Inaugural "State of Source-to-Pay" Benchmark Report Uncovers Gen-AI and Innovation-Powered Future for Procurement Despite Data Disconnect

The first edition of the report by Ardent Partners illustrates procurement professionals' S2P digitization strategies, investment levels, and the barriers preventing them from realizing greater returns.

REDWOOD CITY, Calif., June 20, 2024 /PRNewswire/ -- The new "State of Source-to-Pay Digitization 2024: Navigating Supply Challenges, Embracing Innovation" report by Ardent Partners explores the current Source-to-Pay (S2P) technology market landscape establishing a valuable benchmark for the industry.

As procurement's impact on organizational success has grown, the department's priorities and grown beyond a cost and efficiency focus to also include improving sustainability, mitigating risk, ensuring compliance, and improving cash flow. This broader responsibility, coupled with an increasingly complex market, has greatly increased the importance of technology. S2P solutions can free capacity by increasing automation, improve decision-making through easy access to insights, and enable more efficient, effective collaboration with suppliers and internal stakeholders. However, while most large organizations have digitized a portion of their S2P process, the report shows scope and levels of success vary.

Technology Adoption

While the results of the survey show wide adoption, it is clear that most organizations have only digitized a subset of the full S2P process. Adoption is higher for core P2P technologies such as Electronic Payments (79%) and eProcurement (51%), showing a focus on transactional processes. On the other end of the spectrum, Big Data Management Solutions (17%) and Optimization-based eSourcing (15%) have low current usage but greater planned adoption, highlighting ongoing efforts to address data management and supplier visibility challenges.

Going forward, 30% of respondents expect an increase in S2P operations' technology budget for 2024 compared to 2023, while 13% anticipate a decrease.

Benefits and Challenges

The most successful users of S2P solutions, referred to as "S2P Innovators", demonstrate the value that technology can play in helping scale a procurement operation and maximize its performance. The findings show a wide range of benefits for procurement organizations, especially, greater efficiency (57%) and improved productivity (49%).

However, despite the broad range of advantages gained thanks to S2P technology, many organizations face sizable challenges when trying to capitalize on their investments. In particular, poor data quality and/or access within the technology was identified by nearly half (48%) of respondents as the main barrier. Lack of integration is another prevalent issue both between S2P technologies and third-party systems (34%) as well as across different S2P processes (33%).

Nevertheless, only a surprisingly low 10% place importance on data architecture, quality, and access when selecting procurement and Source-to-Pay technology. Integration to back-end systems was also identified as a priority by a mere 5%.

"The disconnect between the need for high-quality data and the current reality of poor data management and process integration creates a significant hurdle for organizations aiming to extract the full value from their S2P technology.  Without clean, standardized, and readily accessible data and the elimination of silos across S2P, automation is limited, as is the effectiveness of AI and analytics. The risk of missing the AI opportunity is too great for this problem to remain unaddressed," said Vishal Patel, VP of Product Marketing at Ivalua.

AI and Innovation

Despite the "data disconnect" and data management challenges plaguing the industry today, procurement leaders believe they are on the cusp of a data-driven revolution. A staggering 81% of them anticipate a dramatic transformation over the next decade where data's impact will either be massive (38%) or significant (43%).

When it comes to Artificial Intelligence, the majority of procurement professionals (61%) believe AI's impact over the next few years will be transformational or significant. While S2P technologies are gradually gaining greater adoption, a tidal wave of AI implementation is sweeping across procurement, with record numbers embracing the new technology. 2024 results show that 74% of all procurement teams will be using AI by the end of 2024; only 28% of S2P teams are currently using AI but a significant 46% intend to.

"Procurement leaders envision a future where procurement is fundamentally different, driven by data-powered insights and advanced analytics, but it will be crucial for businesses to bridge this data disconnect," continued Vishal Patel. "By focusing on data as a strategic asset and building a clear roadmap towards a solid data foundation, businesses can position themselves to unlock the true potential of S2P solutions in the age of big data and AI for smarter procurement decisions, improved supplier relationships, and greater savings."

To learn more about the State of S2P report, please visit here.

Notes

For the first-ever release of the "State of Source-to-Pay" report, Ardent Partners analyzed the feedback from 382 Source-to-Pay (S2P) Executives through surveys and interviews to explore the current market landscape and the crucial influence of S2P leaders in boosting business resilience and financial prosperity. The report was commissioned by Ivalua.

About Ivalua

Ivalua is a leading provider of cloud-based, AI-powered Spend Management software. Our unified Source-to-Pay platform empowers businesses to effectively manage all categories of spend and all suppliers, increasing profitability, improving sustainability, lowering risk and boosting employee productivity. We are trusted by hundreds of the world's most admired brands and recognized as a leader by Gartner and other analysts. Learn more at www.ivalua.com. Follow us on LinkedIn and X.

SOURCE Ivalua