B2B Payments

Tech Falls Short Of Procurement’s Expectations

Procurement’s digital transformation isn’t without its hiccups. Organizations are taking baby steps into eProcurement, digitizing supplier relationship portals, purchase orders, invoice management and payments, though not all businesses say their eProcurement efforts have paid off as much as they could, and should, be.

The largest barriers to effective procurement digitization are familiar challenges. According to recent research commissioned by Wax Digital and conducted by Sapio Research, procurement professionals are making significant progress in eProcurement adoption, but, on average, adopters use only about half their systems’ full potential.

Daniel Ball, Wax Digital director, noted that the demand to digitize procurement processes is there, but technology hasn’t yet been able to fulfill procurement executives’ needs.

“These research findings show that there is a real appetite to improve the performance and effectiveness of procurement through technology, and there are many strong solutions on the market to help them do this,” he said in a statement, according to Bdaily. “However, if the wrong technology choice is made or the conditions for implementation are not carefully planned, organizations may only achieve some of the potential benefits.”

A survey of 200 U.K. senior procurement professionals found the largest “gap” in being able to achieve the full potential benefits of an eProcurement system is personal productivity, affecting 37 percent of survey respondents. Researchers noted that this could suggest eProcurement solutions providers have not been able to provide fully intuitive platforms and services for their end users.

Nearly one-third of professionals also said they are unable to achieve more accurate processes, a surprising concern for eProcurement technology, which vows greater accuracy and automation in data management. Other top issues for eProcurement users include low impact of customer satisfaction, limited cost savings, low impact of spend reduction and a lack of improved spend visibility.

Researchers categorized these hurdles, identifying five key issues: complexity, budget, analytics, IT support and reluctance to change. The topics touch on some common problems, not only when adopting eProcurement technology, but when enhancing and updating any enterprise system.

While these points of friction suggest solutions providers must do more to meet organizations’ expectations for digital procurement, companies themselves must take the initiative to address these challenges.

Separate research, recently released from Procurious and Michael Page in the U.K., suggests that tackling these points of friction will be imperative for the future of procurement. Not only is a technological shift occurring, but analysts have pointed to a paradigm shift in the role of procurement professionals.

In the Procurious report, a survey of 590 procurement and supply chain professionals examined how these workers expect their roles to change in the coming decades. Their top responses signal changes driven by how procurement operates as part of the broader enterprise. Nearly one-quarter said procurement teams will evolve into “an influential group of commercial leaders” by 2030, while 51 percent said the procurement function will turn into “an agile group of strategic advisors.”

According to the report, significant portions of these professionals’ jobs are described as “tactical” rather than strategic. While technology is clearly making inroads, the biggest impacts will be from how these professionals are able to take on an elevated role for their organizations not from how technology effects the space (only 9 percent of survey respondents said they believe procurement will be fully automated by 2030).

Indeed, Procurious’ report found technological advances to be the largest opportunity for procurement, and the failure to keep pace with technological advances as the industry’s largest threat.

Yet, as procurement teams embrace more technology, the struggle to extract the most from those tools’ potential could hamper these professionals’ ability to evolve. With such significant portions of these workers’ jobs categorized as “tactical,” they risk being replaced by technology, instead of wielding technology to meet rising expectations.

“Procurement professionals clearly know what stands in the way of them extracting the most from eProcurement,” Ball added. “Now they need to focus on how to successfully minimize these barriers and increase their project outcomes.”

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