Procurement’s digital maturity lags behind perceived progress: study
Ivalua has announced the findings of a worldwide survey of supply chain, procurement and finance business leaders, on the status of their digital transformations, the obstacles encountered and keys to success.
The research, conducted by Forrester Consulting and commissioned by Ivalua, used a digital maturity index to assess organizations’ structure, strategy, process, measurement and technology to determine the true level of digital maturity. It found that 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.
“Procurement leaders have the opportunity to deliver a true competitive advantage for their organizations,” said David Khuat-Duy, corporate 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 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.”
“Ivalua is uniquely able to empower and accelerate every stage of the digital transformation journey. Our platform helps organisations overcome obstacles like poor supplier onboarding and low user adoption. This is why we maintain the industry’s highest customer retention rate, at over 98%, year after year, while serving the most demanding brands in the world.”