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Adoption of Digital Procurement Has a Long Way to Go

May 2, 2019
Digital transformation often fails because of an inability to onboard suppliers.

When asked the level of their digital maturity, most organizations are significantly overestimating their maturity. Only 16% of businesses had an advanced level of digital maturity in procurement, giving them a source of competitive advantage over rivals, though 65% assessed themselves as advanced.

These conclusions were based on a study conducted by Forrester Consulting for Ivalua.

“Procurement leaders have the opportunity to deliver a true competitive advantage for their organizations,” said David Khuat-Duy,  CEO of Ivalua. “Digital transformation is critical to success, but requires a realistic assessment of current maturity, a clear vision for each stage of the journey and the right technology.”

Obstacles differ significantly based on the stage of transformation, indicating a need to assess technology based on both current needs and future ones. Early in the journey, lack of budget and executive support are primary obstacles, while more advanced organizations struggled with poor integration across their source-to-pay systems. As a result, advanced organizations were most likely (60%) to be planning to implement a full ePurchasing suite.

The study revealed that organizations frequently make poor choices with regards to technology, which impedes digital transformation. Over three-quarters (82%) switched or are considering switching technology providers. The primary reasons for switching are poor levels of supplier onboarding (30%) and poor user adoption (27%). Onboarding suppliers quickly is critical for any technology adoption, yet just 17% of organizations are able to onboard new suppliers in less than one month, with 59% taking 1-3 months per supplier.

“To ensure that technology empowers procurement transformation, rather than constrains it, leaders must consider their current and future requirements when evaluating options,” added David Khuat-Duy. “Doing so ensures a steady progression along their journey and the ability to gain an edge on competitors.”

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