Digital Procurement World’s “10X Procurement” study highlights imminent shifts in procurement strategies, technological adoption, and the need for enhanced digital skills among leaders.
Digital Procurement World’s inaugural “10X Procurement” study, drawing insights from over 200 global procurement leaders, reveals an industry poised for significant change. Conducted in collaboration with Professor Remko van Hoek from the University of Arkansas, the study suggests that procurement could undergo a radical transformation within the next 12 to 18 months.
The focus is shifting from traditional procure-to-pay (P2P) automation to the digitization of strategic sourcing and supplier relationship management. However, the rapid pace of technological advancement is outpacing procurement leaders’ ability to implement change effectively.
AI Adoption Set to Skyrocket, But Hurdles Remain
The study predicts a 187% increase in the adoption of artificial intelligence (AI) within the next year. However, only 20% of procurement teams currently utilize AI at scale. This discrepancy highlights a disconnect between the ambition to transform and the readiness to implement change. Furthermore, a widening skills gap, with a 30-35% shortfall in critical capabilities such as change management and digital acumen, threatens the success of efforts to harness new technologies.
Underutilization of Technology and Cultural Lag
Despite the rising adoption of AI and other technologies, procurement processes remain only 50% automated on average. The underutilization of technology is a significant issue, with only 20% of respondents adopting or scaling AI within their procurement functions. The report also points to a cultural lag, with many procurement teams having clear roadmaps for digital transformation but lacking the culture to embrace and sustain this change.
Redefining Success Metrics
The study concludes that organizations focusing excessively on cost-cutting are at a disadvantage compared to those emphasizing agility and resilience. The authors call for a shift away from rigid cost-saving goals towards more innovative, relationship-driven strategies that drive resilience.
A detailed report on the study’s insights will be available after the DPW Amsterdam 2024 conference, which concludes on October 10, at dpw.ai.
