How to make procurement fit for future trends. Geopolitical uncertainties, rapid technological advances and increasing demands on sustainability and ESG are forcing companies to rethink and realign their procurement strategies.
The new KPMG study "Future of Procurement" highlights the five most important trends that will shape procurement in the coming years. KPMG's experts highlight specific recommendations for action and use practical examples to provide insights into the successful design of tomorrow's procurement.
Our findings are supplemented by the results of the KPMG 2023 Global Procurement Survey of 400 senior procurement managers from various industries.
Five trends that are changing procurement sustainably
- Geopolitical tensions and crises in the supply chain
- Rapid advances in artificial intelligence (AI) and automation
- Clear data basis as the key to better decisions
- Sustainability as a key success factor
- Battle for talent: Making procurement more attractive
Geopolitical tensions and crises in the supply chain: Global crises and political tensions such as the war in Ukraine highlight the vulnerability of global supply chains. Companies need to adapt their procurement strategies in order to become more resilient to geopolitical risks and supply chain disruptions. Diversifying procurement markets, strengthening regional supplier networks and increasing transparency in the supply chain are key levers here.
Rapid advances in AI and automation: AI and automation are finding their way into procurement and offer enormous potential for increasing efficiency and optimizing costs. From automated order processing and intelligent contract analysis to AI-supported risk assessment of suppliers - new technologies are fundamentally changing the way procurement works.
A clear data basis is the key to better decisions: The increasing availability of data in procurement is opening up new opportunities for data-driven decisions. By using data analysis and business intelligence, companies can optimize their procurement processes, reduce costs, minimize risks and improve their supplier relationships.
Sven Linden
Partner, Consulting, Value Chain Transformation
KPMG AG Wirtschaftsprüfungsgesellschaft
Julia Kristin Ruf
Partnerin, Consulting - Value Chain Transformation
KPMG AG Wirtschaftsprüfungsgesellschaft
Sustainability as a decisive success factor: ESG (Environmental, Social, Governance) is no longer just a buzzword, but a key success factor for companies. In the procurement sector, sustainable procurement practices, compliance with environmental standards and ensuring fair working conditions in the supply chain are becoming increasingly important.
The battle for talent: The shortage of skilled workers is also hitting procurement hard. In order to attract and retain qualified employees, companies should make roles in these areas more attractive and offer new development opportunities.
From KPMG 2023 Global Procurement Survey:
| 77% of procurement managers state that the risk of supply disruptions is a critical external factor. |
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| 12-18 months Predictive analytics and generative AI are the two key technologies that are likely to have the biggest impact on procurement functions in the next 12-18 months. |
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| 66% of procurement managers state that the increased regulatory requirements and ESG-related requirements will have a major impact on strategic procurement in the next 3-5 years. |
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| 3-5 years The development of ESG skills is the most important priority in the next 3-5 years. |
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| 12-18 months The implementation of data analysis is the most important single measure in the next 12-18 months, say procurement managers according to the survey. |
How you should react to the procurement trends
In the KPMG study, the authors derive "strategic imperatives" from the trends in order to be properly positioned for the future of procurement. Case studies show how implementation can succeed in practice.
Task: A large retail company wanted to achieve complete transparency across its own supply chain in order to be able to trace the origin of all products and raw materials without any gaps.
Solution: KPMG worked with the client to develop a company-wide transparency strategy. This included analyzing the supply chain, identifying relevant data points and implementing suitable technology solutions for data collection and evaluation.
Task: A fintech company in the payments sector wanted to make its supplier management more efficient and at the same time ensure the compliant implementation of Third Party Risk Management (TPRM).
Solution: KPMG supported the company in implementing a standardized, largely automated process for the onboarding, risk assessment and management of over 4,000 suppliers. The use of digital tools and processes increased efficiency. At the same time, compliance with regulatory requirements was ensured.
Task: A European industrial company had set itself ambitious climate targets and needed a comprehensive strategy for decarbonizing its entire value chain.
Solution: KPMG supported the company with a detailed analysis of its carbon footprint. Based on this analysis, a roadmap with concrete measures to reduce emissions was developed. It included both internal improvements in energy management and cooperation with suppliers to reduce the carbon footprint in upstream stages of the value chain.
Actively shaping the future of procurement
Companies that are aware of the outlined trends and implement strategic imperatives can set up their procurement function for the future and use this as a competitive advantage. The experts at KPMG support companies in successfully shaping this challenging transformation.
Download the KPMG study "Future of Procurement" now and find out how you can take advantage of the opportunities of the future in procurement.
