Most procurement leaders expect to increase their spending in 2024 and are keen to invest in new technologies—including artificial intelligence—to improve efficiency and strategic capabilities, according to a report from Amazon Business.
Specifically, more than half (53%) of business respondents in a survey expect their budgets to increase in 2024. That follows a year of focusing on reducing costs, thus allowing them to now use the funds they saved to invest in approaches to optimize their procurement processes and operate more strategically. The top challenges they face the efficiency and complexity of procurement, the survey showed. And to cope with those difficulties, 98% said they were planning investments in analytics and insights tools, automation, and artificial intelligence (AI) over the next few years.
The results come from the “2024 State of Procurement Report” produced by Amazon Business, which is the online retailer’s arm that offers business-specific product selections and procurement tools to organizations from sole proprietorships to large enterprises, governments, schools, and healthcare organizations, the company says.
“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” Alexandre Gagnon, vice president of Amazon Business Worldwide, said in a release. “Heading into 2024, the procurement function is now cross-disciplinary, spanning both functional and strategic purviews as buyers are planning to invest more in technology and optimization while future-proofing their companies and organizations. Ultimately, procurement not only keeps operations running, but plays an integral role in achieving key organizational goals, and with smart business buying, companies have procurement solutions to serve as a growth lever for organizations.”
The report also found that:
- 95% of decision-makers acknowledge that there’s room for procurement optimization.
- 85% of respondents say the difficulty of sourcing suppliers that follow sustainable practices prevents their company from setting or achieving strategic sustainability goals for procurement.
- 81% of respondents had mandates to buy from certified sellers, which might include sustainable, local, or disadvantaged group-owned businesses. Among those without mandates, 40% still consider supplier environmental, social, and governance (ESG) factors. Despite the desire for responsible purchasing (85%), difficulty finding sustainable suppliers hinders sustainability goals.
The 2024 Global State of Procurement Report was fielded online from June 6 to July 14 among 3,108 procurement decision-makers and senior leaders familiar with procurement operations at their organization. Respondents were located in France, Germany, Italy, Japan, Spain, UK, and U.S. Respondents spanned nine industries and all commercial sector respondents worked at organizations with a minimum revenue threshold set by geographical region.
