Looking Forward – Where do we go from here?

Last December, it could be argued that I took the easy option and reviewed other people’s predictions.  

This year I thought I’d take up the challenge myself.  As I sit here at the end of 2018 there is so much happening that possibly the only accurate prediction for 2019 is that it will be interesting!  So I hope you’ll forgive me for moving the goalposts a little.

It’s not currently clear on what terms the UK will leave the EU, or even whether the Prime Minister will be able to ride out the storm to see it through.  Looking further afield, commentators in the US are split between Trump steam-rolling his way to a second term or seeing his Presidency skewered by multiple law-suits.

I’m going to look further ahead.   I’ve picked out 5 themes that I think will shape the next 3 to 5 years.  Issues such as globalisation, social transparency, risk management and sustainability present ongoing challenges to the way we do business and procurement in particular.    With Moore’s law seemingly in overdrive in every aspect of life, the need for innovation has become a constant.

Globalisation

The rise of China, India, South America and, more recently, Africa has been well-documented.   The emergence of these countries as consumer markets as well as low-cost manufacturing hubs will have unknown implications for all product and service companies.

The shape of trade arrangements – not to mention changing attitudes and political environments – will create myriad logistics, sourcing, legal, regulatory and tax considerations for all businesses.  Globalisation is no longer an emerging trend, it’s an ongoing reality and organisations must put aside old ideas of markets and supply if they are to prosper.

Social Transparency

The coming-of-age of Generations Y and Z will see business having to operate in a social environment that was almost unimaginable ten years ago.  The increasing acceptance of information transparency and the degree of scrutiny that comes in the social media age is disrupting traditional corporate norms.

Organisations will need to be able to demonstrate to consumers, regulators and the press that they ‘walk their talk’.   A rise in consumer activism brings risks, challenges and opportunities alike. Procurement is well placed help businesses develop operating models that rise to this challenge.

Risk Management

With change comes risk.  As markets, consumers and supply chains all evolve at a rapid pace risk management will become increasingly important.   For procurement that will mean deeper understanding of the roles played by suppliers – requiring more than just analytical rigour.

Innovation

Technology and consumer trends are evolving at ever faster speeds – creating pressures all along the supply chain.   Innovation is becoming central to many business operations – we’ve seen organisations creating dedicated spaces within their offices for a number of years.  I can see this moving further to changes in organisational structures.

Procurement will have a significant role to play in sourcing operational skill and innovation – identifying specialised partners to drive new product development and evolution.

Sustainability

As it becomes harder to ignore the perilous state of our environment there are inevitable pressures for sustainability.   The rubicon that needs to be crossed involves decoupling commercial performance from resource exploitation – sustainable business needs to be good business.

Sustainability’s heightened priority will lead to new regulatory pressures, social risks and will require organisations to innovate further.   

What I’d love to see is the generational shift set the stage for a circular economy – where value creation aligned with environmental and societal improvement not degradation.   I suspect setting a deadline of 3-5 years might be over-ambitious, but it would be great to make some strides forward.