The SAP-sponsored report offers insights from more than 2,300 C-suite executives spanning multiple countries, regions and industries and examines the pressures facing today鈥檚 procurement teams. As these teams manage risks like geopolitical shifts, supplier threats, and liquidity risks, the surveyed executives emphasize an urgent motivation to improve their procurement operations through agile, innovative, and fast-paced solutions.

Today鈥檚 complex and uncertain business environment has pushed procurement teams to take matters into their own hands. Not only are they accelerating digitalization by adopting emerging technologies like AI, they are driving it by searching for ways to change the procurement operating model.

As Always, It鈥檚 All About Innovation

Procurement officers view driving innovation as one of their function鈥檚 chief objectives. Doing so will help them navigate risks and respond to an evolving consumer environment.

When procurement is truly influential, it is proactive. Teams that understand digitalization and the technologies being acquired have more impact in this area than those that are reactive. Over two-thirds (70%) of the survey respondents agree that procurement is actively involved in developing their wider organization鈥檚 digital transformation strategy 鈥� though whether this is true in the day-to-day may vary from business to business.

If procurement is to play a more integral role in businesses, changes to the function鈥檚 operating model are likely for some organizations, which is why the research also shows that procurement is accelerating its digitalization, including through the adoption of emerging technologies. Approximately 84% of executives are confident in their procurement team鈥檚 ability to apply technology successfully to automate some processes and shift attention to more strategic and complex tasks.

This ability to seamlessly integrate and adopt new solutions will be critical as procurement teams work to balance capabilities, know-how, and expertise from suppliers to achieve the best possible results.

Digitalization Remains a Top Priority

While innovation is at the core of many companies鈥� priorities, C-suite leaders are laser-focused on the solutions that enable their teams to be more efficient, cost-effective, and risk-averse.

More than half (57%) of the C-suite cite digitalization as the top strategic priority for their procurement teams. This emphasis may be fueled by recent advances in generative AI, which is the top technology trend (34%) executives plan to implement in the next 12 to 18 months.

Digitalization efforts can offer real-time capabilities that better address dynamic market challenges and make existing procurement processes more efficient. Data-driven insights allow for more actionable outputs in strategic decision-making and can even impact procurement鈥檚 role in engaging contingent labor. Augmented with AI, they can easily manage contingent labor by streamlining and standardizing recruiting processes like job advertising, resume scanning, expediting background checks, and more.

More efficient intake management also goes hand-in-hand with digitalization. While generative AI occupies the highest priority, intake management is only one percentage point behind it, making it the second-most likely tech trend to be piloted or implemented. 

Value of Multi-Sourcing and Supplier Diversity

The top organizational risk for procurement was monetary uncertainty (49%), as macroeconomic risks can have a large impact on operational external risk. This is a potential factor as to why procurement teams are focused on risk as a longer-term priority.

Updates here can create opportunities like multi-sourcing, which can improve risk reduction and resilience amid growing external threats, and supplier diversity 鈥� driving market expansion through a more diverse supplier base. This can also reduce single-sourcing dependencies to mitigate risks against potential disruptions.

These possibilities prove how companies must make it a mission to improve the quality of data and the models needed to effectively analyze it. Subpar data directly hinders procurement鈥檚 ability to make good decisions, undermining its overall effectiveness and derailing successful digitalization before it takes hold.

Executives Agree: Time to Go All-In on AI

No other strategic priority attracts nearly as many responses as a priority across all industries as digitalization. However, respondents also agreed on one other key topic: the role that AI will take in the digitalization journey.

Adoption of an AI strategy stands at the joint top of executives鈥� list of digitalization priorities for procurement, alongside spend analytics, both cited by 44%. Almost half (48%) of executives aim to use AI to improve procurement processes through source-to-pay and AI-enabled spend management and decision support.

As the main drivers for digital transformation in procurement, these two objectives are complementary. AI tools can read a contract to evaluate clauses and suggest how they can be improved. It can also enhance data management, streamlining the processes needed to make key procurement decisions.

Fully digitalizing procurement operations has been on the function鈥檚 agenda for several years, but it is a continuous challenge. It is a process that does not have an endpoint, particularly as technologies advance quickly. The leading technologies from just three years ago pale in comparison to what can be accomplished today, which require knowledge across software development, APIs, and AI.

Therefore, success in building a thorough and adaptable AI strategy requires top-level expertise. Acquiring the necessary skills could entail considerable organizational and cultural change in procurement and across the business 鈥� extending beyond the structural shifts and developing new ways of working to build these skills.

The Start of a Procurement Renaissance

Across industries, procurement is already finding new ways to add value to the organization. But now that chief procurement officers and their teams are more consistently gaining a seat at the decision table, the challenge is to keep it.

The ongoing state of disruption offers ample opportunity for procurement teams to continue evolving and demonstrate their worth. Above all, improving collaboration with other business stakeholders will be the key to strengthening procurement鈥檚 role within the organization. Today鈥檚 technology-driven initiatives are as much a human challenge as they are a technology one, and when organizations are planning these initiatives it is clear that they need to consider people, process, and technology in equal measure to ensure success.

For more about the findings from this year鈥檚 Economist Impact report, tune in to this podcast hosted by Art of Procurement: .

Gordon Donovan is global vice president of Research, Procurement, and External Workforce at SAP.

Here are just a few of our year-end acknowledgments and recognition:

• For the seventh consecutive time, 51风流has been recognized as a Leader in the . 51风流was also the only vendor to score among the聽 highest three vendors for every Use Case in the *
• 51风流Ariba was designated by TrustRadius
• 51风流Ariba was named the No. 1 leading procurement software provider by

It is great to receive external recognition, accolades, and awards. We believe this is confirmation that our strategy is on target. But our true mission is to develop innovative procurement solutions that help our customers to run better and deliver the business outcomes they expect.

