New research from Ivalua found more than half (53%) of procurement and supplier management processes have yet to be digitized, wasting more than a fifth (22%) of their time each year dealing with paper-based or manual processes.
“Organizations are wasting millions in staff time every year on manual processes. This is bogging teams down in low-value tasks, limiting their ability to focus on more strategic priorities,” says Alex Saric, smart procurement expert at Ivalua. “Given inflation remains high and the economic outlook uncertain, it’s never been more important to digitize procurement processes, and free up teams to tackle these challenges.”
- The study reveals that half of procurement leaders (50%) think that the rate of digitization within procurement is too slow, while 47% say existing procurement systems are not flexible enough to keep up with constant change and deal with market and economic uncertainty.
- This lack of digitization limits organizations’ ability to make quick, informed decisions regarding their suppliers (47%); prevents organizations from tackling rising inflation and spiraling costs (46%); and makes it almost impossible to attract and retain the best talent (41%).
- 85% of organizations have implemented or plan to implement data analytics within the procurement and supplier management function. A further 63% say they have already implemented or plan to implement artificial intelligence (AI) or machine learning technology.
- However, just 30% of respondents say they are “very confident” in the quality and accessibility of their supplier data when it comes to supporting effective procurement.
- Other areas organizations have implemented or plan to implement to transform their procurement and supplier management function include full end-to-end source-to-pay platforms (72%); chatbots (63%); blockchain technology (56%); and robotic process automation (RPA) (55%).
“AI can be the catalyst for procurement transformation, with clear use cases for processing data, driving automation, creating actionable insights, and informing strategies to augment procurement and supply chain operations,” says Saric. “But poor-quality data will limit the insights produced by AI. Organizations need to walk before they can run, and this starts with digitization. This means taking a cloud-based approach to procurement that builds a solid data foundation that will inform decision making and reduce the risk of ‘garbage in, garbage out’.”