Digital Procurement Survey 2021

Overview of the study

Purchasing departments are refocusing on their core operations

Cost reduction and supplier sourcing are currently the main priorities in German purchasing departments. Focusing on these issues is allowing companies to secure external resources and improve their financial performance. The COVID-19 crisis has led to a change of strategy in purchasing departments: more than 60% of companies have reconsidered their priorities in response to the crisis. In the short term, the companies surveyed are focusing on cost reduction and risk management; in the medium term, they are looking to reprioritise supplier sourcing, supplier relationship management and digitalisation of processes to prepare for the future.

Digitalisation of processes in procurement is strategic priority number three – after cost reduction and supplier sourcing. This means that digital transformation has remained a fundamental trend despite the crisis – a trend that is also driving agility and resilience.

Digital transformation of procurement processes has been steadily progressing

The level of digitalisation in procurement among European companies has risen in recent years. Purchasing departments are continuing to intensively pursue digital transformation projects by placing an emphasis on digital technologies in the procurement function. Of the companies surveyed, 33% are currently rolling out a digital solution in procurement, while a further 18% are taking the first steps towards a rollout.

Digital solutions can solve business challenges and bring tangible benefits for both the procurement organisation and for the company as a whole. However, companies still have a long way to go to before they can fully exploit all the advantages of digitalisation in procurement.

Making optimal use of digital solutions significantly improves performance within procurement organisations

As the take-up of digital technology increases, so do its benefits for purchasing departments.

Among the companies surveyed, 79% of purchasing departments have seen organisational benefits and improvements in business performance as a result of deploying a digital solution. This is especially true in companies where solutions are well received by users and their features are used to the full.

However, only 22% of procurement departments stated that they are making optimal, sustained use of their digital solutions. In order to enable this, it is essential for organisations to integrate digital transformation projects into a long-term strategy. This requires a certain level of investment to realise the full potential of digital solutions and achieve all of the financial benefits that they can create.

Investments in change management and redesigning processes pay off

German companies are planning to invest heavily in digitalising their procurement processes: on average, they intend to invest €1 million over the next two years.

These ambitious investment plans will help companies to implement their digital roadmaps. They also show the expected return on investment, and how much importance companies attach to digital transformation of the purchasing function.

Purchasing departments also agree that transformation of business processes is crucial to the success of a digital development project. They also firmly believe that the time invested in change management and redesigning processes adds more value to a digital transformation project than the technical aspects of selecting a solution and an integrator.

Dominant digital use cases: now and in the future

Certain digital use cases have become the bedrock of digitalisation in procurement, such as procure-to-pay, source-to-contract, data analysis and data management. These use cases are already the most widely used today – especially in Germany – and they are among the most common investment projects in Europe for the next two years.

However, even use cases that are not yet widespread – such as smart sourcing/relocation sourcing, risk management, and virtual procurement assistants – are also expected to gain traction. The number of users of these solutions in procurement departments is forecast to double over the next two years. Use cases such as these will enable companies to respond to the growing demands for agility and resilience.