PROACTIS Blog

Survey: Areas of Focus for Review and Transformation

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Following our previous article: “Survey: Current Levels of Spend Control & eProcurement Automation this article summarises the areas of focus for review. 
The area in which most respondents said they will focus on in the very near term was Spend Analysis with 67% saying they will focus on this area in 6 months or less, and 93% saying they expect to focus on it at some point.

The areas with the next highest near-term focus were:
  • Supplier Information Management with 56% saying they will focus on it in 6 months or less and 93% saying they expect to focus on it at some point
  • Contract Visibility and Management with 53% saying they will focus on it in 6 months or less, and 88% saying they expect to focus on it at some point
  • Supplier Relationship Management with 52% saying they will focus on it in 6 months or less and 94% saying they expect to focus on it at some point
Areas that most respondents said they are already focusing on TODAY were:
  • Purchase-to-Pay with 35% saying they are currently reviewing it for transformation
  • Contract Visibility and Management With 30% saying they are currently reviewing it for transformation
  • Spend Analysis With 30% saying they are currently reviewing it for transformation
Areas with the least near-term focus were:
  • Invoice Receipt and Processing with 35% having no plans for focus
  • Purchase-to-Pay with 33% having no plans for focus
  • Electronic Supplier Commerce with 33% having no plans for focus
Comments
 
It’s interesting that Purchase-to-Pay had one of the highest levels of focus TODAY while it and the related function of Invoice Receipt and Processing also had the highest levels of NO plans for focus. This most likely indicates that these respondents represented two different groups:
  • One group that has deployed Purchase-to-Pay fairly recently, is satisfied with performance in that area, and is now focusing on other areas outside of Purchase-to-Pay
  • Another group that currently has either no Purchase-to-Pay system and recognises the importance of getting that piece of the Spend Control framework in place first or has a Purchase-to-Pay system they implemented some time ago and feel that they should revisit and refresh that implementation
  • That assumption is supported by the fact that 57% of respondents saying their current level of automation is on the low end of the scale (1-2) also said they plan to focus on Purchase-to-Pay for review and transformation in 6 months or less
  • The low level of plans for near-term focus on Invoice Receipt and Processing and Electronic Supplier Commerce is surprising given that global levels of eInvoicing are still quite low. It’s been clearly shown that electronic commerce and other forms of streamlined invoice receipt deliver tangible monetary savings. These areas might have come out higher if the survey was only done with Financial Directors. Further analysis would be required to understand more detailed differences between companies for example; those using scan-to-archive vs. scan-to-process technologies and the difference between “yes we have automated” and “we have fully transformed” this important area
  • Overall, 82% of organisations are either focusing on some area today or plan to at a point, while 77% are today or will be within 6 months and 57% are focusing on at least one area TODAY 
Related Observations
 
The reason why Spend Analysis and Procurement Intelligence continues to be an area most organisations want to do better is that, like many things, ‘the devil is in the detail’.
  • Most organisations first concentrate on just getting good data related to what has already been spent and adding it up by category, department, supplier, etc. But that is just the tip of the iceberg of what they really want. They want to go beyond just looking at the past (valuable as that is) to looking at what is going on right now
  • They want actionable information that points out where the proper process is not being followed; where on-contract spend is low; where there are process bottlenecks and so on
  • They want actionable insights that they can use to continually fine-tune their processes, procedures, systems and training. That’s why we think Spend Analysis rates both relatively high on current automation and very high on future plans
  • More detailed analysis is required to understand the impact of such a broad range of Spend Analysis tools available on buying plans (e.g. online subscription tools and general search engines) – we see notable variations in their usage. Spend Analysis should be seen as a business-as-usual application, not a once a year event
  • Does the low level of planned focus on Electronic Supplier Commerce suggest that many procurement departments are still taking a back seat role in end-to-end process transformation? According to other research, 75% of the process costs of the Source-to-Settle cycle is attributed to supplier interaction and commerce. But according to the Gershon Report and other analysis in public sector, there are still very low levels of electronic supplier engagement, even after all these years 
  • The fact that many organisations are focusing on Spend Analysis, Supplier Relationship Management, Supplier Information Management and Contract Visibility and Management may indicate a growing synergism between Finance, Procurement and other areas of the organisation since these areas have a big impact on the entire organisation
To learn more, download the full survey results
 
 
 
Get in
touch
Attend
an event
Explore
resources