Firms Adapt Procurement Strategies to Changing Conditions

Rhea-AI Summary

Enterprises are re-evaluating their procurement strategies to adapt to changing business requirements and technologies, as highlighted in the 2024 ISG Provider Lens™ global Procurement Services report. The report emphasizes the need for agile, efficient, and resilient procurement systems that leverage data-driven decision-making, strategic sourcing, and AI technologies. Companies are focusing on building long-term supplier partnerships, improving environmental and ethical sourcing practices, and exploring blockchain technology. The report also addresses challenges such as talent shortages and digital transformation barriers.

After transforming procurement systems once, companies are now re-examining them to stay ahead of new requirements, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Enterprises worldwide are revisiting their approaches to procurement as business requirements and technologies rapidly change, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ global Procurement Services report finds that organizations that have already transformed their procurement systems once, often outsourcing some functions and implementing new software platforms, are now considering new approaches. The series of disruptions that began with the COVID-19 pandemic continues to shape companies’ procurement strategies and the services providers offer, ISG says.

“Procurement consulting and outsourcing have changed significantly since 2022,” said Robert Stapleton, partner and Business Outsourcing Services lead for ISG. “Many state-of-the-art solutions adopted before the pandemic do not serve companies well today or prepare them for the future.”

Effective procurement now needs to do more than keep costs low, ISG says. Enterprises are working with providers to build procurement systems that are agile, efficient and resilient amid changing economic and geopolitical conditions. These systems use data-driven decision-making and smoothly interoperate with finance and supply-chain management departments, vendors and suppliers.

As they update their approaches, many companies are also adopting strategic sourcing, unlocking value beyond cost savings by collaborating more deeply with key suppliers, the report says. Long-term supplier partnerships can increase trust and mitigate supply chain risks, enabling better product development and faster innovation.

AI is also beginning to transform procurement processes as enterprises implement end-to-end solutions that can automate repetitive tasks, predict market trends and optimize the choice of suppliers, ISG says. Along with improving efficiency, this development is reducing errors and allowing procurement teams to focus on strategic initiatives instead of routine work.

“The rise of AI and ML represents a fundamental shift in procurement practices,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “It has the potential to improve decision-making and foster better supplier relationships.”

Increasing interest in environmental, social and governance factors among consumers and investors has turned enterprise and service-provider attention toward sustainable and ethical sourcing, ISG says. Anticipating more stringent requirements and penalties in some regions, companies are investigating these concerns as an aspect of risk management.

The report also explores other trends affecting procurement strategies and services, including rising interest in blockchain technology and evolving relationships between providers and clients.

For more insights into the procurement challenges enterprises face, including talent shortages and lagging digital transformation due to inaccessible data, along with advice for overcoming these challenges, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ global Procurement Services report evaluates the capabilities of 26 providers across three quadrants: Procurement Operations Modernization Services, Strategic Sourcing and Category Management Services and Direct Procurement Enablement and Modernization Services.

The report names Accenture, Deloitte, Genpact, GEP, HCLTech, IBM, Infosys, Wipro and WNS Procurement as Leaders in all three quadrants. It names TCS as a Leader in two quadrants and Capgemini and Tech Mahindra as Leaders in one quadrant each.

In addition, Tech Mahindra is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. Corcentric, PwC and TCS are named as Rising Stars in one quadrant each.

In the area of customer experience, PwC is named the global ISG CX Star Performer for 2024 among procurement services providers. PwC earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, which is part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from GEP, Tech Mahindra and WNS Procurement.

The 2024 ISG Provider Lens™ global Procurement Services report is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Euqwerope, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240417770095/en/

Press Contacts:



Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com



Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What does the 2024 ISG Provider Lens™ global Procurement Services report highlight?

The report emphasizes the need for agile, efficient, and resilient procurement systems that leverage data-driven decision-making, strategic sourcing, and AI technologies.

How are companies adapting to changing procurement requirements?

Companies are re-evaluating their procurement strategies to stay ahead of new requirements and technologies.

What are some key trends in procurement strategies mentioned in the PR?

Key trends include building long-term supplier partnerships, improving environmental and ethical sourcing practices, and exploring AI technologies.

Which companies are named as Leaders in all three quadrants of the report?

Accenture, Deloitte, Genpact, GEP, HCLTech, IBM, Infosys, Wipro, and WNS Procurement are named as Leaders in all three quadrants.

What is the significance of AI in transforming procurement processes?

AI is beginning to transform procurement processes by automating repetitive tasks, predicting market trends, and optimizing supplier choices.