Against the backdrop of the ongoing restructuring of global supply chains, the procurement function of enterprises is experiencing unprecedented transformation pressures. According to Deloitte's latest Global Procurement Outlook 2024, more than 76% of enterprises have listed digital transformation of procurement as their top strategic goal. In the face of multiple challenges such as increasing economic uncertainty and rising geopolitical risks, the traditional cost-based procurement model has been difficult to adapt to the needs of the new situation. The procurement department is evolving from a single cost control center to a strategic value center that drives innovation and resilience.
In recent years, the procurement industry has shown three significant characteristics. First of all, the digitalization process is accelerating, and the intelligent procurement platform based on artificial intelligence and big data is rapidly popularizing. According to Gartner, by the end of 2023, about 65% of large enterprises have deployed intelligent procurement systems, an increase of nearly 40 percentage points from 2020. These systems not only optimize the traditional RFQ process, but also help companies make strategic purchasing decisions through predictive analytics.
Secondly, the concept of sustainable development is deeply rooted in the hearts of the people. Under the guidance of the "dual carbon" goal, green procurement is becoming an important starting point for enterprises to practice ESG. According to the data, the scale of China's green procurement market will reach 4.2 trillion yuan in 2023, a year-on-year increase of 23.5%. More and more companies are incorporating suppliers' environmental performance into their evaluation systems to promote the transition to a low-carbon supply chain.
Third, unprecedented attention has been paid to the resilience of supply chains. Affected by factors such as global trade frictions and the new crown epidemic, enterprises have generally strengthened the diversified layout of suppliers. According to a McKinsey survey, more than 85% of procurement executives are re-evaluating and optimizing their supplier mix, with 40% planning to increase alternative sources of supply of key raw materials.
Under the wave of digitalization, procurement transformation needs to be synchronized from three dimensions. First of all, at the level of technology empowerment, enterprises need to build a unified procurement digital platform. Through the standardized collection and intelligent analysis of source data, the visual management of the whole procurement process is realized. IDC predicts that by 2025, the global market size of digital procurement solutions will exceed $30 billion.
The second is the process optimization level, which needs to reshape the traditional procurement operation model. Dramatically improve procurement efficiency through process automation and intelligent approvals. According to data, enterprises that adopt RPA (Robotic Process Automation) technology have increased the efficiency of procurement operations by an average of 35%, and the human error rate has been reduced by more than 60%.
The third is talent training, where the new generation of procurement talents needs to have digital thinking and cross-domain integration capabilities. According to the 2024 Talent in Demand Report released by LinkedIn, the shortage rate of professionals with digital procurement management capabilities is as high as 42%.
Looking forward to the future, the procurement industry will show more obvious intelligent and collaborative characteristics. A transparent procurement ecosystem based on blockchain technology is taking shape, and traceability and compliance will be further strengthened. According to PwC's prediction, by 2025, about 50% of large enterprises will use blockchain technology in their procurement.
The in-depth application of artificial intelligence will bring about the innovation of procurement decision-making mode. Through machine learning algorithms, the system is able to automatically predict demand, optimize inventory, and provide intelligent quotation suggestions. Forrester, a market research firm, predicts that the penetration rate of AI-driven intelligent procurement decision support systems will reach 55% by 2026.
At the same time, procurement will be more closely integrated with other business functions. According to the data, 62% of enterprises have begun to promote collaborative innovation in procurement, R&D, production and other links, and this trend is expected to continue to strengthen.
In the era of the digital economy, procurement is transforming from a traditional cost center to a strategic engine for enterprise value creation. Enterprises need to continuously improve the construction of digital procurement systems, cultivate compound talents, and promote procurement innovation. Only by embracing change can we maintain a competitive edge in an uncertain future.
oguz@flowbase.com