No matter the size of an organisation, procurement is a crucial function underpinning the efficiency of day-to-day business operations. Without procurement professionals, companies would not be able to save money, maintain quality, enhance supplier relationships, or improve overall efficiency.
According to research, the Middle East’s procurement as-a-service market is expected to be valued $165.9m by 2027 – a significant increase from 2019’s total of $108.4m. This projected figure should not be a surprise considering the business landscape is expected to grow rapidly in the region.
High-profile events such as the FIFA World Cup 2022 in Qatar and Expo 2020 in the UAE have boosted the national economies while Saudi Arabia is working towards its Vision 2030 project as it aims to position itself as a global destination for trade, business and tourism. Yet despite the projected growth, the sector is facing unprecedented challenges in adapting to new opportunities and it is essential the right tools and services are being embraced to deliver positive results.
For instance, artificial intelligence (AI), is still a relatively new addition to the business agenda but has huge potential to transform many aspects of a company’s daily operations. According to research by Statista, more than 10 percent of global manufacturing businesses believe AI was a critical tool in 2022 and, by 2025, that figure is expected to rise to just over 35 percent.
In the short-term, AI can automate routine, administrative tasks that have typically taken up time including document generation, data entry and analysis, vendor negotiations and market trend monitoring.
With technology advancing, AI is expected to play key roles that will extend beyond simple automation. For example, when it comes to dynamic negotiations, AI can support more complex, data-driven negotiations including guiding contractual terms, intricating pricing structures, and tailoring agreements.
For strategic procurement, AI-driven predictive analytics will leverage comprehensive data analysis to predict market trends and potential supply chain disruptions, helping to recommend proactive adjustments to procurement strategies.
Furthermore, AI can also help provide holistic sustainability assessments, making better data-driven decisions that align procurement processes with business-wide CSR and environmental sustainability goals.
In this day and age, procurement cannot ignore the risks of losing important data, especially supply chain information. The number of cyber-attacks is increasing which can have devastating, expensive, and long-term ramifications for affected businesses, supply chains, and customers.
Therefore, procurement must work closely with IT departments to ensure robust and secure systems are in place at all times before it is too late. While AI has the potential to solve complex problems, it should not be regarded as a replacement for human procurement expertise.
Human involvement is crucial to ensuring AI systems do not infringe on ethical boundaries. As such, with procurement tasks becoming more complex, procurement leaders must take steps to not only recruit individuals with the right skillset and problem-solving abilities but also retain, invest and train staff to help them develop the required soft and technical skills.
Additionally, investing in technology is crucial as it can minimise the burden of administrative and repetitive tasks through automation and shift to value-adding tasks. While embracing AI, investing in IT security equipment, and having a skilled workforce are vital, procurement professionals should be aware of geopolitical events that could impact their operations such as potential production delays and increased costs, as well as economic fluctuations.
The UAE and Saudi Arabia are the fastest-growing markets in the Europe, Middle East and Africa region, which presents a number of opportunities for growth. However, procurement leaders must always be one step ahead of the curve and be ready to deal with challenges and disruptions that may occur. Otherwise, it could have an enormous impact on your organisation – both in the short and long-term.