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Procurement Statistics – 24 Key Figures of 2023
- Artificial Intelligence in procurement will drive to increased revenue by the end of 2023 and for years to come.
- The world lacks procurement professionals which drives to procurement workload by 10.6% in 2023.
- Traditional and e-procurement processes are just the same – only difference is that the latter have an automated system and programming to do tasks usually done by procurement professionals. Thus, e-procurement systems only make the entire procurement process easier.
Professional procurement managers sometimes hate talking about procurement statistics. And you’ll soon find out why.
For this article, we are going to try to take procurement statistics at a different level. We will understand how the figures stand for this year 2023 and learn whether procurement will remain strong in the coming years and the next.
After this article, you’ll probably come to love procurement statistics. Or not.
The 24 Key Procurement Statistics Figuresof 2023
Procurement is now getting popular due to its potential for companies to gain cost-saving opportunities when streamlined. Here are some of the latest procurement statistics for 2023!
1. The US Federal Government Accounts for Billion-Dollar Climate Change Impact in 2023
During the first two quarters of 2023, the US already suffered a $23 billion loss due to weather and climate disasters, so the Biden-Harris Administration plans to take actions and invest in climate.
Moreover, US President Joe Biden re-established an Interagency Working Group (IWG) and assigned them to identify areas of procurement, budgeting, and other key decisions where sub-agencies and departments will consider the Social Cost of Greenhouse Gases (SC-GHG) which is a metric for common greenhouse gas emission damages.
2. Procurement Software Market to reach $9.5 Billion in Value by 2028
Given the rise and need for digitalization and the automation of procurement process, the rise of e-procurement technology, software, and tools are a big help in driving the growth prospects for the global procurement software this year and for the years to come.
As per the Verified Market Research, the entire procurement software market size is to be valued at $9.5 billion by 2028 with a CAGR of 7.6%. Thus, the development of the market will also project the increase of the flow of international and global business transactions, especially procurement.
3. Rise of AI Software will Drive Global Revenues to Reach $126 Billion by 2025
Artificial Intelligence or AI optimizes the capabilities of machines and various technologies by simulating smart human behaviors such as analysis and making well-informed decisions. Thus, the promising aid of the AI led big companies like Google and Amazon to invest in the advanced technological systems.
With that, Statista published a report that presents the global AI software market to grow rapidly and will reach up to $126 billion in value by 2025 which is a big difference today at 2023.
4. 2023 Survey Says that 57% of Businesses See Better Decision-Making Based on Risk Insights Results from Risk Management and Mitigation Technologies
PWC’s 2023 US Risk Perspectives Survey found that risk professionals view risk mitigation and management tools a huge help in making better decisions driven by insights provided by the aforementioned technologies.
Although the effectiveness of risk management actions are uneven and inconsistent due to the fact of having different risk natures and characteristics, more than half of the surveyed risk-expert proponents highlighted the importance of risk mitigation and management planning. It guides them on what kind of decisions to make to streamline business operations.
5. 74% of Supply Chain Leaders Increases and will Continue to Increase Investment in Supply Chain Technology and Innovation in 2023
According to the report made by the 2023 MHI Annual Industry Report entitled, The Responsible Supply Chain: Transparency, Sustainability, and the Case for Business, a total of 74% of global supply chain leaders are currently increasing their supply chain technology and innovation investments.
Moreover, out of the 74%, 90% are already and/or planning to spend over a million dollars by the end of the 2023, while the remaining are looking forward to spend over $10 million. In addition, the said supply chain technology innovation includes providing solutions for improved supply chain resiliency, sustainability, and transparency to encourage mitigation of workforce shortage.
6. Global Organizations to Have More Than 50 Suppliers to Improve Procurement Processes in 2023
Due to the modern complexity of the supply chains, the risks also increase in number, especially those that come with suppliers. Moreover, one of the best solutions businesses and organizations came up with is having multiple suppliers for their procurement departments and professionals to work with.
