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Digital Procurement Survey 2019

Turkey has embraced digitalization in procurement area, and while its digitalization rate is lower compared to European countries, it has the potential to be the leader in Europe with its appetite for success and planned investments for the future.

 

"Digital applications have recently become an integral part of procurement and supply management, affecting almost all procurement and Supply management processes. As PwC EMEA, I am proud to present the results of our European Digital Procurement Survey. In total, we have received over 200 responses from survey participants with various leadership roles in procurement departments from 20 European countries.  Our sincere thanks go to all the Turkish procurement departments who agreed to answer our questions as ~25% of the total responses."

Dr. İsmail Karakış


The results of the survey shed light on procurement department priorities, while providing an overview of digitization and investment prospects. The survey was conceived as a tool for companies to gauge their digital maturity with respect to their business sector and size, and to benefit from examples of real-world applications, such as Source-to-Pay, artificial intelligence, Industry 4.0, data analytics and automation.
 

   

Key takeaways:

Digitization is a strategic priority across Europe

- Regardless of the country, sector or business size, procurement departments’ number two priority is to digitize their processes, with streamlining their organization only just taking first place. Talent management and developing supplier collaboration rank next in importance.

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Digitization is well on track

- In line with 2017 findings, service-sector businesses are in the lead. Three out of seven of their processes are now digital, as opposed to two out of seven for industry. Digitization is set to expand as it is deemed a strategic priority (priority no. 2) in which companies will continue to invest.

- SMEs are slower to embrace digital procurement processes, with only 1.5 out of 7 already digitized. For these companies, the shift to digital is not strategic, although upwards of 80% plan to invest.

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The digital leap forward in "strategic" processes

- 60% of companies have started digitizing strategic procurement processes – strategic sourcing, predictive analytics and supplier collaboration tools – compared to 21% in 2017 (a 39-point increase).

- For transactional aspects – Source-to-Pay, contract preparation and spend trackers – nearly 75% of companies are currently adopting digital solutions. In line with 2017 findings, these processes take priority.

 

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Companies aspiring to roll out technological solutions is set to double

- 80% of companies are currently deploying Source-to-Pay solutions and nearly 90% intend to continue investing.

-  On average, 33% of companies have tested AI, automation and Industry 4.0 solutions, of which 65% intend to invest in these technologies. The survey suggests that the number of AI users will increase by a multiple of 2.3.

- Conversely, attitudes towards blockchain are mixed, with only 14% of companies having carried out tests, of which 60% consider it to be unsatisfactory.

- Backed by these observations, we have devised a digital maturity curb.

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What lies ahead?

- 78% of companies, regardless of their sector or country, stated their intention to invest in at least three digital solutions.

- Those companies having already rolled out such technologies are faced with acquiring the related skills, which has proved the number one setback for the projects’ success (before change enablement and sponsorship). In keeping with the findings of the 22nd CEO survey,* shortage of skills is a major concern for companies.

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6 6 G G ] d d d d ] ] d d D D ] ] European Among the most represented:* France Turkey Netherlands Italy Germany Norway Belgium 1 6 themes 20 200 Over responses countries * Other European countries: Albania, Austria, Bosnia Herzegovina, Denmark, Finland, Greece, Liechtenstein, Luxembourg, Malta, United Kingdom, Sweden, Slovenia, Switzerland Company profile 45% 27% 28% Large corporations Revenue over 5bn€ SMEs Revenue under 500m€ Middle-market companies Revenue from 500m to 5bn€ Respondents profile Chief Procurement Officers (CPOs) Purchasing Directors Other Industry Services Sector 65% 35% 33% 38% 29% An online questionnaire on digital procurement processes and technological drivers (S2P, AI, automation, etc.) Conducted between November 2018 and January 2019

Close up on Turkey

  • Turkey has come to grips with the issue of digital transformation: for Turkish procurement departments, establishing a customized, sustainable and connected supply chain is the number one priority, before reinforcement of supplier collaboration and digitalization of extended processes.
  • Procurement departments are well on their way to digitizing their processes (2.73 out of 7 processes have already been converted, in line with the European average).
  • Turkish companies are close to the European average in terms of the digitalization of procurement processes, in particular system implementation of P2P tools. Turkey has high investment appetite for adapting the new technologies like blockchain, Industry 4.0, etc.
  • Investment for digitalization of procurement departments is set to continue in Turkey, 36% of procurement processes in Turkey are already digitalized in line with the European average which is 37%.

Turkish procurement departments are aware of the importance of digitizing purchasing processes and view it as a top priority.

Reinforcement of supplier collaboration stands out as the second most important priorities of procurement departments in Turkey with 14% ratio which contrasts with other European companies that have 11% and demonstrates that Turkish procurement departments are making their digital transition.

Contact us

Serkan Tarmur

Serkan Tarmur

Advisory Services Leader, PwC Turkey

Tel: +90 212 376 5304

İsmail Karakış

İsmail Karakış

Consulting, Supply Chain Leader, PwC Turkey

Tel: +90 212 326 5365

Tolga Baloğlu

Tolga Baloğlu

Advisory Services Partner, PwC Turkey

Tel: +90 212 376 5365

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