Hope for the Best, Plan for the Worst
At the Atlanta Spend Management Day yesterday, Kurt Albertson, Director of Advisory Services with The Hackett Group, examined past predictions and gave some new insight into 2010 predictions and beyond.
According to Hackett’s forecasts from July 2008, the 2009 economy was going to create the “perfect storm.” It was a time to secure up supply, highlight difficult-to-find savings, find new talent, and educate existing talent. But when asked who increased their procurement staff, only three hands went up. Turns out, very few organizations had the opportunity to do so. Talent management quickly fell to the bottom of the chart as other issues rose to the top, but will be headed back up in the next year.
Other predictions for 2009 also turned out to be a little off. For example, in 2008-2009 the supply risk focus was supposed to be on bankrupt suppliers. In reality, how many struggled with bankrupt suppliers this year? No hands. Turns out, regulatory issues with the new administration, industry-specific issues, and participating in sustainability (and to what extent), were all big issues for 2009. And the same issues will most likely continue for 2010. But be sure to throw in a little swine flu risk and inflationary concerns, just for kicks.
As for other concerns, are jobs coming back in 2011? No hands. Are budgets coming back in 2011? No hands again. I started to wonder if our crowd was spot-on or just really pessimistic. Upon further reflection, I would actually describe the mood as realistic. No one was solemn or downtrodden regarding the economic conditions for 2010. Nor was anyone overly joyful and optimistic that the economy was good-to-go for the upcoming year. And it turns out, according to The Hackett group, that our crowd was somewhat accurate. Budgets will come back, but slowly. And jobs will come back, too. But again slowly and in different forms.
While no one knows exactly what 2010-11 will bring, we can all hope for the best and plan for the worst. Be sure that your contingency plan covers the worst possibly case scenario so that you’ll be prepared for anything that the tapering economic storm may throw your way.
For more specific tips, be sure to check out Justin’s latest post on the seven questions Hackett suggests you ask as we head into 2010.
Caroline Robinson has been in the spend management industry for four years and currently manages Ariba’s external webinar programs, focusing on thought-leadership and best practices.
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