Advanced procurement boosts company innovation by 32%, study finds
Recent research by Vertice suggests a critical link between advanced procurement processes and a company's ability to innovate and speed to market. The firm conducted a survey involving 300 procurement leaders in the US and UK, revealing that businesses with optimised procurement are 32% faster to innovate than their counterparts. However, only 18% of companies have achieved this level due to decentralised, reactive, and manual procurement processes.
CEO of Vertice, Eldar Tuvey, emphasised the importance of strong procurement processes. "Procurement is an important catalyst to business innovation; the secret weapon that often goes unnoticed. 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 But most procurement departments have been unable to mature their outdated, manual processes, throttling the business' progress and reinforcing an unnecessary negative perception," he said.
The "Procurement Impact Report" also noted a disparity between procurement maturity in the US and the UK. While almost half (44%) of US companies are classified at the lowest levels of procurement maturity, less than one-third (32%) of UK companies fall into this category. Instead, two-thirds of UK businesses are said to be in more advanced stages of procurement maturity, leveraging automation, AI, and integration technologies.
Findings from the survey indicate that companies with advanced procurement processes not only innovate quicker but also see a 20% improvement in maintaining IT and security compliance, a 27% increase in efficiency and collaboration, and a 22% enhancement in budget control. However, despite these advantages, 37% of procurement leaders report that their efforts are hampered by their businesses' poor perception of procurement's strategic value. Additionally, 35% of respondents noted that organisations are reluctant to invest in necessary skills to improve procurement functions.
In response to these challenges, Vertice has launched Intelligent Workflows, a new procurement orchestration tool designed to simplify and expedite purchasing processes. This new tool aims to relieve the manual burden on procurement teams by implementing smart, pre-emptive decision-making elements such as automated pre-approvals and routing, as well as streamlined compliance checks. The tool also provides granular control and visibility into purchases, renewals, and intake.
Discussing this new development, Tuvey added, "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 new 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."
