As we turn the corner to a new decade, businesses are looking for ways to address ever-increasing customer expectations: high-quality products and services delivered on demand, without negative impact on the environment or society — and at a reasonable cost.
We asked our global leaders for their perspectives on what to watch for in 2020. Here is what they had to say:
Data Moves From an Analytical to a Decision-Making Tool
Mike Eberhard, president of SAP Intelligent Spend Group: “In 2020, the shift to leveraging data for real-time decision-making will accelerate for a growing number of business functions.
For example, through intelligent platforms and network ecosystems, companies will access more and more data sets to shed light on such things as a potential supplier’s financial capability to fulfill a contract. Data can also be used to make budgetary decisions informed by the current status of each and every area of a company’s spending. Organizations possess, and can access, much or all of this data today – with the right tools.
With an increasing number of data-points uncovered by Internet of Things (IoT) and machine learning, there is more information than ever before to help drive results. This allows organizations to make better sense of what’s happening, what’s coming, and, ultimately, make more intelligent decisions. In the coming year, many more organizations will start to realize the potential of their data to intelligently guide business decisions and leverage it to reach even greater levels of success.
Looking even further into the future, they will eventually be able to determine whether potential suppliers’ policies adhere to international laws and social ethics, and be able to use data to identify, in advance, a host of potential supply chain disruptions, such as a small number of suppliers concentrated in a region vulnerable to weather or man-made disasters”.
Businesses Embrace Sustainable Procurement
Pat McCarthy, senior vice president and general manager of SAP Ariba and SAP Fieldglass: “We’re entering a ‘greener’ decade spurred by people worldwide demanding innovative solutions to a changing climate, and a year that will feature a resolution to Brexit in Europe and ongoing trade negotiations between East and West. Addressing these and other challenges, including the global movement to end forced labor in supply chains, enterprises are seeking to align their brand values with those of like-minded trading partners.
As we enter 2020, we can expect to see an uptick in adoption of intelligent spend management solutions as enterprises increasingly reap their benefits – operationally, reputationally, and sustainably. The best solutions, both for the procurement of direct and indirect goods and for external workforce management, guide users through an intuitive process, and, leveraging third-party content, prompt them about any upcoming issues or challenges so they can make better-informed decisions. Meanwhile, these insights also enable enterprises to procure with purpose.
These opportunities, made possible by cloud-based digital networks, are extending competitive advantages and fueling sustainable procurement at a scale never previously imagined – a phenomenon that is only gathering pace as we head into the new year”.
Adaptability and Flexibility Key
James Lee, chief operating officer of SAP Ariba and SAP Fieldglass: “In times of economic uncertainty, it becomes even more important for businesses to focus on cost-efficiency, compliance, and working capital management.
To prepare for this uncertainty, in 2020, more organizations will think more strategically about how they spend business cash – investing in better spend management strategies that not only cut costs but also create new revenue-driving opportunities to grow and quickly scale. Adaptability and flexibility will be key to recession-proofing, so procurement leaders will need to embrace technologies that can integrate with intelligent technologies and analytics to improve decision-making, speed, and efficiency”.
A New Normal for How Work Gets Done
Arun Srinivasan, general manager of SAP Fieldglass: “With digital disruption reshaping industries and unemployment at record lows, talent is, and will continue to be in the coming decade, in short supply. Many of the skills companies need to compete today aren’t available in the traditional workforce market. The composition of the workforce has forever changed. There is an increased reliance on the external workforce, which comprises contingent workers – think independent contractors, freelancers, and temporary labor – and services providers such as consulting firms, IT outsourcers, and marketing agencies.
To get work done, organizations will increasingly look beyond their traditional employee populations and turn to the external workforce for the skills needed to thrive in the digital economy. Skills needed not just to keep up with the pace of change today but also to drive innovation around artificial intelligence, machine learning, data science, process automation, robotics, and more.
Looking ahead to 2020, expect to see greater engagement of the external workforce as a significant source of competitive advantage. The winners of the war for talent will be the companies paying attention to the demands and desires of all workers – internal and external”.
