“At the end of the day, we’re trying to create this organization from which we have the ability to help the profession move forward with more than ever before. We think in terms of what each trend or change is going to mean to each team and what they can make of the related opportunities and challenges.” – Philip Ideson, Founder & Managing Director, Art of Procurement
With the Labor Day holiday in the U.S. providing an end-of-summer moment to pause and reflect, Kelly Barner and I took the opportunity to reflect on the year so far and what we are seeing in terms of the biggest trends and issues impacting procurement.
Of course, AI is at the top of the list, but so is the economy and the pending outcome of the presidential election in the United States. Regardless of the topic, as we’ve both observed in the hundreds of conversations we’ve had with procurement experts from around the world this year in interviews, podcast episodes, webinars, events, and projects, we keep hearing the same thing from across the procurement community – no more talk, we need action and, most of all, results.
Here are a few of the most notable trends we’re seeing now, and which we discuss in greater detail in the episode:
We’ve Come A Long Way
Even at the start of 2024, AI was on everyone’s minds, but much of the talk was centered around conjecture and ‘what ifs.”
As Kelly said, “When we started this year, AI was the topic du jour. We thought everything is going to be fixed by AI and solved by AI and done by AI, and we’re all just going to go to lunch and then come back and the AI will have done everything for us.”
While this might be true for some things, I think most of us started to sense a mismatch as the year progressed between what we thought AI was going to do, and what we are able to say with confidence and data that it is actually doing. In that respect, it seems like this year has really been an important leg of the AI journey for procurement where we’ve transitioned from speculating about its capabilities to demanding specifics and tangible results about what successful transformation looks like. As Kelly said, “procurement is ready for the details.”
It’s the Economy, Procurement
Procurement has always been subject to the impact of macroeconomic forces, whether they feel them indirectly or directly. One of the biggest challenges for procurement in 2024 has been predicting the scope and breadth of that impact in order to prepare for more fallout from economic uncertainty and volatility. How will forthcoming federal interest rate cuts affect procurement in the coming months and year? Will we see additional volatility and downstream effects of that? Will it be a hard landing or a soft landing for procurement? It’s an interesting time for procurement to ponder these questions because from an operating model perspective, procurement is certainly in demand, but they’re also not immune to wider economic impacts around cost and expense management.
Economic conditions, along with changes in trade policies, could shift strategies around production, sourcing, and transportation, which could in turn bring procurement and supply chain management into closer conversation with one another.
“I think procurement and supply chain have always been cousins, but starting in 2020, we started getting consciously closer,” added Kelly. “Understanding some of the dynamics going on in the supply chain has made us better procurement professionals, but it has also expanded the scope of our work and even some of our roles into being more operational and closer to what you might think of as a traditional supply chain position.”
Procurement Is Hungry for More
We recently conducted an informal survey where we asked the procurement community about their content habits and needs. We wondered – especially with the explosion of content being generated by AI – if procurement is suffering from information overload. But, the message we got from the survey was that procurement’s content needs are increasing – at least for quality content.
65 percent of respondents reported that their content needs are growing and across multiple types and topics. They are hungry for more targeted, high-quality content – written by real-live procurement professionals for procurement professionals. This drives our strategy at Art of Procurement, but it presents challenges and opportunities for content creators working to provide insights and resources that directly meet the needs of specific industries, roles, and scenarios.
A Lot Hangs on Q4 2024
Procurement has some big issues on the frontburner. As we head into the final quarter of the year, we’ll start to see many of these take shape. The election will take place, federal interest rate cuts and the economy will bear an impact, and many organizations will lock in their digital transformation strategies and contracts for 2025, setting the tone for future AI implementations.
There’s a lot riding on what happens between now and the end, and all of it will demand our active engagement and continuous learning. At AOP, we’re doing our best to support that learning journey – from the upcoming launch of our new website, to our official AOP YouTube channel launch, and our special election coverage targeted specifically for procurement. We’re excited to see how our community will rise to these challenges and opportunities in the coming months.
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