Unlocking the True Potential of Digital Procurement

How Leading Procurement Teams Leverage Digital Tools for Efficiency, Transparency, and Sustainability

In an era of heightened economic uncertainty and rapid technological advancements, digital transformation is no longer optional—it's essential. PwC’s latest Digital Procurement Survey, encompassing insights from around 1,000 companies across 60 countries, underscores this urgency and sheds light on how leading procurement teams are driving success through digitalisation.

Financial Performance Remains Paramount

According to PwC's survey, financial performance tops the list of strategic priorities for procurement departments, with 65% naming cost control as their number one focus. However, as procurement becomes increasingly central to navigating supply chain disruptions, cost management now shares the spotlight with other strategic imperatives.

"Financial performance remains critical, but today's procurement leaders also heavily prioritize sourcing strategy and digital transformation," explains Redha Shukor, Partner at PwC South East Asia Consulting.

Accelerating Digital Transformation

The survey highlights digital transformation as the second-highest strategic priority, underscoring the procurement sector’s ambition to harness digital solutions for significant operational improvements.

"Procurement departments expect tangible results from digital transformation, particularly in efficiency gains, transparency, and compliance," states David Hodge, Digital Procurement Leader at PwC South East Asia.

Key Drivers of Procurement Digitalisation

PwC identifies three main drivers fueling procurement digitalisation:

• Efficiency Gains: Quantifiable benefits in productivity and cost savings.

• Transparency and Traceability: Enhanced visibility and fairness throughout procurement processes.

• Procurement Performance: Improvement in strategic sourcing and operational effectiveness.

The survey further reveals user experience as an emerging critical factor, essential for maximizing adoption and effectiveness of digital solutions. A PwC procurement transformation expert notes, "Success depends significantly on the quality of user experience, not merely the technical superiority of solutions."

ESG Moves to the Forefront

Environmental, Social, and Governance (ESG) considerations have significantly risen in procurement agendas, with 59% of respondents now prioritizing environmental risk management. Notably, half of the surveyed companies now actively monitor their suppliers' carbon footprints—a dramatic increase from previous years.

"Effective ESG risk management isn't just compliance—it's fundamental to securing long-term sustainability and resilience," adds PwC’s Director & Procurement Digital Transformation Expert.

Digital Tools: Now a Procurement Necessity

The survey indicates near-universal adoption of Source-to-Pay (S2P) solutions among leading firms, with 96% utilizing procure-to-pay solutions and 92% employing source-to-contract solutions. The rapid uptake underscores these tools' perceived value in improving procurement efficiency and compliance.

Furthermore, Contract Lifecycle Management (CLM) tools are rapidly gaining traction, with 50% of companies planning further investment over the next three years. "CLM tools provide clear advantages in compliance, cost management, and risk mitigation," states PwC.

The Human Factor in Digitalisation

Despite the technological advancements, PwC’s research emphasizes the importance of organizational factors—clear definition of requirements, effective change management, and executive sponsorship—as key success elements for digital procurement projects.

"Clear business requirements and robust management engagement are foundational to successful digital transformation," notes the PwC expert.

Looking Ahead: The Future of Procurement

By 2027, procurement departments aim for a 70% digitalisation rate for their processes, reflecting optimism about digital transformation’s potential despite recent stagnation driven by economic uncertainties.

"Procurement departments must continue to invest strategically, particularly in data analytics and risk management capabilities, to maintain their competitive edge," concludes PwC.

How is your organisation navigating digital procurement challenges and opportunities? We'd love to hear your insights and experiences in the comments.