The SaaS procurement product family at 51风流consists of 51风流Ariba solutions, 51风流S/4HANA for Procurement, and 51风流Business Network. It has a proven track record of providing innovative solutions to solve unique challenges at every step in the procure-to-pay process.

In 2023, we intend to lead the market with our procurement innovation. Here, learn about the first wave of these innovations.

The Next Evolution of Guided Buying

A 360-Degree View of the Person, Purchase, and Organization

Today, professional and casual buyers are thinking about more than just pricing and policy compliance. They want a buying experience that is personalized for them and their role: something predictive, something that offers suggestions for their specific work; an evolution of guided buying with intelligent recommendations to help them make the right decisions, navigate through the process, and weigh the sustainability and environmental impact of their decisions.

The guided buying capability in 51风流Ariba solutions remains the gold standard for purchases of goods and services. At , we demonstrated this next evolution in guided buying. These new capabilities improve the buying experience and leverage artificial intelligence (AI), intelligent recommendations, and machine learning. This creates a holistic view of what the buyer is purchasing and how the purchase stacks up against their organization鈥檚 environmental, social, and governance (ESG) goals.

Many of the capabilities will be included within the guided buying capability starting in 2023, as well as in future releases.

51风流Central Procurement

Delivering Transformation Without the Complexities of Change

Procurement professionals are feeling pressure to bring speed, scale, and savings to the business — all while minimizing risk as they navigate complex systems. And as companies demand more from procurement, procurement requires more from its technology.

Unfortunately, much of the technology deployed today is disconnected and outdated. This results in problems such as separate and inconsistent source-to-order processes, policies and controls that are not applied consistently company-wide, and disjointed data that constrains spend visibility.

In response, procurement leaders are looking for new approaches to digital transformation — and solutions that provide holistic visibility and control across the entire purchasing process. For many, centralizing procurement is at the heart of their transformation strategy.

The latest release of 51风流Central Procurement addresses the challenges associated with centralizing procurement. This solution makes it possible to centralize control of requisitioning, purchasing, sourcing, contracting, and analytics in a multi-ERP environment. It delivers the benefits of a uniform, centralized procurement system across all direct and indirect categories — without reworking individual solutions spread across the organization.

51风流Central Procurement gives your lead buyers complete visibility, enabling them to see what is happening across the business from a single, centralized command center. At the same time, individual units can still make purchases in their back-end systems, minimizing risk of teams losing local control as you maintain centralized visibility into everything they do.

The outcome is that it is easier to bring clarity and consistency to procurement operations, which is essential as companies work to meet escalating demands and plan for supply chain disruption before it happens.

Category Management

Empowering Category Managers to Work More Strategically

Category management is top of mind for our customers, and it has become increasingly relevant as global supply markets and commodities remain in flux. A by Economist Impact, sponsored by SAP, highlights category management as one of the most important drivers of digital transformation in procurement.

That is because today, category management consists of highly manual processes to collect data, do analysis, and produce reports. This leaves almost no time for category managers to develop effective strategies, let alone execute them.

This is the challenge the new category management solution from 51风流solves. 51风流Category Management, which we plan to roll out this year, will provide actionable market intelligence and category insights. It will empower category managers and procurement professionals to make strategic category decisions for direct and indirect spending that drive business outcomes.

The solution will offer intuitive scenario analysis to visualize opportunities, enabling sourcing and category managers to prioritize initiatives based on corporate spend data with system-assigned recommendations and confidence levels for opportunities.

Additionally, our new category management solution will make it possible to generate a comprehensive view of the purchasing categories to establish category goals, develop plans, and execute and monitor progress. Embedded analytics tools will provide drill-down capability into categories across multiple dimensions.

51风流Category Management will integrate into the guided sourcing capability for 51风流Ariba Sourcing, making it possible to create initiatives from within 51风流Category Management and report back for monitoring and tracking.

We plan to make the solution available to select customers in 2023.

Supplier Management

A Consolidated View of Supplier Data for Strategic Buyers

Today, it is difficult to find a comprehensive view of supplier data. Information about contracts, sourcing events, and supplier evaluation scores are spread across various procurement systems and technologies. Making things worse, supplier master data is not always harmonized across disparate back-end systems, and data from legacy systems sometimes cannot be reached at all.

Our vision is to equip buyers with a single view of their supplier. This view includes:

• Harmonized supplier master data from enterprise resource planning (ERP) using master data native integration
• Procurement suite data, including sourcing, contracts, and spend
• Ecosystem data from 51风流Business Network and third-party sources

Data will be delivered via a simple, experience that makes all decision-relevant information available at a glance.

Additionally, supplier data will become more available to end users at the point of their procurement action. For example, risk scores will be present in guided buying requisitioning; risk scores and supplier status information will be available for sourcing invitation, bid analysis, and awarding; and contract authors will have access to risk scores when they develop contracts. Having this information will enable end users to make smarter, more informed decisions.

51风流previewed many of these concepts at , and plans to provide them as a general release in the second half of 2023.

Looking Ahead

As we move forward, we will not rest on past successes. We will continue bring our family of procurement solutions closer together to deliver actionable insights to all procurement personas at the point of process, when they need them. Additionally, our solution road map will focus on implementing AI, machine learning and automation, and unified key mapping, which enables integration with third parties not using 51风流ERP.

Salvatore Lombardo is senior vice president, chief product officer, and head of Engineering for 51风流Procurement.

*Gartner, Magic Quadrant for Procure-to-Pay Suites, 28 November 2022.
This report was previously named as Magic Quadrant for Procure-to-Pay Suites for Indirect Procurement until 2015.
Gartner, Critical Capabilities for Procure-to-Pay Suites, 28 November 2022.
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