Impacts of Automation and Digitisation on Finance and Procurement 

A report, written last year by The Economist Intelligence Unit, and based on a survey of over 400 finance and procurement executives in the US, UK, France and Germany finance and procurement executives identifies which aspects of automation and digitisation they expect will affect their companies most; what their impact will be; and how they have prepared. 

We’ve pulled out a few talking points and insights that we find especially relevant to our world of indirect IT procurement. In preparing for an automated future, finance and procurement departments’ most common response is to increase technology budgets, with 39% taking this action, a logical response if more tasks are to be performed by technology. 37% are making sure their internal operations are ready for automated processes and 35% are revising their procurement processes too. 

However only 9% of respondents believe that automation of procurement decision-making will have the greatest impact. Decision making of higher functions seems immune from automation, for now at least. 

Automation trends, their impact and how companies have responded

Note: Bubble size represents proportion of respondents choosing answer. Source: The Economist Intelligence Unit 

The report confirms what is obvious to most of us in IT procurement industry, that digital transformation has become the defining ambition guiding IT strategy and investments.  

“In the face of growing competition from digital rivals, companies have come to see developing the skills, culture and business models required to make maximum use of digital technology as no less than a matter of survival. Finance and procurement executives are optimistic that they can meet the challenge, the survey reveals. Specifically, just over three in five survey respondents (61%) believe that their finance and procurement functions are prepared for the impacts of digitisation within the next 18 months. When asked to identify the dimensions of digitisation that will have the greatest impact on their organisation, 21% answered “digital transformation of internal operations across the organisation”, the most common answer. This was followed shortly by “digitisation of procurement processes” (20%).” 

As an example, the report suggests what Rainer Krug, head of global finance and procurement for KWS, needs most is a global overview of “the right price” for products sourced internationally. Rainer claims the potential of digitisation in procurement is its ability to give him oversight of spending across the organisation, “We need big data in procurement,” he says. “Technology will help us in procurement [by] giving us a baseline for negotiation.” 

Most respondents believed that digitisation will bring about an overall reduction of costs. While 17% expect digitisation to increase costs, almost double (32%) believe the opposite. 

To read the full report, visit: What’s now and next for finance and procurement? Automation, digitisation and the future of global trade