We’ve read through some of the best analyst reports and surveys to bring you this procurement fact file containing some of the most interesting findings, statistics and quotes.

Procurement

Indirect Spend represents 20-40% of a company’s revenues.

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source: (1 page infographic) AccentureOperations , High Performance Procurement (2015)

TOP 4 PRIORITIES FOR CPO’S

In Deloitte’s Global CPO Survey 2016 the top 4 priorities for CPO’s were found to be cost reduction, new product development, increasing cash flow and organic expansion.

  • Cost Reduction 74%
  • New Product Development 46%
  • Increasing cash flow 45%
  • Organic expansion 43%

CPO’s will continue their focus on generating value through traditional levers over the next 12 months:

  • Consolidating spend 43%
  • Increasing level of supplier collaboration 39%
  • Increasing competition 32%
  • Restructuring existing relationships 31%
  • Reducing total life cycle/ownership costs 30%
  • Specification improvement 29%
  • Restructuring the supply base 25%
  • Reducing transactions costs 21%
  • Reducing demand 17%
  • Outsourcing of non-core procurement activities 14%

Areas most likely to receive investment over the next 12 months

  • Spend analysis 38%
  • Contract management 37%
  • eSourcing 30%
  • Supplier relationship management 29%
  • Requisition to pay 24%
  • Catalogues and content 20%
  • Supplier risk and management 17%
  • Procurement performance management 13%
  • Supplier information management 11%
  • Electronic data interfaces 11%
  • Electronic payment 10%
  • P-card 8%
  • Innovation management 6%
  • Invoice routing and approval 6%
  • Direct procurement management 4%
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ORGANIZATIONS’ TOP PROCUREMENT IMPROVEMENT GOAL

30% Cost control and supplier negotiations
20% Spend visibility
15% Integration of AP within the procurement process
14% Contract compliance
13% Data accuracy
8% Off-contract spend reduction

CHALLENGES TO ORGANIZATIONS’ SUPPLIER RELATIONSHIPS

31% Poor supplier dispute / query response times
33% Late payments
36% Problems arising from poor supplier data management

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  • Lengthy approval cycles 62%
  • Manual routing of invoices 57%
  • Missing information on invoices 55%
  • Lost invoices 46%
  • Large number of exceptions 43%
  • Decentralized invoice receipt 38%

Leading causes of missed early payment discounts

Gartner Research estimates that companies typically spend up to $1,000 per supplier each year in supplier management costs.

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source: (p1) Paystreams, Supplier Network Management (2014)

  • Staff/ Talent constraints 57%
  • Lack of engagement with the business 35%
  • Budget constraints 31%
  • Technology gaps 29%
  • Challenges in aligning processes and systems 26%

2014

  • Savings 43%
  • Processes 36%
  • Compliance 32%
  • Innovation 29%

2011

  • Savings 54%
  • Processes 46%
  • Compliance 23%
  • Innovation 19%

Supply chain and logistics constitute almost £3 trillion in “value at stake: the combination of increased costs that [as a result of digital innovations] will migrate among companies and industries from 2013 to 2022.

source: (p3) Accenture Strategy , The Digital Supply Network (2014)

Maverick Spend

MAVERICK SPEND THE BIGGEST CHALLENGE RELATING TO INDIRECT PROCUREMENT

71 per cent of our respondents regarded maverick spend by non-procurement professionals as the biggest challenge relating to indirect procurement.

%

Said Maverick Spend the Biggest Challenge

%

Think training employees could reduce maverick spend

Digitization of Procurement

The top three benefits shared by organization suppliers in collaborating on a supplier network

  • Increased sales opportunities 31%
  • Improved visibility into buying organization’s processes 28%
  • Accelerated orderto-cash cycle 26%

Moving Beyond the Traditions of eProcurement, demonstrates that of the organizations using supplier networks, 76% indicated that identifying new suppliers and market opportunities is the main reason for their use

source: (p4) Aberdeen Group, Supplier Networks v2.0 (2012)

Does your organization utilize an eProcurement solution?

34 % YES
66 %  NO

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CPO’s Investments in disruptive technology (2015):

2014

  • cloud based computing 45%
  • Mobile Technologies 42%
  • Social Media 16%

2015

  • cloud based computing 26%
  • Mobile Technologies 23%
  • Social Media 6%

40% [of respondents] Procurement has a clear digital strategy. Of these 26% Procurement has a clear digital strategy aligned to the needs of the wider organisation and 14% Procurement has a clear digital strategy, but this is not aligned to wider organisational needs.

source: (p15) Deloitte, The Deloitte Global CPO Survey 2016

%

does not have clear digital strategy

%

does have clear digital strategy

ORGANIZATIONS’ P2P PROCESS INTEGRATION

  • Common leadership, but separate functions with some shared functions 33%
  • They are completely separate 31%
  • Completely integrated 19%
  • Shared leadership and metrics, but emerging integration 17%
  • organizations using invoice workflow automation 41%
  • using eInvoicing 22%
  • using checks for over 50 percent of their payments 63%

41 percent of organizations are using invoice workflow automation

22 percent of organizations are using eInvoicing

63 percent of organizations are using checks for over 50 percent of their payments

TOP FACTORS DRIVING INVOICE AUTOMATION ADOPTION

  • Reduction in labor / processing costs 18%
  • Fewer lost or missing invoices 15%
  • Quicker approval cycles 14%
  • Better visibility across the transaction lifecycle 11%
  • Reduction in exceptions / discrepancies 10%
  • Increased on-time payments 10%
  • Increased ability to capture discounts 10%
  • Fewer supplier inquiries 6%
  • Improved vendor satisfaction 5%

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