The top trends to optimize your purchasing strategy in 2024
Every year the cards for purchasing trends are reshuffled, and 2024 is no exception, driven by the rise of new technologies, the growing importance of sustainability criteria, and risk management. To remain competitive and efficient, it is essential to stay on top of trends in the procurement market.
In this article, we will explore the main trends to optimize your procurement strategy.
Trend 1: Artificial Intelligence (AI) and Machine Learning
Formerly the 4th trend, AI and Machine Learning are now number one. Why? Because they revolutionize decision-making in purchasing . By exploiting the capabilities of AI to analyze huge volumes of data, streamline the management of processes and documents (contracts, invoices, supplier files, etc.). Purchasing can now anticipate market trends, as their role evolves towards a less operational and more strategic dimension thanks to AI. The challenge for purchasing organizations today is more to find how to use AI, and how to train teams in its use.
Trend 2: Corporate Social Responsibility (CSR) or ESG
The arrival of the CSRD directive in 2024 marks a new turning point in purchasing in terms of extra financial reporting on sustainability with numerous consequences. The CSRD sets standards and obligations and requires companies to publish an ESG (environmental, social, and governance) report each year.
The new concept of dual materiality focuses on both positive and negative impacts of business and sustainability. Financial materiality considers the sustainable issues’ impact on the financial performance of a company, while materiality assesses the company’s impact on its environment.
Companies must report emissions for Scope 3. There is a duty of care with an emphasis on supply chain transparency, requiring compliance with environmental standards in collaboration with their suppliers to guarantee a sustainable supply.
Trend 3: Cost Reduction
With inflation, supply chain disruptions, increased competition, cost reduction is returning to the forefront of trends to optimize your Procurement strategy in 2024 and maintain or increase profitability and competitiveness. The automation of P2P processes is therefore a major lever for cost reduction.
Trend 4: Digital Transformation
Whether it is preparing for the reform of electronic invoicing, ensuring compliance with the CSRD or simply improving the efficiency of processes, digital transformation is and will remain an essential pillar of purchasing.
Thanks to the automation, visibility and control it offers over data, digital transformation makes it possible to carry out a variety of projects: compliance, efficiency, collaboration with suppliers, etc.
In short, digital transformation is a necessity for purchasing who wish to remain agile, competitive and contribute significantly to the overall success of their company.
Trend 5: Risk and Supply Chain Management
Disruptions such as the COVID-19 pandemic have highlighted the importance of risk management in the supply chain. By identifying, assessing and mitigating potential risks throughout the supply chain, procurement teams can prevent costly disruptions and ensure business continuity. Whether risks related to supplier availability, price fluctuations, quality issues, regulatory constraints or natural disasters, proactive risk management helps minimize financial losses and protect the company’s reputation.
As the procurement landscape continues to evolve, it is essential for procurement to stay on top of market trends and adapt to new developments. The key trends we’ve explored in this article are both challenges and opportunities for procurement professionals.