Slow pace of digitisation costing procurement £1.9m a year
Written by Hannah McGrath
Less than half (45 per cent) of procurement processes have been digitised, with paper-based or manual processes costing UK businesses an average of £1.94 million per year, according to new research.
A Vanson Bourne survey of 200 procurement, supply chain and finance professionals for procurement firm Ivalua found that procurement teams are spending almost a third (31 per cent) of their time dealing with analogue processes, with 71 per cent of respondents believing that the rate of digitisation is holding them back from doing their jobs.
A large majority (85 per cent) of respondents also said that procurement in their businesses was less digitally mature compared to other departments, such as marketing, human resources or accounting.
When it came to supplier management, two thirds of businesses admitted they were still reliant on manual and paper based processes, while 45 per cent of purchasing is conducted non-digitally, followed by invoicing (41 per cent) and budget management (39 per cent).
The survey also found that a lack of digitisation limits the time spent on strategic tasks (77 per cent), prevents automation of low-value tasks like invoicing (70 per cent) and prevents teams from getting insights into spend and supplier management (67 per cent).
Overall, the vast majority (97 per cent) of businesses are starting to invest in technology to digitise procurement, with data analytics (67 per cent), cloud-based platforms (62 per cent), artificial intelligence (40 per cent) and digital assistants (40 per cent) being the areas seeing the most focus.
Alex Saric, chief marketing officer at Ivalua said: “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.
“Whilst 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.”