Business

SAP, Oxford Economics Research Finds Managing Spending an Issue

A mere 23 percent of procurement and supply chain executives have the ability to see a complete, real-time view of their overall spend, and nearly 50 percent are still manually analyzing data to inform their decision-making.

That’s according to a new report from SAP and Oxford Economics, which surveyed 1,000 procurement and supply chain executives who are responsible for direct and indirect goods, services and external workforce spend.

“Business leaders increasingly understand the value of procurement goes beyond cost reduction,” said John Wookey, president of the SAP Intelligent Spend and Business Network.

“Procurement is central to productivity and innovation, but its potential is only fully realized through digitalizing end-to-end spend management processes on a single platform in the cloud. Putting organizations in a position to align spend decisions to business strategy in today’s networked economy — this is what intelligent spend management is all about.”

The research is broken down into five reports examining key areas of spend management:

• “Leaders Aim Higher: Elevating Procurement’s Strategic Value to the Business” focuses on the 10 percent of executives who made greater investments in procurement digital transformation and are realizing associated benefits.

• “Procurement-Powered Performance: How Digital Transformation Is Elevating Procurement” shows that as organizations reap benefits from digitalizing procurement, challenges still remain, with 38 percent of executives surveyed saying most or all of their procurement processes are still manual, and only 54 percent saying their procurement technologies enable them to make decisions that are data-driven.

• “Getting Closer to See Further: Procurement Can Embrace Advanced Analytics to Predict and Manage Supplier Risk” finds widespread vulnerabilities in supplier risk management, covering poor visibility and overreliance on too few suppliers. Under 50 percent of executives said they regularly refresh risk mitigation plans to address potential disruptions, and only 32 percent said their supplier risk management is highly effective.

• “Close Collaboration That Goes Beyond Transactions: Direct Spend Leaders Engage with Essential Suppliers to Improve Performance” show how direct spend leaders who embrace automation and treat suppliers as partners drive superior business results, with 92 percent of leaders reporting they use a network to collaborate with suppliers, compared with 69 percent of other respondents.

• “Agility Isn’t Always on the Payroll: Gain Full Visibility of Your External Workforce to Help You Drive Better Business Outcomes” shows that 35 percent of executives reporting using technology to help manage their contingent workforce and 70 percent saying they use technology for services procurement.

To access the full report, click here.