Innovation Continues to Drive the Evolution of Procurement Technology (Report Preview!)

Ardent Partners’ latest and greatest technology-focused research, Sourcing and Procurement: The 2016-2017 Technology and Innovation Outlook Report! Click here to download, has published and is now available to download. Click here to get your hands on one of the most exciting reports of the year! (registration required).

Following the dot.com bubble and the wave of technological innovation it created, Chief Procurement Officers and procurement teams began adopting digital tools to aid in the execution of key processes, like spend analysis, sourcing, procurement, contract management, and supplier management. Within the last five years, supply management tools have become more user-friendly, effective, and easily integrated with enterprise technology infrastructure. As a result, their level of usage is increasing, and in turn, users are driving more volume and ultimately more value from them. Digital, automated tools have enabled fewer hands to transact greater volumes of tactical work, which has allowed Chief Procurement Officers and teams to shift their focus to strategic parts of the business, like relationship-building and long-term planning. They have also helped practitioners and leaders to extract more value out of their processes by capturing, managing, and converting procurement data into intelligence; and then leveraging that intelligence to make faster, more informed decisions across the source-to-settle process.

The recent procurement or supply management technology market has been strong with an expectation that it continues in 2017. While large publicly-held companies are foregoing capital and long-term investments in order to return more cash to investors (in the form of dividends and share buybacks), the emergence of Software as a Service (SaaS)-based solutions has enabled technology investments to move from the capital expense line to an operating expense line.

Although current adoption levels are highest for eSourcing (58%), eProcurement (56%), and ePayments (66%), there is significant opportunity for other organizations to adopt these and other solutions. Ardent Partners’ report, Sourcing and Procurement: The 2016-2017 Technology and Innovation Outlook Report, shows that Chief Procurement Officers generally plan to invest in technology solutions and digitize/automate their processes over the next two to three years, which would drive current adoption levels well past 50% for all applications in the survey and 80% or 90% for some. But historically, procurement leaders have been unable to fully convert technology investment plans into action. Many teams remain challenged by budgetary, talent, and technology constraints to invest in modern tools, which can stagnate performance and growth. Although there are significant opportunities available for procurement organizations to adopt some or all of these tools in the near future, such adoptions will likely continue to be incremental rather than meteoric. Nonetheless, Ardent Partners predicts that barring a sharp global economic decline, the 2016 – 2017 sourcing and procurement technology markets will remain strong, with low-double digit growth expected.

In some respects, the industry needs a catalyst or two (or several) to reignite a supply management technology fever, something not seen since the late nineties. The usual suspects like cloud-based solution delivery, improved usability, and price compression have each contributed in their own way to the industry’s advancement. The report continues with a look at current technology trends and a detailed discussion of the innovations that will most likely serve as these needed catalysts.

Download the full report by clicking here and gain all of this invaluable insight with our compliments (registration required).

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