With two-thirds of businesses still reliant on manual and paper-based processes, new research has revealed that inefficient procurement processes are costing UK businesses almost £2m a year.
Supply chain and finance professionals are spending almost a third (31%) of their time dealing with inefficient paper-based or manual procurement processes, which is costing UK businesses on average £1.94m annually and limiting procurement teams’ ability to deliver more strategic value.
At the same time, two-thirds (66%) of businesses admitted they were still reliant on such processes as part of their procurement or supplier management function.
The research, conducted by Vanson Bourne on behalf of Ivalua, found that 71% of respondents believed the rate of digitisation in procurement is low.
Nearly two-thirds (64%) said this lack of digitisation is holding them back from doing their jobs. Overall, 85% of respondents view the procurement and supplier management function as less digitally mature compared to other departments, such as marketing, human resources or accounting.
Technology investment failing to drive digitisation
Encouragingly, the majority (97%) of businesses are investing in technology to digitise procurement, with data analytics (67%), cloud-based platforms (62%), artificial intelligence (40%) and digital assistants (40%) seeing the most focus.
Despite this investment, businesses have so far digitised less than half (45%) of procurement processes. Purchasing (45%), invoicing (41%) and budget management (39%) are the most digitised processes to date.
It would seem that full digital transformation remains a long way off for most procurement and supply chain organisations.
The findings also revealed that the lack of digitisation is having a wider impact:
- 77% of respondents say it is limiting the time spent on strategic tasks
- 70% of respondents say it is limiting their ability to automate low-value tasks
- 67% of respondents say it is limiting their ability to gain insights into spend and supplier management