The Latest Procurement Industry Statistics Explained
In 2023, the global procurement software market is projected to reach over 7.3 billion USD.
The statistic provided states that in 2023, the global procurement software market is estimated to exceed 7.3 billion USD. This projection suggests a substantial growth in the market size compared to previous years, indicating an increasing demand for procurement software solutions worldwide. The rising adoption of digital technologies, automation, and the need for efficient procurement processes are key drivers behind this anticipated expansion. As businesses seek to streamline their procurement activities, improve transparency, and achieve cost savings, the procurement software market is expected to continue its growth trajectory in the coming years. The robust market forecast underscores the importance of technology in enhancing procurement efficiency and effectiveness on a global scale.
In a study, 57% of procurement leaders reported that they do not have complete visibility into their supply chain.
In a study conducted among procurement leaders, it was found that a significant majority, specifically 57%, reported that they lack complete visibility into their supply chain. This statistic indicates a concerning trend where a substantial portion of leaders responsible for sourcing and managing goods and services for their organizations face challenges in having a comprehensive understanding of their supply chain operations. The lack of complete visibility could potentially lead to inefficiencies, increased risks, and operational disruptions within the supply chain, highlighting the importance of improving transparency and access to information in procurement processes.
According to Deloitte, 65% of procurement leaders have limited or no visibility beyond their tier 1 suppliers.
The statistic presented by Deloitte suggests that a significant majority, specifically 65%, of procurement leaders lack complete visibility into their supply chain beyond their tier 1 suppliers. This implies that many organizations may not have comprehensive information about the sources and practices of their suppliers further down the chain, potentially exposing them to various risks such as disruptions, unethical practices, or compliance issues. Limited visibility can hinder procurement leaders from effectively managing their supply chain operations, making it challenging to assess and address potential vulnerabilities or make informed decisions. This statistic highlights the importance of enhancing supply chain transparency and risk management practices to ensure organizational resilience and sustainable supply chain operations.
Businesses can save upto 20% of their total spend by improving procurement processes, according to McKinsey.
The statistic suggests that by enhancing the efficiency and effectiveness of their procurement processes, businesses have the potential to reduce their overall expenditures by up to 20%. This indicates that there is considerable room for improvement in the way organizations manage their procurement activities, leading to significant cost savings. McKinsey’s research highlights the importance of optimizing procurement strategies to drive financial performance and enhance competitive advantage in today’s business landscape. By streamlining processes, negotiating better deals with suppliers, implementing cost-saving measures, and leveraging technology, businesses can unlock substantial savings and improve their bottom line.
Approximately 60% of companies do not routinely measure procurement performance.
The statistic that approximately 60% of companies do not routinely measure procurement performance indicates that a significant portion of businesses do not have formal processes in place to evaluate and track the effectiveness of their procurement activities. This suggests a potential lack of oversight and accountability in the procurement function, which can lead to inefficiencies, missed cost-saving opportunities, and lower overall performance. Without regular measurement and assessment of procurement performance, companies may struggle to optimize their supply chain operations, manage supplier relationships effectively, and achieve their strategic procurement goals. Implementing robust performance measurement practices can help organizations identify areas for improvement, drive cost savings, enhance transparency, and ultimately enhance their overall procurement performance.
The top driver for procurement digitization is cost reduction, followed by value-add to the business and process simplification (The Hackett Group).
The statistic indicates that among various reasons for businesses to digitize their procurement processes, cost reduction is identified as the primary driver, followed closely by the desire to add value to the business and simplify procurement processes. This suggests that organizations are looking to leverage digital technologies to streamline their procurement activities, with a primary focus on achieving cost savings. Additionally, the emphasis on adding value to the business and simplifying processes highlights a strategic approach to procurement digitization aimed at improving overall efficiency and effectiveness within the organization. By prioritizing these factors, businesses can potentially unlock a range of benefits such as increased operational efficiency, better decision-making, and enhanced competitiveness.
By 2022, approximately 200,000 procurement and supply chain jobs could be automated.
The statistic “By 2022, approximately 200,000 procurement and supply chain jobs could be automated” predicts that advancements in technology, particularly in the areas of artificial intelligence and automation, may result in the automation of around 200,000 jobs in the procurement and supply chain industry by the year 2022. This implies that tasks currently performed by humans in roles such as purchasing, inventory management, and logistics could be taken over by machines or algorithms. The automation of these jobs could lead to increased efficiency, cost savings, and improved accuracy in supply chain operations, but it may also have implications for the workforce, potentially displacing a significant number of workers in these sectors.
As of a survey in 2018, only 23% of procurement professionals thought their company’s procurement technology capability met its needs.
This statistic from a 2018 survey indicates that a majority of procurement professionals, approximately 77%, believed that their company’s procurement technology capability did not adequately meet its needs. The low percentage of only 23% shows a concerning lack of satisfaction among professionals in their company’s procurement technology. This suggests that a significant portion of organizations may be facing challenges or inefficiencies in their procurement processes due to technology limitations. It underscores the importance of investing in and continuously upgrading procurement technology to improve efficiency, effectiveness, and overall satisfaction among procurement professionals.
Less than 33% of procurement leaders are currently investing in smart technologies like artificial intelligence and machine learning.
