CFOs Say Procurement System Modernization Avoids Supply Chain Failures

Download the PYMNTS and Corcentric March 2023 Playbook, Digital Payments: Modernizing Procurement Processes

Businesses learned two critical lessons from the pandemic-related supply chain disruptions: First, they need tighter control of key payment processes, particularly procurement, to ride out the next economic disruption, and second, digital technology is necessary to achieve and sustain this control. Businesses across the board have upped investments in technologies to support these processes and many of those that have been slow to invest now plan to increase spending on these platforms. 42%: Share of manufacturers already investing in digital procurement technologies

These businesses expect their investments to pay off by ensuring that these systems improve the efficiency of their processes for purchasing goods and services during normal business conditions and enabling quicker responses to future disruptions.

Digital Payments: Modernizing Procurement Processes,” a PYMNTS and Corcentric collaboration, is based on a survey of 500 CFOs from healthcare companies, finance and insurance businesses, retailers and manufacturers that sought to discover their payments system pain points — and how they are investing in digital payments technology to solve them.

Some of our key findings include the following:

Retail and manufacturing companies are investing in digital technology to improve procurement operations and limit business disruptions caused by future supply chain breakdowns.

Retailers and manufacturers depend on a steady flow of products for their shelves and raw materials to make goods. 66%: Portion of retail CFOs saying modernizing business processes is the top reason to invest in digital procurement technologiesThat may explain why 31% of retailers are investing in procurement systems and 53% plan to do so. Among manufacturers, 42% are already investing in upgrading their procurement technology, with another 44% planning to investment in this area.

Although finance and insurance firms and healthcare companies have been slow to invest in upgrades to procurement technology, this appears to be changing. We found that significant shares of firms in both industries plan to invest in these upgrades in the future.

Companies are focusing their digital procurement technology investments primarily on modernizing operations and expanding business.

PYMNTS found that the top industries that are investing in digital procurement technologies to modernize their business processes are the retail and manufacturing industries. On the other hand, healthcare companies and finance and insurance businesses are placing a greater emphasis on making these investments to expand their businesses.

Companies investing in digital procurement technology are most likely to prioritize improving their supply chain and logistics management functions.21%: Share of healthcare CFOs saying cost reduction is the top reason for investing in digital procurement technologies

By far, logistics and supply chain functions are the areas within procurement that are getting the most commitment from manufacturers and retailers. Healthcare companies and finance and insurance businesses are also making moves to upgrade these functions.

Many are focusing on improving the functions for supplier data, such as real-time inventory information and supply chain analytics. These supplier data systems can help businesses improve their planning and forecasting while providing them with the data needed to make adjustments if there is a surge in demand or a shortage.

Primarily driven by the experiences from the early months of the pandemic, businesses in these four industries are shifting the focus of their digital payments technology investments in the hopes of being better prepared if the global economy falters once again.

To learn more about the digital payments technology investments businesses are prioritizing, download the report.