Science Warehouse undertook the annual Procurement Trends Survey for the sixth consecutive year in early 2017 and released the results in May.
At the recent Science Warehouse Annual User Conference, Jonathan Betts, Customer Success and Alliances Director, was interviewed by Peter Smith, Managing Editor, Spend Matters UK/Europe and here we provide a synopsis of what was discussed.
There were a number of themes which came from the Survey, one being data. The majority of organisations reported that they are still struggling with analysing data and this was still a manual process. Interestingly, it was reported that it is the private sector who find this more of a challenge than the public sector. What do you think the reasons for this are?
Most people are aware of the importance of data, but actually being able to extract data from a spend management solution and do something with this data, can help to ensure that procurement is successful for an organisation.
Within our report, we found that the majority of organisations (77%) struggle to analyse data and that this is still a manual process.
Our research did find that private sector organisations have more challenges in this area, with twice as many private sector organisations reporting ‘little or no consistent reporting due to resource data’ versus the public sector.
One of the reasons that this might be the case, is because commercial organisations may have grown through acquisition and will, therefore, be dealing with a number of legacy systems and different data sets. Or it may simply be the case that the private sector are more critical of themselves than the public sector.
One of the other themes was technology, which again showed a difference between the public and private sector, with more public than private sector organisations increasing their investment in technology. Why do you think that is?
Across all respondents, investing in technology remains at a consistent level over the past few years.
Our results did show that the public sector is more likely to increase their investment – 49% stating they have increased this spend versus 31% in the private sector.
This could be driven by a continued focus on costs in the public sector, with many facing budget and spending constraints – this could be leading them to rely on technology to support them more. There are also regulatory deadlines specifically for the public sector for areas such as eSourcing and PEPPOL, as well as the Lord Carter objectives and better procurement practices in the NHS.
You made reference to strategic procurement being important and highlighted the fact that savings targets were dropping. Why do you think this is?
In this year’s results, we saw the savings target drop from 6-10% (2016), with most respondent’s now stating that their savings target is now 5% or less.
This isn’t to say that the pressure is less now, as many of the public sector organisations that we work with are still under immense cost pressures to save money and this doesn’t look like it will change anytime soon.
It may be the case that larger gains have already been realised so it will now be more difficult to keep finding savings at such a high level, so these will naturally diminish.
With the findings that procurement is becoming more strategic, it would appear that the procurement function is less about cost objectives and savings and is looking to add more value to the organisation.
And in looking at future trends, there was a big drop in ‘Cloud-based solutions’ being most relevant in the next 5 years. This seems odd at first sight- or is it simply that they are already in place?
There has been a big fall in respondents selecting ‘Cloud-based solutions’ as being most relevant over the next 5 years.
I would agree that organisations are aware of the effects of Cloud-based technologies and see them as “business as usual” rather than something transformational for the future. To read more about our Procurement Trends Survey, download the report now.
Read Peter Smith’s review of the Science Warehouse Annual User Conference
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