WALLDORF, Germany, Feb. 23, 2021 /PRNewswire/ -- Only 23% of
procurement and supply chain executives can gain a clear view of
overall spend automatically, in real time, according to Agile
Procurement Insights Research conducted by SAP SE (NYSE: SAP) in
collaboration with Oxford Economics. Furthermore, 49% still
manually analyze data to inform decision-making.
The research is built on a survey of 1,000 procurement and
supply chain executives responsible for direct and indirect goods,
services and external workforce spend. It was designed to help
understand procurement's influence on an organization, the current
state of supplier collaboration and the impact of technology and
process digitalization in the procurement function.
A subset of surveyed executives — the leaders — are realizing
stronger business results. Leaders are investing in technology and
process digitalization to help anticipate the unexpected, fueling
business agility and resilience, and elevating the strategic value
of procurement to the business.
The research is distilled into five reports that examine key
areas of spend management and discuss what leaders do that set them
apart.
Leaders Outshine the Rest
"Leaders Aim Higher:
Elevating Procurement's Strategic Value to the Business" focuses on
the leaders, around 10% of executives who have made greater
investments in procurement digital transformation and are realizing
greater benefits. To qualify as a leader, companies had to meet
criteria in four areas: high degree of process automation, frequent
use of data to inform decision-making, use of technology to
influence the business and fewer challenges in managing procurement
than other respondents. They achieve better results compared with
other respondents in operational efficiency, supplier performance,
compliance, risk management and cost reduction, but even leaders
have room to improve.
Digitalized Procurement Pays Off
"Procurement-Powered
Performance: How Digital Transformation Is Elevating Procurement"
shows that while organizations are reaping benefits from
digitalizing procurement, challenges remain. For example, 38% of
executives surveyed said most or all of their procurement processes
are still manual. Just 54% said their procurement technologies
enable them to make decisions that are data-driven. According to
the report, companies that have embraced data and analytics, tapped
into the power of AI and embraced new technologies are realizing
better results.
Supplier Risk Management Shows Progress, But Ample Room for
Improvement
"Getting Closer to See Further: Procurement Can
Embrace Advanced Analytics to Predict and Manage Supplier Risk"
reveals widespread vulnerabilities in supplier risk management,
including poor visibility and overreliance on too few suppliers.
Only 49% of executives said they regularly refresh risk mitigation
plans to address potential disruptions, and a mere 32% said their
supplier risk management is highly effective. Organizations
underutilize advanced analytics and need to take bolder steps to
help increase visibility into supplier performance and make greater
use of third-party data to help anticipate and mitigate potential
disruptions, the report said.
Supplier Collaboration Key to Direct Spend
"Close
Collaboration That Goes Beyond Transactions: Direct Spend Leaders
Engage with Essential Suppliers to Improve Performance" illustrates
that direct spend leaders who embrace automation and treat
suppliers as partners drive superior business results. For
instance, 92% of leaders said they use a network to collaborate
with suppliers, compared with 69% of other respondents.
Additionally, 76% of leaders said they provide critical suppliers
visibility into future demand for their goods, compared with 44% of
other respondents.
Significantly Undermanaged Spend Category: External
Workforce
"Agility Isn't Always on the Payroll: Gain Full
Visibility of Your External Workforce to Help You Drive Better
Business Outcomes" highlights that just 35% of executives said they
use technology to help manage their contingent workforce and 70%
said they use technology for services procurement. Given the
external workforce is a large, strategic spend category fueling
business agility, broader adoption of vendor management systems can
help organizations use preferred suppliers, support various pricing
models, enforce negotiated rates, track work quality and equipment
usage, and manage security access.
"Business leaders increasingly understand the value of
procurement goes beyond cost reduction," said John Wookey, president, SAP Intelligent Spend
and Business Network. "Procurement is central to productivity and
innovation, but its potential is only fully realized through
digitalizing end-to-end spend management processes on a single
platform in the cloud. Putting organizations in a position to align
spend decisions to business strategy in today's networked economy —
this is what intelligent spend management is all about."
For information on how to accelerate procurement digital
transformation and to download the reports, visit
www.ariba.com/roadtoready.
Visit the SAP News Center. Follow SAP on Twitter at
@SAPNews.
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