New Year Insights for the procurement solutions and services marketplace 2024: INVERTO

For several years now, Spend Matters has been collecting and publishing a series of articles about procurement, supply and services trends for the year ahead from expert tech and service providers in the market.

This year we’re highlighting the customer demands, market movements and advances in procurement tech that are exciting the world of solution providers, how they expect them to shape the S2P landscape next year and how they plan to respond to them.

Our series runs from mid-December to mid-January, then our senior analysts will wrap up with their own take on the key themes that emerge.

In no order of preference, other than by the date they arrived in our inbox, today let’s hear from Sushank Agarwal, Managing Director of INVERTO.

In a climate in which customers and businesses have ever-changing requirements, new business and operating models will be vital for procurement as its remit and criticality for the firm continues to expand. In 2024, this will require continued transformation as businesses look to increase resilience, swift value delivery, combatting inflation and sustainable procurement practices.

Rapid value delivery

As inflation begins to cool, the challenge for businesses in 2024 and beyond will be to systematically capture this release of prices in most areas. This is where AI can come into its own, allowing procurement to establish full price transparency and scrutinize vendor requests to determine whether price increases were overly inflated. Index-linked clauses with key suppliers can also be used to ensure fairness and balanced exposure for all parties.

Amid lower growth forecasts and higher interest rates, companies continue to grapple with the challenge of swiftly optimizing working capital. This optimization allows them to improve cash flow to allow strategic flexibility, ensure a leaner balance sheet and improve their bottom-line through less bad debt, less obsolete inventory and decreased financing costs.

Resilience

In light of increased geopolitical uncertainty and extreme weather events, the focus on strengthening supply chains against disruptions will remain. Consequently, the traction of nearshoring and friendshoring initiatives will intensify, supported by findings from the INVERTO Nearshoring Survey 2023 which revealed that 90% of companies see nearshoring as a key approach to safeguarding supply chains. There has also been a growing appreciation that, when done intelligently, buying closer to home can not only ensure greater reliability of supply and higher flexibility, but also be more cost-effective in terms of Total Cost of Ownership. As businesses seek greater control over risk, sustainability, availability and costs, some businesses are contemplating full backward integration in the value chain.

Supplier-centric approach

Recent challenges have upended various dynamics, notably the relationship between customers and suppliers. This ongoing trend accelerates the shift from a historically category-centric, price-focused approach to a more supplier-centric paradigm. Clients strive to position themselves as ‘customers of choice,’ a strategic move aimed at strengthening their supply chains.

Sustainable procurement

While supply security and cost remain top priorities, ESG legislation is beginning to put pressure on businesses to move towards decarbonization and ethical sourcing practices. Circular supply models and inclusive chains are gaining importance. Businesses will also need to prioritize the right energy mix and strengthen infrastructure to help them in achieving their sustainable procurement goals.

Many thanks to INVERTO for being a part of the series.

Read our senior analyst’s take on the key themes from the series here.

If you need to find the right procurement technology provider or service for your business needs next year, try Spend Matters TechMatch for a free rapid shortlist.

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As always, reach out to discover how Spend Matters can help with your new year commitments and wishes.