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Pulse of Procurement 2014: An Overview of Procurement Technology Trends (Part II) for 2014

By Jagriti Chhateja
In Procurement Technology
Apr 15th, 2014

In post 1 on Pulse of Procurement 2014 series we discussed the Pain Areas for 2014 and the future expectations of Procurement Execs, we then discussed the current state of Procurement in post 2 and post 3 followed by a discussion on the Procurement Technology Trends for 2014 in post 4. In our latest post we continue to explore the Procurement Technology Trends for 2014 and would highlight the trends of procurement technology utilization in the industry in the last few years and its impact on procurement performance.

The results of the study show a strong positive correlation between the adoption and use of procurement automation technology and procurement performance. As per the study, high performers in procurement show stronger technology adoption and use across various functions. A weighted average baseline for technology adoption and use was calculated to understand how extensively procurement technology is utilized by different stakeholders and the factors affecting technology adoption and its impact on procurement’s ability to deliver on key performance indicators. The result can be seen in the form of the following graph:

Technology Trends-1-2014

As mentioned earlier, a clear correlation was observed between average procurement technology and use rates with the performance tiers achieved.

Technology Trends-2-2014

A few noteworthy examples that showcase this correlation are:

1.  High Cost Saving Organizations report stakeholder adoption and use rates that are nearly 2 times higher than their counterparts

2. High performers on Spend Under Management (SUM) are around 16 points higher on enterprise adoption and use, 18 points higher on distributed procurement users and 26 points higher for stakeholder adoption and use

3. High Contract Compliance organizations show 21-22 percent higher adoption and use across the three constituencies of enterprise procurement, distributed procurement as well as the stakeholders.

Technology Trends-3-2014

Also, overall technology utilization has gained 12 points in the last three years, from 37% in 2011 to 49% in 2014. Technology utilization, in this case, refers to the estimated percentage of total solution functionality routinely employed by the targeted end users as well as procurement professional’s personal assessment of the current utility of the available procurement technology in aiding work performance.

Technology Trends-4-2014

The study also reveals that organizations that are already using integrated procurement technology suites achieve technology utilization that are way above the baseline averages. Furthermore, procurement professionals working in organizations that operate with suite setups rate the usefulness of their technology much higher than procurement professionals working in organizations that primary used homegrown, solution mix or ERP configurations.

In our next blog, we will discuss the Technology Impact and Wish-list for 2014.So stay tuned for more insights…

Click the download button below to access the report- “Pulse of Procurement 2014 Research Report”

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