The statistic “less than 33% of procurement leaders are currently investing in smart technologies like artificial intelligence and machine learning” indicates that a relatively small proportion of procurement leaders are leveraging advanced technologies in their operations. This suggests that the majority of procurement departments may not be fully utilizing the potential benefits that AI and machine learning can offer, such as improved efficiency, cost savings, and better decision-making. The low investment in these smart technologies may be due to various factors, including concerns about the complexity of implementation, data security issues, or simply a lack of awareness of the potential advantages they can bring to procurement processes. Increasing investment in AI and machine learning could help procurement leaders stay competitive in a rapidly evolving business landscape and drive improvements in their overall procurement strategies.
39% of procurement leaders indicate their staff lacks the skills needed to implement their procurement strategy properly.
This statistic indicates that a significant portion, specifically 39%, of procurement leaders believe that their staff does not possess the necessary skills to effectively execute their organization’s procurement strategy. This suggests that there may be a gap in talent or expertise within the procurement department, potentially hindering the successful implementation of important strategic initiatives. To address this issue, organizations may need to invest in training and development programs to upskill their procurement staff, or consider hiring new talent with the required skill set to ensure the successful execution of their procurement strategies in the future.
45% of surveyed procurement leaders believe their current data analysis capabilities are poor or very poor.
The statistic ‘45% of surveyed procurement leaders believe their current data analysis capabilities are poor or very poor’ highlights a concerning sentiment among a significant portion of procurement professionals regarding the effectiveness of their data analysis capabilities. This insight suggests that nearly half of the surveyed individuals feel that their organizations are lacking in terms of analyzing data, which could potentially hinder decision-making processes, strategic planning, and overall operational efficiency. It underscores the importance of investing in improving data analysis capabilities within procurement functions to enhance performance and achieve better outcomes.
In 2022, the global procurement outsourcing market is projected to reach over $4.6 billion.
The statistic indicates that in 2022, the global procurement outsourcing market is expected to experience significant growth, with a projected value exceeding $4.6 billion. This suggests a growing trend among businesses to outsource their procurement functions to specialized third-party providers to drive efficiency, cost savings, and improved supply chain management. The increase in market size highlights a shift in businesses recognizing the benefits of outsourcing non-core activities like procurement, allowing them to focus on their core competencies and strategic initiatives. This statistic underscores the importance of procurement outsourcing as a strategic business decision that can lead to competitive advantages in the global marketplace.
2 in 3 procurement leaders report that digital procurement strategy will be the preferred method for procurement by 2025.
This statistic indicates that a significant majority of procurement leaders, specifically two out of every three, believe that digital procurement strategies will become the preferred method for procurement by the year 2025. This suggests a growing trend towards embracing digital technologies in the procurement field, as organizations seek to leverage advancements such as automation, artificial intelligence, and data analytics to enhance efficiency, performance, and decision-making processes. The statistic underscores the increasing recognition among industry professionals that digital procurement strategies hold the potential to drive improvements and innovation within the procurement function, positioning organizations for greater success and competitiveness in the future.
As per a survey, 85% of the procurement agencies intend to invest in procurement technology in the next three years.
The statistic that 85% of procurement agencies intend to invest in procurement technology in the next three years indicates a strong trend towards adoption of technology within the procurement industry. This high percentage suggests that the majority of procurement agencies recognize the potential benefits of utilizing technology to streamline operations, improve efficiency, and drive cost savings. The intention to invest in procurement technology also reflects a proactive approach by organizations to stay competitive in a rapidly evolving business environment where technological advancements play a vital role in shaping industry practices. This statistic underscores the increasing importance of leveraging technology as a strategic tool in modern procurement processes to enhance overall effectiveness and achieve better outcomes.
The number of businesses preferring e-procurement strategies has grown by 70% since 2011, demonstrating a significant shift towards digital procurement strategies.
The statistic indicates a substantial increase in the adoption of e-procurement strategies by businesses, with a 70% growth rate observed since 2011. This growth suggests a notable trend towards the use of digital procurement methods in the business sector. E-procurement refers to the electronic automation of procurement processes such as sourcing, ordering, and payment transactions. The significant shift towards e-procurement strategies may be driven by the benefits they offer, including cost savings, efficiency improvements, increased transparency, and better control over procurement activities. This trend highlights the increasing recognition of the value and importance of leveraging technology to streamline and optimize procurement processes within organizations.
Conclusion
The procurement industry statistics provide valuable insights into trends, challenges, and opportunities within the sector. By analyzing data on procurement performance, supplier relationships, and market dynamics, businesses can make informed decisions to optimize their operations and drive success. Staying up-to-date with the latest statistics is crucial for companies looking to stay competitive in an evolving and increasingly global marketplace.
References
0. – https://www.www.scmdojo.com
1. – https://www.spendmatters.com
2. – https://www.www2.deloitte.com
3. – https://www.www.statista.com
4. – https://www.www.procurify.com
5. – https://www.www.fronetics.com
6. – https://www.www.marketresearchfuture.com
7. – https://www.financesonline.com
8. – https://www.www.thehackettgroup.com
9. – https://www.sig.org
10. – https://www.www.thehrdirector.com
11. – https://www.www.mckinsey.com
