Relying on paper, signatures, and seals harms procurement as well as business success, and procurement professionals must digitalize to meet modern demands.
In the past few years, economic and social events, such as the pandemic and Brexit, have put organizations’ operational resilience to the test, with supply chains facing significant challenges.
A series of challenges has particularly affected procurement, including production delays, logistical disruptions, inflation, and exchange rate fluctuations. This volatile climate has driven organizations to search for solutions that can help them navigate these turbulent times, and digital procurement systems are providing exactly that.
Research shows that organizations are making slow progress in the digitalization process. A study conducted by Probrand reveals that less than 20% of organizations have achieved full digitalization, and even a third of them have not yet started the digitalization process. Why is this the case?
Mistakes in Procurement
Probrand’s research indicates that due to the lack of digitalization in procurement processes, the majority of organizations (over 60%) are wasting up to one day per week on research for purchases. This includes comparing product specifications, checking prices, and stock availability.
Another significant time-consuming task for procurement professionals is collaborating with suppliers. Two-thirds of them spend a considerable amount of time on phone calls and email correspondence.
Furthermore, procurement professionals face the burden of tasks including tracking orders, checking stock, processing orders, and managing returns and errors. Even seemingly simple tasks like creating a purchase order take more than three days for one-fifth of them.
Delaying digitalization will undoubtedly pose challenges for businesses. The lack of access to real-time data hinders buyers from making informed purchases at the right time and at the best price. As a result, organizations have less time to build strategic relationships with suppliers who can better meet their organization’s needs.
Why Haven’t Procurement Professionals Embraced Digitalization?
Probrand’s research shows budget constraints and management support as key obstacles to digitalization. Considering that digitalizing procurement processes typically yield significant return on investment and better control over purchasing and sourcing operations, addressing these issues is crucial.
What the research undeniably showed is that there is a desire for digitalization among procurement professionals. Over 70% of them express their intention to pursue digital transformation and are actively trying to implement certain features on their own.
It’s evident that the majority of organizations will digitalize in the near future. This should be a concern for those organizations that are not taking steps in that direction.
The lack of digitalization will also impact an organization’s ability to attract and retain young talent in procurement, which will undoubtedly have long-term effects on workforce quality and business outcomes.
Furthermore, in times of global uncertainty and constant disruptions in supply chains, organizations will need tools to manage their suppliers. By digitalizing procurement processes, procurement teams can better manage risk by making informed purchasing decisions.
Failure to successfully implement digitalization will ultimately harm the business, resulting in higher costs, slower operations, employee dissatisfaction, and a competitive disadvantage.
Stay Ahead of the Curve
It’s concerning that nearly a quarter of organizations have yet to embrace digitalization, especially considering the potential for cost-effective implementation.
No barrier to digitalizing procurement processes is insurmountable, yet a large number of organizations have not yet achieved it. Those who have a clear vision and are actively planning will reach their goals faster, while enabling their organization to operate more efficiently throughout the transition process.
Investing in solutions like Ensolva can be a crucial step towards successful procurement digitalization. Take advantage of the benefits offered by modern technologies and integrated systems to enhance efficiency, make smarter decisions, and stay ahead of the competition. Ensolva is your solution for transforming procurement in the digital age.