Based on an international survey, over 71% of companies and organizations see that having at least 50 suppliers will help them effectively ensure that their supply chains are running smoothly and aid them in managing supplier relationships.
7. Supply Chain Risk Management Delivers Over 70% Additional Company Brand Value
In the same report as the previous statistics, in 2023, companies acknowledged that proper supply chain risk management planning can add up to 70% additional value to reducing costs and unnecessary expenses.
With that, it highlights how important risk management is, especially to the first stage of the entire supply chain which is the procurement process.
8. 83% of International Businesses Prioritize Improving Customer Satisfaction and Experience by Highlighting Customer Service
Procurement processes do not only start and stop at acquiring goods and services from suppliers at the best value. It also includes having to prioritize customer satisfaction and acknowledging the importance of it to impact a company’s brand image and reputation.
Furthermore, according to Gartner, it is found that 83% of global businesses in 2023 find the development of customer-centric procurement and supply chains important to bringing their companies great reputational value. Thus, it is their goal to improve customer experience by enhancing customer service platforms and varied satisfaction options that best suit the unique needs of other customers.
9. Statista Reports a Projected Alarming Amount of Global Plastic Waste of 350 Million Metric Tons this 2023 and to Triple by 2060
Although sustainable practices are executed in various companies, plastic waste is still one of the biggest issues faced by our planet today. Its impacts include destroying our eco-systems, harming wildlife, and negatively affecting human health.
In a report made by Statista last August 2023, the recorded amount of plastic waste reached up to 350 million and has a huge possibility of tripling by the year 2060. With that, it can be noted that the world will eventually not be a safe place to live in after about 40 years.
10. The Supplier Relationship Management (SRM) Software Market will Continue to Increase in Millions between 2023-2030
The global supplier relationship management software market already earns millions and is set to earn more by the year 2030. Although it is not necessarily recorded in specific values, the significance of this technology cannot be ignored.
SRM software help companies and organizations not only develop SRM, but they also improve market accessibility and the consistent delivery of raw materials, goods, and services.
11. Procurement Workload Increases by 10.6% in 2023 and Widens Productivity Gap Due to Lack of Professionals
As the world calls for an increasing number of global businesses annually, the procurement workload also increases despite the lack of procurement professionals and experts in the field.
The Hackett Group reports a 10.6% increase in procurement needs of companies globally. This also counters the increasing productivity gap of 7.4% and effectiveness gap of 7.8% which are predicted to grow with the lack of procurement experts in the business industry. Moreover, this only reflects the widening of procurement priorities with little-to-no human workforce and lesser amounts of operational budget.
12. The Spend Analytics Market is Expected to Reach a CAGR of 17.9% by 2027
Spend analysis is a crucial component in a procurement process. It helps companies mainly gain perspective and control over their expenses, especially in purchasing raw materials from various suppliers. Aside from that, it also helps companies move to more efficient business operations and strengthens supplier relationships.
Thus, Mordor Intelligence reports that the market is studied and found that it is expected to have more opportunities to expand in the next few years due to the increasing popularity of mobile applications and the increased demand for cloud computing technologies concentrating on giving smart analytics. From 2023 to 2027, the forecasted increase is recorded at a CAGR of 17.9%.
13. Actual Supplier Spend Across 466 Companies in More than 15 Industries Reach Up to $1.4 Trillion
As part of their annual statistics report, Supplier.io released the number of $1.4 Trillion in total spend data across 466 companies in more than 15 industries including education, business services, manufacturing, and others.
Furthermore, to expound on this, the average diverse spend having multiple suppliers reached up to a rate of 17.8%. Moreover, these findings are a huge help in providing key insights and opportunities to save costs.
