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Procurement failures costing UK businesses millions

(Image credit: Image source: Shutterstock/violetkaipa)

Plenty of procurement is still being conducted with the old-fashioned pen and paper. The process is slow and inefficient, which is why organisations are losing tons of money.

This is according to global spend management cloud solutions firm Ivalua, whose report claims that almost a third (31 per cent) of procurement, supply chain and finance pros are handling things the old fashioned way.

On average, businesses lose $2.36 million every year, while their procurement teams can’t deliver bonus strategic value. Two thirds of the report’s respondents say they still rely on these processes as part of their procurement or supplier management function.

For almost three quarters of the respondents, the procurement process needs more digital transformation. For two thirds, it’s making their jobs more difficult. Overall, almost everyone agrees that procurement is far less digitised, compared to other departments like human resources or marketing.

“Against the backdrop of an increasingly dynamic market, featuring Brexit and growing trade friction between the US and China, the role of procurement is becoming increasingly important,” comments Alex Saric, smart procurement expert, Ivalua.

“Procurement is perfectly placed to help manage this growing risk landscape, support innovation and create sustainable cost savings. However, the lack of digitisation is holding procurement teams back. Whilst functions such as accounting and marketing have embraced digitisation and made great strides over time, procurement at most organisations has remained a digital laggard, leaving many businesses unprepared to face today’s rapidly shifting business landscape.”

Most businesses understand the problem and are looking to invest into technology which can alleviate the pain point. Data analytics, cloud-based platforms, AI and digital assistants are most sought-after technologies.