2021 Source-to-Pay Predictions
Welcome to the Future
As we emerge from the rubble of 2020, it’s clear that things have changed dramatically, and that they’re going to continue. Source to pay technology continues to evolve as emerging technologies take center stage, and the role of the procurement department is more important than ever. As organizations aim to drive cost savings, reduce risk, and bring overall stability, expertise is needed at every stage from source to pay.
Download our autonomous procurement white paper to see how technology will continue to drive progress.
So what exactly will 2021 look like? We’ve taken our 25 years of experience and put together some predictions about how source-to-pay processes will continue to evolve throughout the year.
A Post-COVID World
While it’s clearly premature to say we’re out of the woods and the virus continues to claim lives around the world, there is some cause for optimism as vaccine rollout ramps up. Organizations – and their spend management teams – are starting to plan for what comes next.
Relationships Will Come to the Forefront
So much time in 2020 was dedicated to figuring out how we could keep up our relationships, including professional ones. And those relationships proved to be as valuable as ever. As certain items and materials spiked in demand and became hard to procure, business partnerships helped organizations navigate the chaos. It’s no secret that suppliers prioritize buyers that they have close relationships with and vice versa.
We anticipate an emphasis on personal relationships to continue through 2021 at every stage of the source to contract workflow. Whether you’re negotiating a new deal or evaluating supplier performance, people will be at the center of it. According to JAGGAER Senior Vice President of Strategic Operations Kristian O’Meara, even though technology will continue to evolve, “relationships will ultimately be the essential link for supply chain success and will become more of a priority for global organizations in 2021 as we face ongoing uncertainty.” Keep focus on your people and partners.
Diversification and Diversity Will Increase
It’s no secret that many of the companies that adapted best to the strains of 2020 were those who had a diverse supplier base and could quickly pivot according to supply chain demands. Providing multiple purchasing options will help all organizations as they emerge from the pandemic. Beyond that, though, many parts of the world are seeing increased calls to fight social injustice. O’Meara emphasizes the importance of having a supply base that mirrors the customer base, but also increasing diversity within your own procurement team.
Diversification will have impacts downstream, too. Whether you’re implementing diverse purchasing requirements or offering options to your organization, prioritizing and flagging items in your shopping interface will be key. Diversification doesn’t end with just risk management. Instead, it carries through the full end to end process.
Regulations and Introspection will Shape the Future
Between emerging from COVID-19, adapting to a new administration in the U.S., and navigating the impacts of Brexit, many business leaders will be in a haze of shifting regulations. Because no one can predict the future and what regulatory changes might come, the key is to remain flexible.
The best organizations will take this period of uncertainty as an opportunity. By looking deep within their organization, they’ll find areas of potential weakness to strengthen, priorities that should be reshuffled, and employee skills that could use sharpening. This introspection will position procurement teams to better excel when the forecast becomes more clear.
AI Continues to Lead
Of course, there are technological advancements that will continue to push the practice forward and shape the coming year. Artificial intelligence continues to evolve, bringing new automation capabilities to source-to-pay solutions.
A Rise in Practical AI
For the better part of a decade, artificial intelligence has existed as something of an intangible hype piece. Experts theorized about the benefits it would bring, but only recently have they become real. We’ve written extensively about autonomous procurement, and we believe that 2021 is the year it really takes off for leading organizations. This will come in the form of truly practical implementations – things that will have a material impact on your team’s efficiency and bottom line.
Whether you’re automating exception handling, streamlining invoices, or automating analytics, you’ll see AI have a measurable impact in practical ways. By embracing the future now, you can stay ahead of the curve and be among the first to realize the benefits.
The Systems Behind Data will be Scrutinized
As you’ve probably heard a hundred times, AI and machine learning rely on a strong collection of data to provide reliable results. As we increase our reliance on these technologies, it becomes more important than ever to take a deep dive into where that data is coming from and to ensure its accuracy. Big data will continue to explode in 2021, but it’s only useful if it’s reliable. AI is largely unregulated, and in the meantime, says JAGGAER VP of Product Management Amenallah Reghimi, “the court of public opinion will still demand trust, transparency, and ethical use of AI, and it’s up to organizations to hold themselves accountable.” Part of that accountability is auditing your data sources and making sure that you’re making decisions based on sound evidence.
People will Prove their Value
No matter how powerful artificial intelligence gets, the human element will prevail. In 2021, employees will continue to prove that they’re the most important leg of the so-called “golden triangle,” – people, processes and technology.
When we experienced a global health and economic crisis, it was the people who adapted and made decisions to keep things afloat. Technology certainly helped, but the intuition and problem-solving skills of humans proved invaluable. In 2021, they’ll be the ones who make the decisions about how to use these technologies and what strategic actions can be taken to bring about recovery and future success.
Uncertainty isn’t a Death Sentence
It would be dishonest to say that things have returned to normal. There’s still a great deal of uncertainty and, at times, chaos. The important thing to remember is that this is temporary, and that with the right skills, people and tools, you can emerge stronger on the other side.
JAGGAER is here to help along the way. For more on how autonomous procurement will come to fruition in 2021, download our white paper, Autonomous Procurement: The Technologies That Are Driving Progress.