Survey reveals secrets of procurement through technology
A survey by The Hackett Group has revealed that finance officers who operate the most effective procurement systems spend more on technology, yet manage to spend less on operations overall.
The research found that world-class procurement executives spend 27% more than their peers on technology – an average of $1.4 million rather than $1.1 million – and yet spend the same percentage less on total procurement operations – 0.74% of expenditure versus 1.01% – and operate with 38% fewer staff.
The ratio of technology to labour costs further illustrates the disparity between different operations, with top companies spending 94% more on technology per labour dollar than the peer group.
Top-class finance executives also allocate 36% more of their overall procurement resources to decision support and risk management. As a result they not only spend less but also have improved cycle times and reduced error rates.
The survey is part of Hackett’s Book of Numbers series. A full copy of the report can be found at https://portal.thehackettgroup.com/portal/index.jsp