As the Final Days of 2018 Approach, We Look Ahead to What 2019 Will Bring

With only a few days left before the end of 2018 and the arrival of 2019, it is time to look forward and anticipate what might unfold in the coming twelve months.

The year 2019 is set to be one of significant global transformation. We can expect major geopolitical shifts, intensifying trade tensions, and the continued emergence of new tariffs that will impact supply chains and procurement professionals everywhere.

After gathering insights and analyzing key procurement and technology trends expected in the coming year, several major themes are emerging:

Supplier Management

Let us begin with an old issue that still persists today. You may argue that supplier management isn’t a new trend — and you would be right. It has been widely discussed for years. But why, after all this time, are organizations still struggling with it? And why does it remain a critical point of failure for so many procurement teams?

Like it or not, your suppliers hold the key to making your procurement vision a reality.

According to PwC’s Vision 2020 report, 25% of procurement functions will go beyond incremental improvements and undergo fundamental process and policy changes — including how they engage with suppliers. The focus will shift from cost and value to return on investment (ROI).

Such outcomes stem from stronger supplier relationship management, enabling innovation from suppliers (who increasingly act as partners rather than cost drains) and fostering deeper collaboration to solve problems an organization may not even be aware of.

At the heart of this lies communication: choosing the right suppliers and engaging with them more often can uncover insights you didn’t know before.

Blockchain and Digital Adoption

If you’re not entirely closed off from technology trends, you’ve likely heard of blockchain.

From blog posts to webinars, it is one of the hottest procurement topics today — and will remain so throughout 2019. Blockchain is, and will continue to be, a transformative tool for supply chain transparency. It makes the sharing and transfer of data easier and more secure, offering “immutable, signed, and timestamped records of identity, asset ownership, transactions, and contractual obligations.”

This level of transparency brings both opportunities and challenges. Procurement leaders will have greater visibility and a stronger platform to engage with external stakeholders. But procurement processes — once hidden — will be exposed in ways never seen before.

Aligned with the growing influence of blockchain, digital adoption and cloud migration are also expected to rise. Gartner predicts that by 2020, IT spending related to cloud migration will reach USD 1 trillion, as organizations seek greater agility in their IT services.

Social Values

The year 2019 will mark a renewed focus on social values and sustainability. Organizations increasingly recognize that cost and quality are only part of the picture. They not only need to contribute more to their communities, but must also demonstrate compliance and responsibility.

This shift will resonate across supply chains. Ethical practices and community value creation will become standard expectations, and procurement teams will no longer be able to negotiate contracts solely based on cost while ignoring broader societal impacts.

A New Workforce and Automation

You’ve likely heard recent fears surrounding automation, machine learning, and artificial intelligence (AI). Yes — AI will replace certain tasks, and people will need to adapt to new roles. But this is not a future to fear. Although anxiety about change is natural, procurement must grow stronger, more agile, and prepared to evolve.

Infosys predicts that in 2019, AI and automated procurement systems could reduce human-dependent digital workloads by up to 15%. If this becomes reality, procurement teams must accept change and invest in developing, training, and retaining new-generation talent for roles that require human insight — which remains essential.

Risk

From Brexit to escalating trade wars, risk may be the most significant business theme of 2019. Organizations that thrive in this increasingly unstable environment will be those best prepared for the unexpected.

Deloitte believes procurement will evolve into a risk predictor within the enterprise, gaining deeper visibility into cost-related risks and embedding supply chain risk mitigation into contracts and sourcing activities.

Risk will permeate all the trends mentioned above. Brexit, protectionism, and trade conflicts elevate the importance of supplier management and supply chain resilience. Meanwhile, advancing technologies heighten the need for stronger cybersecurity measures.

Procurement is uniquely positioned to address all these risks — but only if it steps forward and takes a leading role. Otherwise, it risks being left behind during a time when its contribution is more critical than ever.