Profound Shift for Procurement
Darren Koch, chief product officer at SAP Ariba: “As a new decade approaches, businesses large and small are seeing an increasingly clear connection between embracing intelligent spend management – an approach that brings together every source of spend and buying channels and draws upon vast reservoirs of operational data to manage risk, yield, contextual insights, and fund innovation through savings – extending competitive advantage.
Where is intelligent spend management headed in 2020 and beyond? Toward systems that can carry out end-to-end procurement processes for all types of spend within parameters strategically set and overseen by humans. In the coming years, we can expect to see intelligent technologies give rise to autonomous functionality, with cloud-based, artificial intelligence (AI)-enabled applications revealing detailed insights, providing prescriptive recommendations, and unshackling talented procurement professionals from the tedium of low-value administrivia. I believe that, in time, autonomous functionality will represent a profound shift for procurement in much the same sense that autonomous vehicles do for transportation”.
Purpose in Procurement Drives Environmental, Social, Business Impacts
Padmini Ranganathan, global vice president of Risk and Sustainability at SAP Ariba: “There has been a general awareness of environmental and societal issues for decades, but now we are seeing a sense of urgency and demand for real change – propelled by easy-to-share information, compliance requirements, and a growing demand for transparency. Consumers will vote with their dollars, and because of this, companies are leveraging their impact on issues such as climate impact, forced labor, and impact on livelihood and job opportunities as a part of their brand promises.
To be credible, the smart ones will shift from focusing just on cost savings and compliance to true value creation and avoid green washing. Squeezing suppliers on cost just doesn’t cut it anymore. Buyers and suppliers are coming together to create value for their mutual customer – and where else can this happen but from the beginning of the procurement process when sellers come calling with their business cards or buyers scan the globe for the best suppliers? In 2020, watch for more and more businesses to focus on developing transparent, sustainable relationships that have positive impacts on both the environment and society”.
Partnerships Bring More Value in 2020
Sean Thompson, senior vice president of Business Network and Ecosystems at SAP Ariba and SAP Fieldglass: “With the rapid rate of technological change and disruption in the marketplace, 2020 will see partners moving beyond the traditional role of strategic advisor to that of business collaborator and innovator. This collaboration will increase the diversity of business networks and allow companies to take advantage of open APIs to solve critical business challenges. Ultimately, the name of the game is co-opetition, where partnerships allow for doing more for customers together than alone.
We’re also going to see greater efficiency and ease across networks and network-to-network collaboration. All business is global, and companies with varied and diverse supply chains need to rely on clear and concise information to make real-time business decisions across borders and geographies. Data-driven insights will allow buyers and suppliers to think differently about how they source or sell. A continued focus on compliance and reduction in supply chain risk will demand simple, clean, and transparent procurement solutions. The impact will be significant, driving innovation as never seen before”.
Artificial Intelligence Fully Integrated Into Supplier Management
Drew Hofler, vice president of Portfolio Marketing at SAP Ariba and SAP Fieldglass: “In 2020, businesses will extend and accelerate output of existing intelligent technologies, such as AI, by applying them to different business operations and integrating them with one another. The supply chain is a great example of this. For instance, AI will disrupt the manual, error-prone process of managing vendor contracts by automating the process and applying intelligent algorithms. And, AI will be integrated fully into the supplier management process, helping identify high-risk suppliers before purchases are made to ensure suppliers are financially, environmentally, and ethically sustainable”.
Businesses Adopt a Value-Driven Approach to Procurement
James Marland, global vice president for the SAP Center of Excellence for Spend Management at SAP Ariba and SAP Fieldglass: “In 2020, businesses will start to seriously take account of the ethics and values of their customers to drive procurement decisions. As issues such as sustainability, diversity, and working conditions increasingly displace price in the buying decision, businesses will need to adopt a values-driven approach to spend management to ultimately address them. It’s an exciting time to be in procurement – breaking out of the back office and getting to the front lines.
One example of where businesses will look to make a tangible difference is with plastics. Redirecting even a small portion of global spend on packaging to pre-certified suppliers of recycled plastics and alternatives can have a tremendous impact. These suppliers can then grow, reaping benefits from economies of scale, and then start to lower the costs of their products. Ultimately, this practice will make sustainable materials more widely available and economical for buyers. In the next year, inspired by their customers, businesses will leverage spend management and business networks to make a dent in these intractable issues”.