Advanced Procurement Gives Businesses Competitive Advantage

Companies are risking their competitive advantage and innovation potential due to outdated procurement processes, according to a new report from Vertice.

The Procurement Impact Report believes companies risk losing vital ground if their procurement processes are not updated with more modern capabilities.

The SaaS and cloud spend optimisation platform surveyed 300 global procurement leaders to rate their businesses' purchasing processes and performance across eight key metrics, ranging from cost control and budgeting to compliance.

It uncovered a correlation between an organisation's procurement maturity and the business' overall commercial performance.

Almost a fifth (18%) of firms have optimised their procurement processes, making them customised, transparent, automated and intelligent. These organisations are all able to innovate faster, ship new products sooner, maintain compliance more easily  and control budgets better.

However, that leaves 82% of businesses with procurement teams which remain reliant on decentralised, reactive and manual processes, leading to generally poor performance. 

The report also discovers that this problem is more acute in the US, where 44% of businesses are at the lowest maturity level. In the UK, 67% are more advanced in their procurement maturity, with reliance on automation, AI and integrations.

Procurement: The unsung hero

Vertice's research has uncovered a 'procurement innovation gap', where companies investing the most in advancing their procurement capabilities are also the fastest to innovate.

These organisations are seizing the chance to utilise their competitive advantage. They are 32% better equipped to implement new initiatives and 29% faster in bringing new products and services to market.

"Procurement is an important catalyst to business innovation; the secret weapon that often goes unnoticed," says Eldar Tuvey, CEO and Founder at Vertice.

"Quick, intelligent, integrated processes can equip teams faster with safe and compliant tools, accelerating overall project timelines.

"But, most procurement departments have been unable to mature their outdated, manual processes, throttling the business' progress and reinforcing an unnecessary negative perception."

Compared to those relying on manual, decentralised and reactive processes, Vertice found that businesses with the most advanced procurement processes enjoy:

• A 27% jump in efficiency and ease of collaboration
• A 22% improvement in budget control
• A 20% increase in a company's ability to maintain IT and security compliance.

Unwilling to improve procurement

With these clear benefits, you'd expect all companies to be looking to improve the maturity of the procurement functions.

However, many leaders feel they are actively prevented from building high-performing procurement.

More than two-thirds (37%) say procurement is not perceived as a strategic priority, while a similar proportion (35%) say their organisation is not willing to invest in the skills required to progress. 

To help procurement teams increase their maturity and deliver strategic impact more quickly, Vertice has launched Intelligent Workflows, a procurement orchestration tool built to simplify and accelerate purchasing processes and ease the manual burden on busy procurement teams.

Intelligent Workflows introduces smart, pre-emptive decision-making into the procurement process, including automated pre-approvals and routing and simplified but accurate compliance. It also offers granular control and visibility into every ongoing purchase, renewal and intake.

Eldar adds: "Modern procurement teams' roles are increasingly broad and complex. And in fast-growing or rapidly-changing businesses, procurement processes aren't always keeping up – meaning procurement teams are finding themselves filling in the gaps manually.

"It's a step back for procurement when the business is trying to make leaps forward. Intelligent Workflows is the boost these teams need.

"Our procurement orchestration tool brings automation and intelligence to the purchasing process, by eliminating manual approval routing and re-routing, anticipating bottlenecks and reducing the daily workload for procurement teams – all while improving control and speed of outcomes."

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