency. The goal of this procurement trend is to be able to react quickly in case of crisis.
The Red Sea conflict has meant that ships are now avoiding the Suez Canal, which normally makes up 12% of the global sea traffic. Not being able to use this route has negatively impacted oil companies like BP. It is up to procurement leaders to anticipate disruptions that could impact their supply chain.
This requires procurement leaders to identify the key risks in their supply chains and develop contingency plans. This ensures your company doesn’t risk interrupting its production and can stay ahead of the curve.
Shifting from operational to strategic procurement is one of the top procurement trends. Procurement teams play a big role in shaping their company’s long-term vision alongside management, and this will increase in the future. Procurement leaders are gaining new roles and responsibilities and are more involved in risk management.
Concretely, it translates into:
- Increasing your supply chain visibility.
- Diversifying your supplier base,
- Being proactive in your risk management.
More than risk management, supplier resiliency is about supplier relationship management. It’s about making your vendors your partners in achieving your business vision.
The rise of fraud
According to our latest survey, 96% of US businesses were targeted by at least one fraud attempt in 2023. Third-party fraud is a threat that all organizations face.
In procurement, this translates into:
- Invoice fraud: where fake invoices are submitted (and paid) by your company.
- Vendor fraud: where criminals impersonate your suppliers and get you to send them payments
- Internal fraud: where employees leverage their insider knowledge to commit one fraud.
All of these negatively impact your cash flow and your supplier relationship management.
With technology, fraud schemes have become more elaborate. Criminals leverage information found on the web, AI, and social engineering techniques to steal data and/or money from your company. That’s the dark side of the technology procurement trends.
For example, we see companies adopting instant payment methods for their suppliers without setting up proper verification methods. To leverage technology and be safe while doing it, you need anti-fraud software.
A solution like Trustpair helps you streamline and secure your procure-to-pay process. Our software runs automatic and ongoing account validation checks, with real-time data, internationally. Our AI will detect suspicious activity and block any transaction before it is sent.
With Trustpair, you will always know who you’re paying. Automation means our checks are more thorough and efficient, replacing the need to manually check your vendors’ credentials every time you need to send them a payment (like you should to be adequately protected against fraud)
This frees time for your employees, who can dedicate their energy to focusing on strategic decision-making, and implement these procurement trends.
Key Takeaways:
- Procurement has moved from operational to strategic.
- Leveraging AI, using technology, and building resiliency are trends shaping procurement and the future of businesses.
- It’s essential to adopt anti-fraud software to secure your procurement process.
- Trustpair uses ongoing validation, so you always know who you’re paying.
