Pulse of Procurement 2014: An Overview of Procurement Technology Trends (Part I) for 2014
In post 1 on Pulse of Procurement 2014 series we discussed the Pain Areas for 2014 and the future expectations of Procurement Execs followed by a discussion of the current state of Procurement in post 2 and post 3. In our latest post we will explore the Procurement Technology trends for 2014.
Looking at the procurement technology interest by major procurement technology category, eSourcing displays the highest increase in a two year period, from 2012 to 2014, with 76 percent either already using the technology or planning to invest gaining 11 points. Another noticeable increase is observed for Contract Management and Spend Analysis, the increase being of 7points each in the two year period from 2014. With that said, both Spend Analysis and Contract Management appears to be approaching ubiquity with only 10 percent of organizations expressing zero interest in investing.
As for the current state of the industry and technology investment interest, it has been observed that 32 percent of procurement executives stated plans to invest in Supplier Management technology while Procurement Management’ that consists of cost saving documentation, validation and alignment with corporate financial metrics and project and process management for strategic sourcing and various other procurement initiative, leads for an overall interest of 33 percent procurement execs who look forward to investing in these types of technology soon.
Spend Analysis is the first stop for technology investment on procurement technology road map. Mid-maturity investments typically include P2P and Contract Manage net followed by investments in eSourcing, supplier management and procurement management.
It was further observed that Companies falling in the top 2 performance tiers for cost savings are 2.5 times more likely to be using an eSourcing solution viz-a-viz the companies falling in low-saving tiers. Moreover, high saving companies are 1.5 times more likely to be using contract management solution than low saving companies.
It was also noticed that high compliance companies are twice more likely to be using a P2P solution viz-a-viz low compliance companies. Moreover, High Spend Under Management (SUM) companies are 1.6 times more likely to be using P2P solution viz-a-viz low High Spend Under Management (SUM) Companies.
The study also reveals that there is still a huge gap between the expectations and procurement technology resources that the procurement functions of the organizations possess. While over 60% of organizations use ERP module or homegrown technology, 60% want to have procurement suites that are well integrated.
In our next blog, we will discuss more of the Procurement Technology Trends observed for 2014. So stay tuned for more insights…
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