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CEOs feel the gap between Procurement and Supply increases risk

A recent study done by Harvard Business Review Analytic Services finds that 60% of 779 business executives  found  a lack of transparency between their procurement functions and supply chains. The study eventually finds that this gap put their businesses at risk of loss and bruised reputation. Further 24% stated that they did not effectively monitor the supplier functions in their companies and 23% revealed their supply chain operations are not connected to their electronic purchase-to-pay systems. A total of 26% projected that improved business transparency could drive up their cost savings and 60% said they would strive to improve transparent practices in their business functions in this year.

The report exposes some interesting trends that need to be evaluated. For instance, the main motivators for the drive towards transparency are efficient decision making, cost-saving and ethical business practise the study found. However, there have been some existing challenges to achieve these targets, the experts said. One major challenge is the manual data entry operations which half of the businesses currently rely upon. It is time-consuming and subject to human lapses. One study done in 2019 found 50% of procurement tasks are driven by manually maintained spreadsheets.

A solution to this slow, error-prone and relatively cost-heavy issue is automated real-time cross-functional data entry which enterprise software solutions offer seamlessly. These enterprise solutions can help businesses efficiently organise, collect and process data in a shorter time, and increase cost-savings. This transition boosts transparency that drives up the company’s reputation among clients and stakeholders as well as internal revenue.

But transitioning to automated enterprise software-driven data processing for procurement functions are not without hiccups and trials. Many smaller supply chains simply lack the organisational structure or capabilities to participate in this automated data entry process. Some may not be willing to trust such a centralised data processing infrastructure of a big corporation. Developing trust and willingness to embrace the more efficient enterprise procurement solutions made easy by these software solutions. As consumer awareness has greatly expanded in the information era, more and more clients and consumers alike want to see dedicated and transparent measures from a company in terms of ethical practices, environmental protection as well as genuineness of its products.

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