Digital Transformation in Procurement: How Close Are We? a Study Based on the Complete Results of the Global JAGGAER Digital Procurement Survey
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Digital Procurement 2019 Digital Transformation in Procurement: How Close Are We? A Study Based on the Complete Results of the Global JAGGAER Digital Procurement Survey In Cooperation With Digital supply networks are evolving, connecting all parts of the supply chain, and insight-driven organizations are applying advanced analytical capabilities to enhance performance. Digital transformation is inevitable and high performing organizations are leading the way on adoption. 2 jaggaer.com CONTENTS Table of Contents ..................................................................................................................................................................................3 Introduction ...........................................................................................................................................................................................4 Key takeaways ..........................................................................................................................................................................................................5 What you will learn from this report ................................................................................................................................................................. 6 What does digital transformation mean for procurement? ......................................................................................................................6 Leading and lagging indicators..........................................................................................................................................................................8 Part 1: Survey Findings .........................................................................................................................................................................9 Process efficiency is currently seen as the key benefit ............................................................................................................................9 Still a 50-50 split ......................................................................................................................................................................................................9 Integration is the next step .................................................................................................................................................................................12 P2P the most widely automated procurement process ..........................................................................................................................14 Uncertainty about where to go next ...............................................................................................................................................................15 Predictive analytics popular but skepticism persists .................................................................................................................................17 Process efficiencies regarded as the most important benefit ...............................................................................................................19 Insufficient budget is by far the largest obstacle ........................................................................................................................................21 Integration of data, systems and processes: some progress, but still largely manual ............................................................... 22 Which data points are being integrated? .....................................................................................................................................................24 Part 2: The Future of Procurement ................................................................................................................................................. 28 A missed opportunity? ........................................................................................................................................................................................ 28 Artificial Intelligence ............................................................................................................................................................................................ 28 Chatbots, NLP & guided buying ..................................................................................................................................................................... 29 Blockchain in procurement ............................................................................................................................................................................... 29 Predictive and prescriptive analytics ............................................................................................................................................................ 30 Robotic process automation (RPA) ................................................................................................................................................................. 30 Internet of Things (IoT) .........................................................................................................................................................................................32 Adding it all up: what does digital procurement have to offer? ...........................................................................................................32 Cognitive procurement .......................................................................................................................................................................................32 Two key applications of cognitive procurement........................................................................................................................................33 The “digital workforce”: Will AI replace procurement experts? ...........................................................................................................33 The human factor ..................................................................................................................................................................................................35 An example: predictive order management ...............................................................................................................................................35 Next Steps Towards Digital Transformation ...................................................................................................................................37 The JAGGAER approach to digital procurement strategy .....................................................................................................................37 The value of a single platform ..........................................................................................................................................................................38 AI Experts Weigh In: The Outlook For Digital Procurement ― What’s Next? ........................................................................... 38 Understanding the context ................................................................................................................................................................................38 Drivers of digital transformation in procurement ..................................................................................................................................... 39 Measuring the results ...........................................................................................................................................................................................41 Priming for success ................................................................................................................................................................................................41 Survey Demographics ....................................................................................................................................................................... 43 JAGGAER Locations .......................................................................................................................................................................... 44 The Survey Questionnaire ................................................................................................................................................................ 46 Acknowledgements ........................................................................................................................................................................... 52 3 INTRODUCTION In our Digital Procurement 2017 report we wrote about the high expectations that new digital technologies would drive the “greatest revolution to impact procurement in decades.” Where are we two years on? Have the necessary budgets been assigned? What progress have organizations made with the integration of data that is necessary to drive digital transformation, and to provide the basis for data analysis? These are the kind of questions to which we sought answers in the 2019 survey. A total of 321 procurement professionals, representing a cross-section of public sector, production and non-production sectors from around the world, took part. The results suggest that overall, progress has been very slow. Many organizations are hesitant about investigating new digital