Majority of Manufacturers and Retailers Say Digitizing Procurement Is Key to Modernization

The old saying holds true: Chains are only as strong as their weakest links.

And that’s especially true of supply chains, where disruptions during the pandemic laid bare the pain points and pressures caused by outdated procurement processes.

After all, at the heart of any enterprise, almost regardless of vertical, lies the critical and deceptively simple act of getting the equipment, the supplies, the raw materials in hand that are instrumental in industry, in getting finished goods into the hands of customers.

For the report “Digital Payments: Modernizing Procurement Processes,” PYMNTS and Corcentric surveyed 250 CFOs at enterprises across a variety of industries, from manufacturing to finance to see how these executives thought about procurement, and what needs to be done to improve operations.

A Wide Embrace of Modernization

The drive to modernize procurement cuts across industries, but the levels of commitment to digitize procurement varies depending on where you look. Procurement “upgrades” are getting the most commitment from manufacturers and retailers — and even financial firms. The data show that 66% of retailers and 59% of manufacturers say the most important reason why they are investing in digital procurement technology is to modernize their business processes.

As for other verticals: 45% of finance and insurance companies are also investing in digital technology to modernize their procurement processes, as are 27% of healthcare companies.

There’s a palpable ripple effect, where investing in one area of back-office upgrades is being done in conjunction with other efforts to improve their supply chain interactions. We found that 55% of manufacturers and 54% of retailers investing in improvements to their procurement systems are also investing or planning to invest in upgrades to logistics and supply chain functions.

Logistics, of course, are critical when it comes to getting inventory and raw materials where they need to go as they ultimately land in factories or on shelves. But even those firms not explicitly involved with production are getting into the act: 40% of finance and insurance companies and 34% of healthcare companies investing in digital technology to improve their procurement systems are also investing in their logistics and supply chain functions. Moreover, 45% of finance and insurance and over a quarter of healthcare companies say procurement improvements are important in the overall bid to modernize operations.