IT Procurement Trends 2022: The 6 most important topics in indirect procurement of the future
The world of work is in a constant state of change and internationalisation demands fast-moving and flexible companies and their purchasing departments in order to remain competitive. The COVID-19 pandemic crisis in particular has driven digitalisation with power, resulting in many opportunities but also some challenges for the procurement sector. Companies with international supply chains have felt this most acutely. Just-in-time delivery was turned upside down during this time and the industry is still struggling with the consequences. The proposed solutions are better networking and compatibility of systems that ensure continuous data exchange to better manage such risks. This requires a range of new skills that employees need to bring to the table. In order for companies to remain competitive with their IT purchasing, they are required to keep up with the latest developments.
These are the top 6 IT procurement trends for 2022 that we have identified:
1. risk monitoring
The pandemic has shown how important it is to establish comprehensive 24/7 risk monitoring with regard to locations, cyber risks and employees in procurement. New supply chain technologies pave the way to improve transparency throughout the supply chain and to detect potential risks at suppliers and along the supply chain at an early stage. To better address or mitigate risks, companies need to have a view of suppliers, carriers, partners as well as all other actors along their supply chain. Supplier data has become a priority as it creates connections between systems and drives automation through artificial intelligence and artificial learning. Thus, security can be ensured along the supply chain. The supply shortages of many materials has also pointed to the lack of diversification in procurement among companies. Purchasing departments are challenged to include alternative suppliers worldwide in their portfolio to better manage future crises. Automation is becoming a key priority on the road to digital transformation.
2. interoperability, standardisation and API
Through digitalisation, there is more and more data available for the analysis and networking of different systems. The problem, however, is that the data varies from industry to industry and interoperability is often lacking, which is why it often remains unused. It is still not easy for companies to find suitable suppliers in suitable locations. In the future, networks must be able to communicate with each other to ensure data transparency. SCCEU predicts that cross-domain multi-domain master data management (MDM) will become increasingly less important as it is too disconnected from front-end users and processes. The next generation of tools connects data governance with front-end business processes. Point-to-point integrations offer a solution to connect this data together - but with too many connections this can become confusing. Hub-and-spoke integrations create a base on which all data is consolidated so that systems can be connected. Another possibility is to include a programming interface, a so-called API (Application Programming Interface), which enables efficient development, maintenance and administration of data interfaces.
3. cloud & data security
With increasing networking and standardisation of data, the topic of cloud & data security is becoming more important as there are ever greater volumes of data and cyber attacks increase. The trend in this direction will continue, such as the distributed cloud. This is an architecture where multiple clouds are used to meet compliance and performance requirements. This distribution of services allows an organisation to meet very specific response time and performance requirements, regulatory or governance compliance mandates, or other requirements that require the cloud infrastructure to be located somewhere other than the cloud provider's typical availability zones. This enables operations to achieve better control, compliance with data protection regulations and rapid content delivery, which is particularly important for users of real-time data such as in factory automation.
4 Hidden potential in indirect purchasing
Companies have a very precise overview of their direct goods purchasing for their core business. This is often not the case with indirect purchasing, where the purchase of services, IT and marketing are included, although it accounts for 15-30% of total purchasing, depending on the company. Indirect goods are assigned less importance and therefore departments often purchase their products and services without involving the purchasing department. As a result, high purchasing volumes are bypassed by the procurement department and, when added up, can have a significant impact on the company's profit. In order to see in which areas Procurement can best support the business departments with its value creation and expertise, it is useful to analyse categories of goods according to risk and impact on the company(INVERTO). A stronger focus on indirect purchasing can increase quality and offers savings potential. With innovative IT solutions, indirect spend data can be better bundled and monitored.
5. remote & hybrid working
The big challenge for management and human resources in the coming years is to ensure how employees can best fulfil their potential. The COVID-19 pandemic has shown people that they have a variety of options to better balance life and work and that the office is no longer the number one workplace. Many have discovered the home office for themselves, hybrid working models, but also working remotely while travelling across a country. It shows that a hybrid working model has a positive impact on mental health and working relationships and 83% of people consider it a preferred working model. There is a risk that employees will quit if they are no longer offered flexible working arrangements. In some sectors, especially in IT professions, a real battle for skilled workers has broken out. Companies that understand what forms of work their employees need in order to be productive and healthy will be at the forefront of attracting key personnel. Employee needs have come to the fore even more since the pandemic and are also being demanded. Salary is still an important consideration in employee satisfaction, but health and social factors are becoming more critical in making the right job choice. People want to feel understood and valued in their jobs and by their employers. In addition to the aforementioned expectations of employers, there is still pressure to make progress on diversity and inclusion within the company, especially at the management level.
6. continuing education and data-based matching
Another issue in the fast-paced world is that knowledge changes quickly and employees need training to keep their knowledge up to date. New technologies, more data and complex systems require training and retraining initiatives from companies. Many industries are increasingly challenged to find employees with specific skills. The lack of a school or university degree becomes a minor issue if the person has the right skills. Data-driven recruiting promotes a perfect match between candidates and companies. Algorithms and key words help recruiters suggest the right profiles. Applicants also benefit from this matching, as they no longer have to scroll through countless job ads. In order to remain competitive, companies need to develop and train their skilled workers accordingly. Training must be targeted and coordinated between companies and employees, so that both sides derive tangible benefits from it.
Challenges and tips in IT purchasing:
Companies and entire industries are facing the great challenge of increasingly relying on new technologies in the procurement area in order to better monitor supply chains and to be able to intervene quickly in the event of dangers, to facilitate the exchange of information and to automate processes. It has long been possible to speak of IT purchasing, since a purchasing department with the right focus in the area of digitalisation and data can fall back on a multitude of advantages. Purchasing departments are challenged to invest in these areas. One tip for IT procurement is to be careful not to become dependent on one IT service provider and to strive for flexible contract arrangements such as pay per use. Before signing a contract, it is important to review the service level agreements and adapt them to the upcoming project as well as define clear performance KPIs.
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