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New Research: 1 in 3 Finance and Accounting Professionals Admit B2B Procurement Is BrokenZip, the world's leading intake-to-procure solution, today announced results of the 2023 Trends in B2B Purchasing survey of 1,056 U.S.-based finance and accounting professionals - director-level and above. Respondents are overwhelmingly eager to move the procurement process away from legacy approval workflows and communication methods and towards automation to improve B2B purchasing efficiency and unlock new levels of spend visibility and control. The majority (79.4%) of respondents said their company faces challenges when purchasing B2B software and services and nearly one-third (32.1%) of respondents describe their B2B purchasing process as broken. This appears to lead to significant corporate risk and weak spend controls, with half of respondents agreeing that stakeholders (e.g., executives, finance, legal, IT, security, etc.) lack sufficient visibility into their company's purchasing and approval process. It follows that a majority of respondents (70.9%) also believe most of their process for initiating purchase requests and approvals for B2B software and services should be automated. The research uncovered a plethora of B2B purchasing challenges and evaluated the opportunity for organizations to improve procurement and accounts payable. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230117005172/en/ Challenges in B2B Purchasing Lead to Lack of Control Over Vendors and Costs Despite the high volume of purchase requests and approvals, many respondents in the 2023 Trends in B2B Purchasing research say their business is still using outmoded tools and communication methods in their procurement processes. A majority of respondents rely on legacy forms of communication to manage initial purchase requests for new software and services-including phone calls and texting (60.2%), Microsoft Excel (56.8%) and email (53.2%). The same is true for managing approvals of purchase requests, with email (49.2%), Microsoft Excel (47.7%) and Microsoft Teams (30.1%) listed as the top three tools for communication. Perhaps as a result of increasingly lean procurement teams and the use of these outdated tools and processes for purchasing, respondents concur that there is a lack of communication and clear processes across both employees and stakeholders. While a majority of respondents (71.3%) indicated they have a uniform process for employees to initiate a purchase request or renewal, more than one-third (34%) of those respondents reported their employees are largely unaware of the process. These process challenges appear to ultimately lead to a lack of control over vendors and costs, with subpar levels of PO-backed spend and evidence of employees going around the process.
New challenges have also risen in the accounts payable process. One in four respondents (25.6%) stated that their company does not have accounts payable automation software in place. When it comes to payment methods, employees will most frequently use their managers' corporate credit cards to complete payments for third-party software and services vendors. This can create an unnecessary burden on the cardholder and create confusion down the line if the payment is not recorded accurately. Additionally, 73.1% of respondents claim their accounts payable teams struggle to ensure that purchase orders and invoices match. Data cleanliness - which refers to the reliability and accuracy of data - is a challenge for 64.1% of respondents when paying third parties for software and services. The botom line: Respondents are facing tremendous challenges when purchasing B2B software and services. The top three reported challenges include struggling with employee experience (35.5%), slowed purchasing process (34.4%), and friction between employees and the procurement or purchasing team (29.7%). B2B Purchasing Improvements Can Yield Significant Business Impact Businesses are looking to make improvements to the purchasing process that will contribute to key business objectives - from reducing operational costs to increasing employee productivity and boosting overall efficiency. If procurement and purchasing processes were improved, many respondents believe they could achieve key business objectives, including increasing operational efficiency (42.7%), improving finance team productivity (37.5%) and improving employee productivity (38.7%). The top B2B purchasing priorities for the coming year include increasing efficiency and team productivity (62.6%), ensuring compliance with financial regulations (48.7%) and ensuring compliance with security and privacy regulations (48.2%). Almost half (47%) of organizations are looking to realize more than 20% in operating expense savings in the next year and almost all companies (91.6%) are looking to achieve some level of operating expense savings in 2023. Automation Can Improve Operational Efficiency and Employee Experience Many respondents say their company already uses some form of automation in their purchasing process - either through the use of general purpose automation tools (39.7%), enterprise resource planning (ERP) solutions (39%), in-house software tools (38.1%) or procure-to-pay (P2P) software (34.3%). These tools remove manual work from the B2B purchasing process and aid in optimizing operational efficiency. However, even companies that are embracing automation still require better solutions to improve their processes. Of the respondents who reported they have a fully automated process in place, 29.4% indicated that the employee experience still needs to be improved. While nearly 1 in 5 (17.8%) respondents said there is no automated purchasing process in place, a majority (70.9%) believe most of their process for initiating purchase requests and approvals for B2B software and services should be automated. The vast majority (86.9%) of respondents said it would be beneficial if their company could use an all-in-one software solution to manage the procurement process for B2B software and services from the initial purchase request through payment to third-party vendors. There is a clear preference for all-in-one solutions, or solutions that can orchestrate the end-to-end B2B purchasing process across the procurement tech stack. Businesses Seek to Combat Inefficiency in the B2B Purchasing Process In the face of economic uncertainty, finance and accounting professionals are carefully evaluating ways to improve their operational efficiency and reduce the complexity of their processes-particularly in light of today's increasingly distributed purchasing landscape. The 2023 Trends in B2B Purchasing research found there to be an unsustainable combination of complex approval processes, high volumes of purchase requests and lengthy approval timeframes. Managing spend has become a convoluted and lengthy process.
Given this complexity for cross-functional approvals, it's no wonder that 62.6% of respondents say increasing efficiency and team productivity are top priorities for the coming year. "Over the last several years, the digitization of back-office processes has allowed businesses to achieve greater operational efficiency, better positioning them to weather current economic headwinds. However, the end-to-end procurement workflow is one process that remained stagnant for over a decade. It is becoming ever more critical given the renewed focus among finance leaders to reduce costs and mitigate business risk," said Rujul Zaparde, co-founder and CEO of Zip. "Finance and accounting professionals report that they are having a hard time keeping up with inbound procurement requests due to broken processes. Purchase requests are stacking up and getting lost in long, convoluted approval workflows. This can make it hard for procurement teams to avoid unnecessary costs and for security and legal teams to keep risk under control. The research found that modernizing procurement processes can have a significant positive impact on the business - from improving operational efficiency and productivity to addressing the heightened concerns of controlling costs and mitigating risk." To learn more about the 2023 Trends in B2B Purchasing research, download the report and infographic or read our blog post. Resources:
About Zip Zip is the world's leading intake-to-procure solution. Providing a single platform for any employee to initiate a purchase or vendor request, Zip helps businesses gain clear and timely visibility across all purchases, while dramatically improving the employee experience. The platform's no-code configuration and intelligent workflows integrated across disparate systems enable businesses to automatically route requests for faster approval across finance, legal, procurement, IT, security and other teams. Leading enterprises and high-growth startups like Databricks, Canva, Airtable, Webflow and over 175 others use Zip to streamline their procurement processes while delighting their business users.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230117005172/en/ |
