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In this guest post, Procurement Leaders invites Zycus’ Richard Waugh to discuss the findings of the latest Pulse of Procurement survey and look at what challenges lie ahead for European procurement functions.
We live in difficult times where volatility is the norm. For any business leader today the top challenge is managing cost, but serious challenges for procurement teams stand in the way: poor information quality, time-consuming and costly manual sourcing processes, weak process control and difficulty obtaining interest and support from internal spend stakeholders for procurement-led business performance improvement initiatives.
Procurement pros in Europe can be thought of as having greater strategic maturity than peers in other regions - 38% as opposed to 36%. This, however, is in opposition with the fact that labour intensity of procurement processes remains very high. High level of manual intervention often affects the information quality, which is another issue grappling European procurement.
These figures come from a recent research report, Pulse of Procurement Europe 2013 published by Zycus, which surveyed 109 procurement professionals across Europe. It paints an interesting picture of the European procurement scenario and focuses on understanding the procurement priorities in the coming year, the procurement technology enablement plans and top features European organisations consider while implementing technology.
As business leaders across industry sectors are working towards realising cost efficiencies through streamlined procurement, with millions of dollars at stake, the significance of procurement automation is on rise. Procurement technology plays a key role in boosting productivity, eliminating processing snarls, slashing turnaround times and saving money. Organisations are picking up this trend rapidly in order to achieve greater strategic procurement control.
For management what matters the most is that procurement generates savings. As per the study, European companies have BIG savings objectives for the coming year. On average, European procurement teams are looking to bank cost savings equaling an estimated 10% of total enterprise spending (on par with the global average) while one in four European companies (26%) will pursue even higher cost-savings goals.
Armed with big savings objective, European organisations will have to focus on devising a procurement strategy that leverages combination of procurement automation solutions rather than relying on point solutions. Also of importance is driving the user adoption rate, so the execs do not opt out of using procurement technology and thus help reduce the labor dominance in procurement process and also improve the information quality, process and rigor.
Richard Waugh is VP corporate development at Zycus.