Following a period of cutting costs and supply chain disruption, procurement teams want more help from digital technology — and sooner rather than later.
Companies across various industries plan to increase procurement technology spending next year to improve their efficiency and agility in managing procurement across their global supply chains, Amazon Business says in its 2024 State of Procurement Report, released this week.
The report, featuring data and analysis from an international survey of over 3,000 procurement professionals, notes that 98% of respondents said they were planning investments over the next few years in analytics and insights tools, automation, and artificial intelligence.
“Following a year of focusing on reducing costs, procurement leaders are now planning to use the funds they saved to invest in approaches to optimize their procurement processes and allow them to operate more strategically, with the efficiency and complexity of procurement listed as the top challenge they’re currently facing,” Amazon says.
“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” says Alexandre Gagnon, vice president of Amazon Business Worldwide.
Amazon says the report compiled and analyzes insights from 3,108 procurement professionals at organizations involved in government, financial services, hospitality and food service, health care services, manufacturing, medical and pharma, retail, technology, and telecom industries. Survey respondents represented the United States, the U.K., France, Germany, Italy, Spain and Japan.
Aster Angagaw, Amazon Business vice president and head of the public, commercial and strategic sector, says procurement professionals are zeroing in on several critical areas, including speed in procuring products and agility in dealing with sudden needs to find new products, sources and shipping routes.
She notes that many companies have a procurement processing system set a certain way and following a particular process. When unexpected changes occur, she adds, “your ability to respond quickly and flexibly becomes really challenging.”
But she asserts that with business analytics and other AI-powered technology applications, procurement pros can more quickly identify product sources and manage expedited deliveries.
“This whole idea of smart business buying is being able to use the digital automation, digital transformation, AI and machine learning to create this opportunity for efficiency, flexibility and agility,” Angagaw says.
She adds that AI and other new technology applications can help procurement managers fulfill corporate goals of procuring products from a diverse group of suppliers known for following sustainable, environmentally friendly, and good governance practices.
But the study found that while 81% of respondents said their companies have mandates for purchasing from certified sellers, including, sustainable, local, or minority-owned businesses, 85% said they needed help finding such suppliers.
The study noted the following percentages of respondents using technology applications:
- 62% – Procurement analytics or reporting tools.
- 54% – Automation of manual procurement processes.
- 51% – Digital or online invoices.
- 47% – AI-driven optimization of purchasing decisions.
- 41% – Voice technology.
The study also noted the following percentages of respondents identifying their top areas for investment:
- 36% – Technology or tools to be more efficient.
- 35% – Mitigating procurement risks amid economic or geopolitical challenges.
- 33% – Setting or meeting goals for ESG of buying from certain types of suppliers.
- 30% – Decentralizing purchasing so buyers can purchase more easily for their teams.
- 29% – Integrating more closely with other parts of an organization.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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