Between innovation, efficiency and AI: 2024 as seen by procurement experts

Returning to the situation in Italy, the report confirms that administrative processes related to procurement are particularly 'time-consuming' and consequently create a barrier to teams wanting to be more agile. In particular, Chief Procurement Officers are confronted with obstacles of various kinds in order to achieve their growth targets, from the inflationary spiral to the lasting risk of recession via increased competition, the latter being a mainly Italian concern.

As far as internal challenges within organisations are concerned, at the top of the list are the complexity of systems and the excessive spectrum of suppliers to manage, also in contractual terms. In this regard, 44% of Italian purchasing managers confirm that their day is often loaded with cumbersome and time-consuming processes (especially in the area of reporting) and leaves very little time to devote to what really matters to the company.

The procurement function, in short, is looking for new ways to improve and simplify back-office operations and while it has to contend with staff shortages, it also has a (great) opportunity to evolve to drive greater efficiencies on the ground while improving the employee experience, both inside and outside the procurement office. A significant number of organisations recognise the need to transform digitally but, as the authors of the report clearly note, there is certainly room to do better: only half of the organisations sampled, for example, said they would be using digital invoices during 2023. While technology is set to become a procurement priority, the baseline currently sees only 62 per cent of organisations making use of analysis or reporting tools, while only 54 per cent of companies have already adopted systems to automate manual processes.

Very interesting, from a prospective point of view, however, are the adoption rates of artificial intelligence-based solutions to support purchasing decisions and voice recognition technologies, which are now used in 47% and 41% of cases respectively. AI, in short, has already peeped into procurement, and it is significant that almost all the managers surveyed are interested in learning about the potential of machine learning, especially with regard to the possibility of faster or deeper data analysis, time savings for the benefit of increased productivity, and smoother connections between different systems.

Slightly less than half of the respondents (45% to be precise), moreover, said they were willing to integrate artificial intelligence into procurement processes right away and 80% would do so within two years. Overall, purchasing managers have become aware of the value that digital tools can bring and of the need to change pace quickly (laggard companies will fall further and further behind those that move faster in terms of innovation) but they have also reiterated a clear need. That of finding the right balance between process improvements linked to technological innovation and data security.