Lack of digitization is curbing AI adoption and preventing a strategic focus, with procurement wasting 22% of their time dealing with paper-based or manual processes
REDWOOD CITY, Calif., Oct. 12, 2023 - New research from Ivalua has found more than half (53%) of procurement and supplier management processes have yet to be digitized. This is creating inefficiencies, with procurement teams estimating they are wasting more than a fifth (22%) of their time each year dealing with paper-based or manual processes.
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 is having a major impact on procurement's ability to work on strategic tasks, as a 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%).
Makes it almost impossible to attract and retain the best talent (41%).
"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," comments 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."
Procurement needs a solid data foundation to harness AI and emerging technologies
The study shows that 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 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%) – which can help to better manage their spend and suppliers.
Chatbots (63%) – which can help users make more informed purchasing decisions.
Blockchain technology (56%) – which can improve provenance when purchasing goods.
Robotic Process Automation (RPA) (55%) – which can reduce reporting time and assist with contract and category management.
"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," concludes 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'."
About the research
The survey was conducted by Sapio research in July 2023 on behalf of Ivalua. It is based on a survey of 850 procurement leaders in the UK (250), US (250), Germany (100), France (100), Sweden (50), Netherlands (50) and Italy (50).
About Ivalua
Ivalua is a leading provider of cloud-based Spend Management software. Our complete, unified platform empowers businesses to effectively manage all categories of spend and all suppliers, increasing profitability, improving ESG performance, lowering risk, and improving employee productivity. We are trusted by hundreds of the world's most admired brands and recognized as a global leader by renowned industry analysts. Learn more at www.ivalua.com. Follow us on LinkedIn and Twitter.
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SOURCE Ivalua
