Research from Ivalua, a leading provider of global spend management cloud solutions, has shown that procurement, supply chain and finance professionals are spending almost a third (31%) of their time dealing with inefficient paper-based or manual procurement processes, which is costing UK businesses on average £1.94 million annually and limiting procurement teams’ ability to deliver more strategic value. At the same time, two-thirds (66%) of businesses admitted they were still reliant on such processes as part of their procurement or supplier management function.
The research, conducted by Vanson Bourne on behalf of Ivalua, found that 71% of respondents believed the rate of digitisation in procurement is low. Nearly two-thirds (64%) said this lack of digitisation is holding them back from doing their jobs. Overall, 85% of respondents view the procurement and supplier management function as less digitally mature compared to other departments, such as marketing, human resources or accounting.
“Against the backdrop of an increasingly dynamic market, featuring Brexit and growing trade friction between the US and China, the role of procurement is becoming increasingly important,” commented Alex Saric, Smart Procurement Expert, Ivalua. “Procurement is perfectly placed to help manage this growing risk landscape, support innovation and create sustainable cost savings. However, the lack of digitisation is holding procurement teams back. While functions such as accounting and marketing have embraced digitisation and made great strides over time, procurement at most organisations has remained a digital laggard, leaving many businesses unprepared to face today’s rapidly shifting business landscape.”
Technology investment failing to drive digitisation
Encouragingly, the majority (97%) of businesses are investing in technology to digitise procurement, with data analytics (67%), cloud-based platforms (62%), Artificial Intelligence (40%) and digital assistants (40%) the areas seeing the most focus. Despite this investment, businesses have so far digitised less than half (45%) of procurement processes. Purchasing (45%), invoicing (41%) and budget management (39%) are the most digitised processes to date. Full Digital Transformation remains a long way off for most procurement and supply chain organisations.
The findings also revealed that the lack of digitisation is having a wider impact:
- 77% of respondents say it is limiting the time spent on strategic tasks
- 70% of respondents say it is limiting their ability to automate low-value tasks
- 67% of respondents say it is limiting their ability to gain insights into spend and supplier management
“The lack of digitisation is creating serious problems for UK businesses, preventing teams from focusing efforts on more strategic activities and maximising the value of their spend and supply chains. For businesses serious about creating a competitive advantage and unlocking the strategic benefits procurement holds, much more needs to be done to invest in the right technology to enable digitisation. This will ultimately make procurement smarter and more flexible, something that’s vital to thrive in today’s fierce global market,” said Saric.Click below to share this article