What Does 2024 and The Future of Procurement Hold?

Procurement is undergoing a massive shift in 2024. While not entirely different from previous years, Chief Procurement Officers (CPOs) and procurement leaders are tasked with more complex problems that require more sophisticated strategies. Procurement teams are not only tasked with saving money while simultaneously hitting company goals, they also must consider the growing importance of ESG (environmental, social, and governance), and the impact of new AI technologies and digital trends that are evolving rapidly. 

In this blog post, we’ll look at what 2024 and the future of procurement holds including best practices for effective planning, the current trends shaping the industry, and how to execute successfully. 

The State of Procurement in 2024

While the procurement landscape is continuing to change, sustainability, cost savings, and supply-chain resilience remain the most important priorities for procurement in 2024. A recent report from Amazon Business also suggests that one of the biggest changes in 2024 is procurement’s increase in spending and investments, with 98% of respondents planning investments in new technologies, specifically artificial intelligence (AI), analytics, and automation. These new AI solutions will improve the speed, efficiency, accuracy, and efficacy of procurement teams, ultimately improving company performance. 

While many procurement teams are embracing these new technologies, there are still many obstacles to overcome—the lack of visibility into spend, siloed teams and processes, bad data quality, and poor supplier management are just a few. Digital transformations will be crucial to help procurement:

• Automate processes to reduce time-consuming, error prone, manual tasks 
• Improve data quality and management by providing real-time visibility into spend data and analytics for better decision making 
• Facilitate better supplier management with supplier performance insights that foster better supplier relationships, improve supplier optimization, and reduce supply-chain risks. 

Procurement teams that invest in technologies in 2024 to overcome these hurdles will ultimately realize greater cost-savings, free up more time for strategic projects, and mitigate supply-chain risks. 

What effective procurement planning looks like in 2024

According to an Accenture report, after the COVID-19 pandemic, 94% of Fortune 1000 companies saw supply chain disruptions, and 75% had negative or strongly negative impacts on their businesses. Even in the most challenging times, procurement and supply-chain leaders were reminded of the importance of strategic procurement planning. Effective procurement plans can not only help the business reach its goals, but can also improve cost-savings, mitigate risks, increase processing times, improve sustainability efforts, and optimize supplier management and strategic sourcing.  

How to develop a strategic procurement plan 

The best way to ensure your procurement plan is going to be as effective as possible is to include all of the departments in your organization and collaborate with stakeholders. Each team requires different goods and services, so it is essential to include their unique requirements in your strategic plan to address gaps and needs. The plan should also include cost-saving strategies, risk mitigations, and compliance criteria. Lastly, the objectives should be clearly defined, along with a time frame for achieving them. 

What your 2024 procurement plan should include 

Adoption of new technologies like GenAI

With GenAI evolving at lightning speed, it can feel impossible to keep up with all the new developments. However, new generative AI (GenAI) procurement solutions are critical to include in your 2024 procurement plans as they unlock enormous efficiencies for teams. Automated demand intake and RFP workflows can bridge the gap between procurement and business stakeholders and reduce process times from weeks to minutes. These solutions can also create a unified end-user experience for buyers, suppliers, and business requesters.

For example, incorporating Fairmarkit’s intake tool into your procurement plans can replace clunky forms, spreadsheets, and lengthy phone calls with a self-serve generative AI experience that responds to natural language inputs and provides procurement with a one-stop for capturing and managing business demand. The addition of these tools allows procurement teams to do more with less—capture and automatically categorize spend, reduce cycle times, and unify the end-user experience under a single autonomous sourcing platform without the addition of headcount. 

Sustainability and supplier diversity goals

With the uncertain impact of natural disasters and geopolitical events, incorporating sustainability and supplier diversity goals into your procurement plan is imperative for maintaining a successful procurement and supply-chain function in 2024. Considering the economic, environmental, and social impacts of any purchases you make will not only help your organization achieve value for money but generate benefits for society and the broader economy as a whole. Even the experts say that it’s a mistake to ignore sustainable procurement. 

Look to sustainability leaders like Barry Parkin, Chief Procurement and Sustainability Officer at Mars, for a great example of championing sustainable procurement practices. He made the inaugural Champions of Change list for his tireless efforts to move the confectionary leader to a more sustainable supply chain. Parkin also helps the company’s suppliers develop sustainable agriculture projects that improve incomes for small farmers while also tackling food security and restoring ecosystems. 

Putting your plan into action with Fairmarkit 

Once you’ve established your procurement plan for the year, it's time to put it into action. To do so successfully, it’s necessary to secure stakeholder buy-in and ensure alignment with the overall business strategy. Departmental buy-in throughout the organization will make implementing your procurement plan and adherence to it much easier and more effective. 

Be sure to review and update your procurement plan as business goals, priorities, and processes change throughout the year. Identify what works best for your organization and what doesn’t so you can continuously improve existing procurement processes, test new strategies, identify best practices, and course correct. 

Are you ready to put your strategic procurement plan into action and leverage software to help you hit your 2024 targets? Fairmarkit can help bring your goals into reach. Request a Fairmarkit demo and see how we can assist in your 2024 procurement planning, processes, and beyond.