Ensuring procurement procedures are up to date is a surefire way of ensuring success according to new research from Vertice.
The SaaS and cloud spend optimisation platform, Vertice, has released its Procurement Impact Report, in which it surveyed 300 global procurement leaders to rate their business’ purchasing processes as well as their business performance across eight key metrics. It revealed a clear correlation between an organisation’s procurement maturity and the business’ overall commercial performance.
Eldar Tuvey, CEO and founder of Vertice
Eldar Tuvey, CEO and founder of Vertice said: “Procurement is an important catalyst to business innovation; the secret weapon that often goes unnoticed.
“Quick, intelligent, integrated processes can equip teams faster, with safe and compliant tools, accelerating overall project timelines. But most procurement departments have been unable to mature their outdated, manual processes, throttling the business’ progress and reinforcing an unnecessary negative perception.”
Who is keeping up to date?
Looking at metrics ranging from cost control and budgeting, to the ability to maintain compliance, the report revealed only 18 per cent have optimised their procurement processes. Nonetheless, those that have, revealed they can innovate faster, ship new products sooner, maintain compliance easier, and control budgets better. In fact, they have shown to be 32 per cent more capable of implementing new initiatives and 29 per cent faster in bringing new products and services to market.
Meanwhile, the remaining 82 per cent of businesses – whose procurement teams rely instead on decentralised, reactive and manual procurement processes – all perform worse. This problem is especially pronounced in the US. While in the UK 67 per cent of businesses are in advanced stages of procurement maturity, with more reliance on automation and AI, in the US, 44 per cent of firms show the lowest maturity levels.
Benefits of procurement
Among other benefits, Vertice’s research found that businesses with the most advanced procurement processes enjoy:
27 per cent jump in efficiency and ease of collaboration.
22 per cent improvement in budget control.
20 per cent increase in a company’s ability to maintain IT and security compliance.
What’s holding firms back?
Despite the significant benefits that procurement maturity brings, many leaders are actively prevented from building high-performing procurement functions. Worryingly, 37 per cent of respondents say that procurement is not seen as a strategic priority and 35 per cent say their organisation is not willing to invest in the skills to tackle the issue.
Tuvey added: “Modern procurement teams’ roles are increasingly broad and complex. And in fast-growing or rapidly-changing businesses, procurement processes aren’t always keeping up – meaning procurement teams are finding themselves filling in the gaps manually. It’s a step back for procurement when the business is trying to make leaps forward.”
One solution to this problem has been provided by Vertice in its Intelligent Workflows offering. The procurement orchestration tool is built to simplify and accelerate purchasing processes and ease the manual burden on busy procurement teams.
“Intelligent Workflows is the boost these teams need. Our new procurement orchestration tool brings automation and intelligence to the purchasing process, by eliminating manual approval routing and re-routing, anticipating bottlenecks, and reducing the daily workload for procurement teams – all while improving control and speed of outcomes,” Tuvey concludes.
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