For the third year in a row, Amazon Business has released the 2024 State of Business Procurement Report, highlighting the most relevant trends impacting decision-makers across organizations of all sizes. This year’s survey went deeper than ever before, encompassing survey responses from over 3,000 procurement decision-makers in the U.S., France, Germany, Italy, Japan, Spain, and the UK, as well as qualitative interviews with senior procurement executives based in the U.S. and U.K. from a range of industries.
One theme that quickly rose to the top will be no surprise to procurement professionals: Procurement’s aperture has widened. It’s no longer mostly about acquiring goods and services, cost saving, and risk mitigation. Now more than ever, many procurement leaders are finding that creating an exceptional employee experience within the procurement function is equally vital and, for some organizations, a crucial business imperative.
In this article, we'll explore how attracting, retaining, and training top talent, combined with human-machine collaboration, is shaping the future of procurement. We'll also delve into relevant findings from our survey to provide procurement leaders with key insights.
As procurement’s role has expanded in importance within organizations, so too have their responsibilities – and attendant operational complexities. Internal procedures, decision-making, and prioritization now require more strategic deliberation and input from stakeholders. At the same time, the impact of global and regional headwinds – market fluctuations, evolving federal and state regulations, and persistent supply chain disruptions – continue to threaten procurement’s day-to-day operations.
Those we spoke to knew that their success no longer hinges solely on securing the best deals or optimizing cost structures. Indeed, procurement leaders – who have a unique ability to anticipate organizational challenges and needs well ahead of time – told us that in 2024 and beyond, their success will be determined by their ability to train and retain a high caliber of talent that can successfully navigate rising internal and external pressures. To do this, many are looking to technology to help them evolve back-office operations and realize greater efficiencies for their teams.
Attracting, retaining, and nurturing top talent has become the cornerstone of procurement excellence. Our findings underscore the significance of talent management as a top priority for procurement functions. As economic uncertainty looms, organizations recognize that the strength of their talent pool will be a critical factor in navigating the challenges that lie ahead.
The survey further reveals that procurement functions are also taking proactive measures to guard against economic uncertainty. These two key priorities emerge in near equal importance: 86% of leaders said their number one priority for the next two years was retaining and developing talent, while a further 82% said they would prioritize reducing purchasing costs (respondents could select multiple priorities). These priorities reflect a dual strategy – building a skilled and resilient workforce while optimizing procurement processes for cost efficiency.
In this era of digital transformation, the future of procurement hinges on effective human-machine collaboration. Indeed, 98% of survey respondents said they are planning investments in analytics and insights tools, automation, and AI in the next few years. The same number of respondents were interested in discovering or learning about new digital tools that could scale up their procurement operations.
Human-machine collaboration in procurement can lead to better employee engagement, paving the way for seamless procurement experiences that benefit not only employees but also stakeholders, suppliers/partners, and ultimately, end-users and external customers. Further, advanced technologies like AI and automation can streamline routine tasks, allowing procurement professionals to focus on strategic, value-added activities. This not only makes their jobs more fulfilling but also contributes to the organization's success.
Doug Gray, CTO of Amazon Business, said it best: “By investing in tools that digitize, automate, and streamline core functions and processes, procurement leaders can shift their teams to focus less on function, and more on strategy. This realignment of priorities is beneficial for procurement teams, as well as for the rest of their organizations—and it’s an important milestone to reach for businesses looking to drive innovation and efficiency in 2024. Especially during periods of economic uncertainty, it’s important that procurement leaders find intuitive-to-use, trusted technology solutions that can integrate with their existing systems and amplify outputs. This integration is the linchpin for achieving substantial time savings, measured not just in hours but in days.”
“By investing in tools that digitize, automate, and streamline core functions and processes, procurement leaders can shift their teams to focus less on function, and more on strategy.”
— Doug Gray, VP of Technology, Amazon Business
Efficient procurement processes driven by technology create a ripple effect throughout the organization. Stakeholders experience smoother interactions with procurement, leading to increased satisfaction and productivity. When procurement becomes an enabler rather than a bottleneck, relationships with internal customers strengthen, fostering a more harmonious work environment.
This harmony extends beyond organizational boundaries. Suppliers and partners benefit from streamlined procurement processes that enable faster decision-making, reduced lead times, and improved communication. This, in turn, strengthens the supplier network and bolsters the organization's resilience to supply chain disruptions.
The ultimate impact of human-machine collaboration in procurement and it’s potential to greatly improve the employee experience is felt by end-users, external customers, and communities at large. Efficient, motivated talent lead to efficient procurement operations which, in turn, lead to cost savings. Cost savings can be reinvested in the form of employee compensation, training and enrichment opportunities, innovation, sustainability, and community engagement initiatives. The benefits of a frictionless procurement experience extend far beyond the organization's walls.
The significance of the employee experience (EX) cannot be overstated in procurement. Beyond traditional procurement functions, attracting, retaining, and nurturing top talent and fostering human-machine collaboration have become essential drivers of success. Our survey findings underline the pivotal role of talent management as a top priority for the procurement functions in uncertain times. A positive EX influences organizational culture, enhances problem-solving capabilities, and promotes customer-centricity, ultimately leading to higher productivity and efficiency. This transformation not only benefits stakeholders, suppliers, and end-users but also extends its impact to broader societal initiatives. Procurement leaders must seize this opportunity to navigate the transformative landscape, fostering excellence and securing industry leadership for the years ahead.
The 2024 State of Procurement Report was fielded online by KRC Research from June 6 to July 14, 2023, among 3,108 procurement decision-makers and senior leaders familiar with procurement operations at their organization. Respondents were located in the US, France, Germany, Italy, Japan, Spain, and the UK. Respondents spanned nine industries and all commercial sector respondents worked at organizations with a minimum revenue threshold set based on geography.
For more on the biggest challenges – and opportunities – facing procurement leaders in 2024, download the full report.
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