GEP Outlook Report 2020
GEP Outlook Report 2020 is now available from GEP a global provider of strategy (consulting), software, and managed services (outsourcing) solutions to procurement and supply chain. In its eighth edition of its annual business trend report, GEP Outlook 2020: Essential Trends and Impacts in Business and Technology. With a focus on value creation and cost impacts, the report “provides guidance for C-suite leaders seeking to steer their enterprises through choppy waters to new levels of growth and innovation.”
We think an ‘interesting read’ for other Procurement professionals too, trying to see some clarity to thrive and compete in the new decade; the GEP Outlook 2020 report is available for download. It provides thoughts on pivotal global business and macroeconomic trends; the state of digital transformation and new value-driving technologies and seven key areas where leaders need to focus their awareness…
GEP Outlook Report EXECUTIVE SUMMARY Source: GEP Outlook Report 2020
"Most businesses enter 2020 with some performance tailwinds. Global GDP growth remains high, and China’s growth, though cooling, continues to be an engine of global performance. Energy costs remain relatively low. Some major markets, including the United States, may begin to make long-promised investments in infrastructure. However, the trade dispute between China and the United States remains a distraction for business leaders and is prompting many to slow down investment decisions. Similarly, the protracted separation of the United Kingdom from mainland Europe drags on, complicating the long-term business outlook. Environmental costs from climate change, such as increased frequency or intensity of hurricanes or forest fires, loom ominously.
The world, from the procurement lens, seems therefore bright but also somewhat uncertain. The outlook for disruptive technology, however, is crystal clear. Technology will be changing both the broader dynamics of business and industry and the way procurement operates in the future. New Technologies Automation of procurement activities will free up capacity and eliminate inefficiencies for routine, procedural work. Through a combination of secure, cloud-powered technology solutions and the introduction of artificial intelligence and automation, manual and time-consuming activities can be streamlined and improved. Leaders who implement these new technologies will be positioned for growth and agility. New technologies will allow procurement to give a digital life to old ideas. Should-cost models, an old concept in procurement, are now being integrated into technology systems. This can unlock new end-to-end value and substantially upgrade conversations with suppliers.
The New Horizon for Procurement
A thorough focus on the source-to-pay cycle has enabled many procurement leaders to efficiently manage SG&A costs at scale. Leaders are extending their reach and creating a new “budget-to-pay” paradigm. Instead of merely tracking cost reduction performance with finance, procurement will soon create a total awareness and tracking of P&L. As budgets are created, procurement will connect directly into a company’s financial planning and analysis processes. A new procurement ecosystem will emerge as companies increasingly depend upon suppliers for data risk management, innovation to drive revenue and broader industry alliances. This will require companies to modernize the way they do supplier segmentation, among other things. After years of outsourcing non-critical functional activities to low-cost country providers and other third-party solutions, companies are finding that risk management is an increasingly dispersed and problematic area. Procurement can play a major role in introducing technology and governance to bring this under control."
“In this increasingly tumultuous world, more will be asked from procurement,” the report said. “The longstanding focal areas of cost and efficiency won’t disappear but will become secondary to a digital and leadership platform that will be a vector for driving change. The next decade will likely be a dynamic and surprising one, led by the ‘New CPO’ and the beginning of the ‘strategic procurement’ function.” (Source: GEP Outlook Report 2020)
We think an ‘interesting read’ for other Procurement professionals too, trying to see some clarity to thrive and compete in the new decade; the GEP Outlook 2020 report is available for download. It provides thoughts on pivotal global business and macroeconomic trends; the state of digital transformation and new value-driving technologies and seven key areas where leaders need to focus their awareness…
GEP Outlook Report EXECUTIVE SUMMARY Source: GEP Outlook Report 2020
"Most businesses enter 2020 with some performance tailwinds. Global GDP growth remains high, and China’s growth, though cooling, continues to be an engine of global performance. Energy costs remain relatively low. Some major markets, including the United States, may begin to make long-promised investments in infrastructure. However, the trade dispute between China and the United States remains a distraction for business leaders and is prompting many to slow down investment decisions. Similarly, the protracted separation of the United Kingdom from mainland Europe drags on, complicating the long-term business outlook. Environmental costs from climate change, such as increased frequency or intensity of hurricanes or forest fires, loom ominously.
The world, from the procurement lens, seems therefore bright but also somewhat uncertain. The outlook for disruptive technology, however, is crystal clear. Technology will be changing both the broader dynamics of business and industry and the way procurement operates in the future. New Technologies Automation of procurement activities will free up capacity and eliminate inefficiencies for routine, procedural work. Through a combination of secure, cloud-powered technology solutions and the introduction of artificial intelligence and automation, manual and time-consuming activities can be streamlined and improved. Leaders who implement these new technologies will be positioned for growth and agility. New technologies will allow procurement to give a digital life to old ideas. Should-cost models, an old concept in procurement, are now being integrated into technology systems. This can unlock new end-to-end value and substantially upgrade conversations with suppliers.
The New Horizon for Procurement
A thorough focus on the source-to-pay cycle has enabled many procurement leaders to efficiently manage SG&A costs at scale. Leaders are extending their reach and creating a new “budget-to-pay” paradigm. Instead of merely tracking cost reduction performance with finance, procurement will soon create a total awareness and tracking of P&L. As budgets are created, procurement will connect directly into a company’s financial planning and analysis processes. A new procurement ecosystem will emerge as companies increasingly depend upon suppliers for data risk management, innovation to drive revenue and broader industry alliances. This will require companies to modernize the way they do supplier segmentation, among other things. After years of outsourcing non-critical functional activities to low-cost country providers and other third-party solutions, companies are finding that risk management is an increasingly dispersed and problematic area. Procurement can play a major role in introducing technology and governance to bring this under control."
“In this increasingly tumultuous world, more will be asked from procurement,” the report said. “The longstanding focal areas of cost and efficiency won’t disappear but will become secondary to a digital and leadership platform that will be a vector for driving change. The next decade will likely be a dynamic and surprising one, led by the ‘New CPO’ and the beginning of the ‘strategic procurement’ function.” (Source: GEP Outlook Report 2020)