Gartner® Top 4 Predictions for Procurement in 2024
If the last five years have taught procurement professionals anything, it’s that things can change in an instant. From a global pandemic completely disrupting supply chains to the emergence of artificial intelligence (AI) as a game-changing technology to automate sourcing, the industry is on a fast track to depart from the status quo of procurement in decades past.
As emerging challenges are met with technological solutions, there’s no question that the future of procurement in 2024 and beyond is being shaped by technology’s impact. The latest Gartner report, “Predicts 2024: CPOs Adjust to Technology’s Impact on Procurement” breaks down with precision the myriad ways technology is shaping the role of the CPO and procurement as a whole.
To discover how technology is affecting procurement this year, let’s break down four of our takeaways of the most important insights and predictions from Gartner:
- Procurement technology roadmaps
- Shifting employee skill sets
- Sourcing as a skill vs. a function
- Benefits of using AI-enabled platforms
1. Technology Roadmaps Are Essential for Procurement Leaders
One of the most important steps for procurement leaders to take in 2024 is analyzing, planning, and implementing a technology roadmap. Since over half of procurement leaders expect their budgets to increase in 2024, and 98% are planning to invest in technology such as analytics and insights tools, automation, and AI, it tracks that ensuring those investments are sound should be a top priority for CPOs.
Gartner recommends procurement leaders start by “build[ing] a roadmap by mapping the technologies already in place for key areas such as collaboration, negotiation and sourcing, and recording how well they support advanced technologies.” This will help leaders to determine areas of improvement as they add to their overall technology toolkit.
Why is a technology roadmap so important? As technologies evolve, taking a systematic approach to researching and implementing new tools will help eliminate costly errors, make next steps more clear, and introduce more rigor to the technology selection and adoption process.
Subscribe to news from Arkestro.
No spam, just relevant procurement news and tips. You can unsubscribe at any time.
2. Procurement Skills Are Evolving
As any CPO knows all too well, procurement staffing is always under pressure. If it’s not due to a lack of staff (although it often is), the pressure comes from staff without the requisite skills and experience to effectively execute day-to-day operations.
This issue will only be exacerbated as technology is increasingly intertwined with procurement processes. According to the 2023 Gartner Procurement Competencies Survey, only 14% of procurement leaders believe they have the talent to meet future business requirements.
Where they once were at the helm of most communication-focused tasks, procurement staff will now need to learn more hard technical skills if they want to stay relevant in the age of AI. Indeed, Gartner predicts, “by 2026, advanced proficiency in data and technology competencies will be equally as important as social and creative competencies (i.e., soft skills) for procurement staff.”
Procurement leaders are already taking this seriously, with 86% of leaders making retaining and developing talent their number-one priority in the next two years. Digital fluency, especially when it comes to data, will be a crucial procurement skill in the years to come.
3. The New Role of Sourcing
Another consequence of the new era of technology is how different sourcing will look in the next few years. Gartner states, “by 2027, 40% of sourcing events will be executed by non-procurement staff.” Sourcing is no longer just a function of procurement, but a fine-tuned skill procurement professionals need to hone.
After all, when AI and other platforms like Predictive Procurement Orchestration enter the picture, organizations will be empowered to run even more sourcing events. That, in turn, can drive incremental cost reductions, increase policy compliance, and ultimately give organizations a competitive advantage they’ve never had before.
For staff, it will no longer be about driving sourcing events alone, but making use of high-quality data surrounding spend, suppliers, and market conditions to apply AI-augmented capabilities to sourcing that achieve the best outcomes. In other words, traditional sourcing will become obsolete. How skillfully procurement staff can turn sourcing into a competitive driver of success will make all the difference.
4. Benefits of AI-Enabled Platforms
Last but certainly not least, AI and AI-enabled technologies will be one of the most important drivers of disruption in the coming years for procurement. Gartner warns that, “procurement organizations that do not embrace AI technologies will find themselves at a cost and agility deficit compared to their competitors.”
For example, here are some critical use cases for AI-driven technologies in procurement:
- Negotiations: “By 2027, 50% of organizations will support supplier contract negotiations through the use of AI-enabled contract risk analysis and redlining tools,” Gartner predicts.
- Contracts: “GenAI has accelerated the ability to craft new contract terms and suggest redlines in contracts.”
- Sourcing: Platforms using technology like Predictive Procurement Orchestration can run more events, resulting in better prices, more competitiveness, and reduced business risk.
The proof is in the procurement results — 56% of procurement leaders agree AI will impact their bottom line and are prioritizing AI with an immediate impact on revenue or costs. Plus, by saving procurement teams time in the areas above, staff will have increased capacity to take on more strategic work that requires a more human touch. And finally, AI can augment existing skills, leveling up people with less experience to high-skilled procurement professionals at a much faster rate.
Arkestro: A Platform for the Future of Procurement
Ultimately, Gartner findings indicate what CPOs already have guessed — keeping up with the trajectory of procurement technology and making sure you’re not left behind will be crucial for success. Whether it’s building a clear technology roadmap, upskilling employees, or exploring AI solutions, procurement leaders have their work cut out for them in the coming years.
Arkestro’s Predictive Procurement Orchestration (PPO) can make the process easier. With integrations for any third-party or custom data source, our platform can drive better buying decisions, faster, at scale. Powered by AI, Arkestro can become your team’s secret weapon for leveling up your procurement activities.
Request a demo to see how your team could save 16% within the first 60 days, run 3X as many events, and reach more addressable spend with the same resources.
Download the full Gartner report for more ideas on how your team can turn these insights into action.
Gartner, Predicts 2024: CPOs Adjust to Technology’s Impact on Procurement, Micky Keck, Kaitlynn Sommers, et al., 4 January 2024