More Collaborative Supplier Management Provides Significant Competitive Advantage in Volatile Markets, Ivalua-Commissioned Study Shows

• 79% of businesses say procurement is increasingly asked to support more objectives, including top and bottom-line financial performance
• Procurement agility is being limited by a lack of executive mandate/support, an inability to access needed insights to make timely, informed decisions, and existing solutions being too rigid to support new and evolving requirements
• Ensuring supply continuity has forced 73% of businesses to compromise on other objectives, including supplier due diligence (76%), exposing businesses to unknown risk
• Inflationary pressures on profitability mean cost control remains a high priority
• 78% of respondents report that they collaborate more with suppliers than before the pandemic and make meaningful efforts to establish themselves as customer of choice (81%)

REDWOOD CITY, Calif., May 17, 2023 /PRNewswire/ -- Research from Ivalua, a leading global spend management cloud provider, has revealed that businesses are increasingly focusing on top line growth and turning to procurement departments to support more objectives (79%) than in the past as suppliers become more important to achieving business objectives. Yet challenges are limiting procurement's agility in today's volatile market and forcing tradeoffs between different priorities. 73% indicated that they have compromised on other objectives to ensure supply continuity in the past year, and 76% have compromised on supplier due diligence, exposing businesses to unknown risk.

The study, titled "Procurement: A CEO's Secret Weapon for Growth and Resilience in Turbulent Times", which was conducted by Forrester Consulting and commissioned by Ivalua, outlines successful strategies being followed by organizations to support their top business objectives, and the challenges holding them back. Procurement is contributing most by driving sustainability efforts through increased supplier collaboration, identifying and enabling new revenue opportunities, and reducing product costs to increase competitiveness.

While procurement is playing a greater role in supporting top line growth than in the past, inflationary pressures mean cost control remains a high priority. The top strategies being applied to mitigate the effects of inflation on profitability are finding new, lower cost sources of supply (32%), increasing operational efficiency (31%), and collaborating with existing suppliers to find ways to reduce total costs (30%).

Businesses are increasingly partnering with suppliers to support their top objectives

With suppliers playing an increasingly critical role in business success, particularly in volatile markets, organizations are engaging them more closely. 78% indicated they collaborate more with suppliers today than prior to the pandemic, and 81% stated that their organization makes significant efforts to establish themselves as customer of choice. In the past year, 50% have increased information sharing with suppliers and 45% collaborated with suppliers to launch new products or services.

"How businesses engage with and manage their suppliers can be a significant competitive advantage in today's market," comments Alex Saric, smart procurement expert at Ivalua. "As a result, procurement leaders must be included in boardroom discussions and their teams given a clear mandate and the resources needed to succeed."

Technology is playing a greater role but must become more flexible

According to 53% of respondents, the top supplier strategy implemented in the past year was implementing systems to better manage supplier performance and risk (SRPM). Over half are investing in SRPM solutions, either as part of a broader Source-to-Pay (S2P) suite or as niche solutions.

However, existing technology solutions often limit agility. 39% indicated that existing solutions are too rigid to support their ways of doing business or evolving requirements and were a top obstacle to procurement becoming more agile. Specifically, respondents indicated that S2P technology needs to offer increased flexibility to quickly support new processes or data requirements (31%), better integrate with other internal systems (30%), enable broader and more efficient collaboration with suppliers (28%) and bring more varied types of supplier data together to support more complete analysis (27%). 

"Technology is a critical enabler of effective supplier management strategies, providing the data needed to assess and monitor suppliers and the ability to collaborate efficiently with them," said Saric. "Yet many of today's solutions deliver speed at the cost of agility. Given rapidly evolving market conditions, regulations and business priorities, leaders must evaluate technologies based both on their ability to meet today's requirements and their flexibility to quickly support new processes and data."

To download the Ivalua "Procurement: A CEO's Secret Weapon for Growth and Resilience in Turbulent Times" study, please visit: https://info.ivalua.com/forrester-procurement-ceos-secret-weapon-en

About the research

The study was conducted by Forrester Consulting in April 2023 on behalf of Ivalua. It is based on a survey of 470 procurement decision-makers at companies with 1,000 or more employees in North America, Europe, and Asia Pacific.

About Ivalua

Ivalua is a leading provider of cloud-based Spend Management software. Our complete, unified platform empowers businesses to effectively manage all categories of spend and all suppliers, increasing profitability, improving ESG performance, lowering risk and improving 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.

SOURCE Ivalua