Over half of supplier management processes still not digitized

New research from Ivalua shows more than half (53 percent) of procurement and supplier management processes have yet to be digitized.

This is creating inefficiencies, with procurement teams estimating they are wasting 22 percent of their time each year dealing with paper-based or manual processes.

The study reveals that 50 percent of procurement leaders think that the rate of digitization within procurement is too slow, while 47 percent say existing procurement systems are not flexible enough to keep up with constant change and deal with market and economic uncertainty.

There's a clear impact on the operation of businesses from this lack of digital transformation, 47 percent say a lack of digitization limits organizations' ability to make quick, informed decisions regarding their suppliers. 46 percent say it prevents organizations from tackling rising inflation and spiraling costs, and 41 percent say it makes it almost impossible to attract and retain the best talent.

"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," says 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."

On a more positive note, 85 percent of organizations say they have implemented or plan to implement data analytics within the procurement and supplier management function. A further 63 percent say they have already implemented or plan to implement AI or machine learning technology.

However, 70 percent of respondents say they are not 'very confident' in the quality and accessibility of their supplier data when it comes to supporting effective procurement.

"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," adds 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'."

You can find out more on the Ivalua site.

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