Fairmarkit’s New Year wishes for the procurement solutions and services marketplace 2022

For several years now, Spend Matters has been collecting and publishing a series of predictions about procurement, supply and services trends for the year ahead from expert tech and service providers in the market. This year, given the unpredictability of events throughout 2020/21, we have been asking solution and services providers about their ‘wishes’ for the year ahead instead.

We’ve framed the ‘wishes’ around how they’d like to see their markets evolve, whether that be in terms of software or service, workforce or talent, suites vs best of breed or even the evolution of partnerships and ecosystems. Themes this year tend to be about sustainable procurement (thinking about COP26 and ESG — see our series on ESG here), antifragility versus the resilience we heard a lot about last year, and optimizing decisions with supply chain analytics and scenario modeling software. However, as you’ll see from some of the answers, we still can’t get away from the urge to form predictions, which is understandable given that many firms are busy aligning next year’s activities with what they forecast!

Our series of wishes will run from mid-December to early January, then our analyst Bertrand Maltaverne will wrap up with his own take on the key themes that emerge.

In no order of preference, other than by the date they dropped into our digital letterbox, today let’s hear the three wishes/predictions for 2022 from:

Kevin Frechette, co-founder and CEO of Fairmarkit, intelligent sourcing platform and one of Spend Matters 50 To Watch.

My wishes for 2022

1. 2022 will be the year of the supplier

In 2021, procurement went from a largely neglected area of business to mission-critical operations due to the massive disruptions to the infrastructure that delivers goods and services. In 2022, I believe we’ll see the spotlight shift more specifically to suppliers especially as businesses face mounting pressure from investors and government to diversify and localize their supplier base, not to mention source from eco-conscious and sustainable vendors. As a result, we’ll see an accelerated adoption of tech like artificial intelligence and machine learning within the dynamic between businesses and their suppliers, making it faster, easier and more efficient to run their businesses. This doubling down on supplier enablement and performance tech will have a positive trickle-down effect on the entire organization, particularly the long-neglected procurement teams, by helping the business make more money while also saving money.

2. Digital leaders will thrive and digital laggers will face a long uphill battle

The pandemic years have massively accelerated digitalization initiatives across practically all industries in all geographies, especially within procurement. The procurement teams that made their digital roadmap a priority over the past two years now have the doors wide open to them — they have the credibility and budgets to begin phase two of their digital transformation, resulting in huge upside for the business. They’ll also benefit at the professional level: digital leaders are now so marketable to other large enterprises that haven’t successfully completed phase one that it wouldn’t shock me to see a high amount of turnover and migration among procurement leaders in 2022. On the flip side, those that failed to get the ball rolling on phase one will face a long uphill battle: In two to three years when competitors’ digital initiatives are in full swing and driving a huge impact to their bottom line, digital laggers will be at a big competitive disadvantage. In this increasingly competitive market, digital vanguards will be the real winners, enjoying continuity of the supply chain, better margins, more agile teams, higher supplier diversity or sustainability benchmarks to win competitive business and recruit top talent, better end-user experiences and overall better brand to recruit top talent in this competitive arena.

3. Focus on measurement will shift to focus on action

The assumption going into 2022 is that organizations have largely figured out how to measure —after all, digital platforms continue to gain more venture investment while delivering easier and faster ways to digitize traditional processes. In 2022, it will no longer be acceptable to tell a CFO or a CEO that ‘we can’t measure it’ or ‘we don’t have the data.’ The conversation is about to shift to: ‘We have the data, now what?’ Faced with this pressure from executives, procurement professionals will find themselves in one of three different scenarios:

1. Most of their data is able to be analysed and they now need a flexible platform that can not only identify actionable insights and opportunities from that data, but also automate those in a way that is configurable to quarterly objectives.
2. Most of their data is unstructured and therefore it can’t be analyzed, but they’ve identified the business objectives they’d like to drive towards and are taking action by bringing in tech-first platforms to ensure future optimal data collection.
3. Most data can’t be analyzed, and they’ve conceded to the fact that their data will always be in that format.

My hope is that most procurement leaders realize the opportunity in data and find themselves in either scenario 1 or 2.

And a bonus one from Fairmarkit:

CFOs will give Chief Procurement Officers a seat at the table

A long overshadowed C-suite role is finally grabbing the attention and respect of CFOs given the supply chain issues of the past few years: The Chief Procurement Officer. Chief Procurement Officers are responsible for the flow of resources, services and raw materials needed to sustain a business. In pre-Covid times, their function was largely regarded as a non-strategic, tactical role responsible for managing a company’s vendors. CFOs didn’t take them seriously, and the relationship has been fraught with friction over mis-aligned priorities. But with the pandemic impacting the flow of goods and services, CPOs are now regarded by CFOs as mission-critical. In 2022, I hope that we’ll continue to see this paradigm shift take hold with closer than ever collaboration between the CFO and CPO as they work to influence bottom-line profits and cost reduction amid continuous supply and talent shortages, product delays and more.

Thanks to Fairmarkit, and look out for more solution and services providers wishes/predictions over the next few weeks, with an overall take on the series from our analysts at the end. See more vendor predictions and wishes here with our analyst commentary from last year.

If you are looking for procurement technology to help with your wishes for 2022, try out Spend Matters TechMatch℠ to benchmark and shortlist providers

And if you are looking for procurement services providers to help you with your 2022 decisions, look no further than our Procurement Services Market Landscape Directory.