How suppliers can capitalise on procurement trends 

Trend 1 – The rise, and rise of technology

The procurement function is continuing to adopt technology (particularly AI applications) to drive efficiencies and improve supply chain visibility. Due to the ever-increasing pace of technology adoption, suppliers need to be receptive and responsive to future sourcing processes changes and client organisation requirements.

Savvy suppliers should look for ways to deepen technological relationships with buyers, for example through more comprehensive data and information sharing. We see little downside in venturing ideas and being willing to co-create solutions. Even putting a little skin in the game can demonstrate your willingness to take a partnership-based approach to technology embedment.

And when it comes to developing tender submissions, please don’t insult evaluators by submitting generic, AI-generated content without verifying and tailoring the output it to the opportunity in question.

Buyers are still grappling with their position on this, but it’s fair to assume they’ll take a negative view of copy-pasted AI-generated submission content that clearly misses the mark.  AI tendering technology  (like our own BidWriteGPT) will undoubtedly transform contract pursuit and capture, but we humans will still need to ideate, innovate and create when finding the best solutions for our customers’ problems. We’ll just spend less time creating the words to articulate that in our bids.

Trend 2 – Continued focus on cost reduction

Buyers have always been accountable for delivering value for money (VFM) to their organisations. VFM is ever-changing; a function of market conditions as much as organisational strategy.

Presently, we’re seeing organisations focus on building cashflow reserves to bolster commercial resilience. With cost concerns clearly in the procurement crosshairs, your ability to demonstrate wider value is key to heading off ‘race to the bottom’ tendering. Think of it this way – if you give evaluators no other reason than to decide on price alone, that’s exactly what they’ll do. When it comes to capitalising on procurement trends like cost-reduction, the ability to rationally unpack and communicate value is a must-have for your bidding toolkit.  

Trend 3 – Building an efficient and resilient local supply base

Covid illustrated the risks of an over-reliance on global supply chains and ‘just in time’ supply models. Post-Covid, this risk translated into renewed local supply market development – a welcome change. This has been further reinforced by the implications of U.S. President Trump’s recent ‘Liberation Day’ trade tariff policies, some of which are now becoming felt.  These developments have had a real impact, with Australian Prime Minister Anthony Albanese including ‘Buy Australian’ as one of five key actions designed to mitigate the fallout of the rapidly changing world trade order.

This is great news for Australian organisations. It’s especially encouraging for those wanting to access Government business. However, this is a double-edged sword. Yes, you may have more opportunity, and procurement teams will likely simplify processes for local suppliers. But the environment will be no less competitive. Rather, we argue it could become more competitive. You’ll need expert collaborative and high EQ behaviours to succeed in an environment moving towards rapid, innovative and localised sourcing. To capitalise on this trend, ensure your business development, bidding and delivery teams are skilled to win and operate in this changed environment.

Trend 4 – Sustainability becoming mainstream

ESG (Environmental, Social and Governance) considerations have been a buyer focus for years. Despite buyers signalling its importance, it’s perplexing that we continue to see a gulf between ESG intent and action from some suppliers. Perhaps an undercurrent of ESG cynicism remains – an observation easily made given the continued politicisation of these issues. Nevertheless, we maintain smart suppliers and contractors will be rewarded if they help accelerate buyer ESG progress.

To capitalise on procurement trends around sustainability, ensure you’re taking steps to transform your organisation, including accessing specialist input if needed. One obvious example is implementing carbon emissions tracking to support Scope 3 emissions reporting.  A further benefit to an increased ESG focus is that younger workers (the leaders of tomorrow) have these concerns front of mind. Developing a strong ESG profile will also help differentiate you in the race to attract the best talent.

Trend 5 – Hiring for the future

The procurement profession has never seen itself as just a commercial gatekeeper or process/probity enforcer. In my three decades of experience, the profession has consistently argued that it takes multi-talented, strategic thinkers to deal with the myriad of technical, commercial, legal and social challenges required to deliver best value. Even with technological advances, there is no chance that procurement people will become less involved in future strategic buying decisions. We argue that this greater complexity will very likely see their involvement increase.

Ignoring relationship building or efforts to understand the underlying motivations of professional buyers will be to the supplier’s detriment. To capitalise on this procurement trend, consider skillsets that exist in your own organisation. Make sure your staff have the right skills and knowledge to have meaningful conversations with the very people who’ll be driving changes to sourcing processes within their own organisations.