Globality, a leading enterprise AI company, has released its latest benchmark study, “2023 Research Insights for CFOs,” which is a wake-up call for Global 2000 companies to transform their outdated buying processes. The report highlights the urgent need for organizations to combat inflationary pressures with autonomous sourcing technology to cut costs and reduce operating expenses.
The findings are based on surveys of global procurement leaders and suppliers across a broad range of industries, including financial services, technology, pharmaceuticals and life sciences, telecommunications, consumer goods, and retail among others.
The research found 82% of procurement leaders say their indirect spend is not well managed during the sourcing process, leaving substantial cost savings on the table.
Indirect spend is estimated to equal 20% to 40% of revenue, and is usually recorded under Selling, General and Administrative expenses (SG&A). In a typical Global 2000 company, this translates into costs amounting to billions of dollars. Despite this, many organizations mistakenly assume that they have their indirect spend under control, whereas the actual situation is often very different.
While finance executives are already struggling to keep a lid on rising costs, the study reveals that two-thirds of suppliers (68%) report increased demand for their offerings compared to the past year and nearly half (43%) are planning to increase prices in 2023.
“These findings highlight an important lesson that is constantly being ignored – that current procurement processes are archaic and inefficient,” said Joel Hyatt, Globality Co-Founder, Chairman and CEO. “The big legacy software companies have not invested in technological innovation for decades. With the new corporate imperative to cut costs and reduce OPEX, companies must implement proven autonomous technology that saves money on day one.”
Click here to read the full 2023 Research Insights for CFOs.