14. Lack of Supply Chain Resilience: Only 57% Surveyed Companies Have Supply Chain Risk Mitigation Plans
Brought by the COVID-19 global pandemic, supply chains are still challenged to go back to business operations pre-pandemic. As reported by the BCI, on average, only 57% of global key suppliers have Business Continuity plans in place–meaning 43% of them do not have any supply chain risk mitigation arrangements in case a disruption like the pandemic occurs again.
To support that, one of their findings also showed that 49.6% of their proponents from their survey do not check or validate their suppliers’ continuity plans against supply chain disruptions. In addition, although this is still a low number, it is an improvement on pre-pandemic figures.
15. Cyberattacks and Data Breaches are Expected to be the Top Threats to Supply Chains in 2023-2028
Part of their findings, the BCI’s report for Supply Chain Resilience 2023 showed that despite having the cyberattacks only 6th in the top threats in 2022, it rose to the most threatening challenge to supply chain commands globally.
With that, this threat is mostly caused by a lack of talent and procurement professionals with 46.8% of their survey respondents reported to be affected by this. On the other hand, only 39.7% expect this to be a concern over the next 5 years.
Thus, this insight can be used by companies, especially with vulnerable supply chain risk mitigation plans to take causal action against potential data breaches as early as now in order to ensure business continuity.
16. 83% of Surveyed Chief Procurement Officers Prioritize Procurement Digitization
As the technological advancements take over the world bit-by-bit, Zipido reports that in the closing of the third quarter of 2023, 83% of global CPOs consider digitizing their procurement processes.
In line with that, they see the importance of automating procurement processes in order to streamline business operations and ensure a steady flow of the entire supply chain. More than that, the figure also shows that the dynamic wave of digital transformation greatly impacts the business industry and moves to leave traditional processes behind in order to adapt a more innovative approach. Thus, it slowly shapes procurement into modernism.
17. 173 UK Companies Reported Procurement Fraud Up by 13%
Procurement fraud is described to be either the misuse of funds or the procurement professionals’ abuse of power when acquiring goods or services from respective suppliers. Moreover, in a recent research conducted by Accuracy, an independent advisory firm, the number of reported procurement fraud in the UK jumped from 153 in 2022 to 173 in 2023.
Furthermore, Accuracy director, Robert Maluf, highlighted that the increasing number of procurement fraud in the country is due to the Ukraine-Russia war with many businesses are forced to find alternative suppliers unaffected by the said disruption within a narrow period of time. Thus, either voluntarily or involuntarily, procurement employees may have not conducted great diligence and productivity as they normally would which opens an opportunity for fraudulent activities to take place.
18. Overall US Purchasing Managers Employment to Decline by 6% by 2032
A recent study conducted by the US Bureau of Labor Statistics showed a decline of 6% of overall employment of purchasing managers and purchasing agents in the US procurement teams of companies. Moreover, despite this figure, there is a projected number of up to 45, 000 job openings for purchasing managers, buyers, and purchasing agents annually starting from 2024 to 2032.
So, this figure gives insights for companies to emphasize hiring of purchasing managers to strengthen procurement processes, and therefore, also back a smooth flow of supply chains.
19. Second Quarter in 2023: High Inflation Rate Rises to an Average 5.9% in July
General knowledge says that inflation is a rise in the general level of prices of goods and services that household purchase for the purpose of consumption in an economy over time. Thus, to specify its measure, it is conducted by a movement of the Consumer Price Index from a month or a certain period to the same month or certain period during the previous year. In simpler terms, it is an annual update expressed as percentage.
Measured by the Consumer Price Index, the annual inflation rate reported in the Organization for Economic Co-operation and Development or OECD slightly rose to 5.9% which was primarily driven by inflation in Turkey.
20. 7 Out of 10 Expect Inflation to Continue to Rise in 2023
In a recent survey by Ipsos and the World Economic Forum, 36 countries were surveyed and 69% or 7 out of 10 of sees that the global inflation rate will continue to rise even at the end of 2023. The top 3 countries to expect this are Singapore and South Africa with 81%, and Argentina with 80%.
To better expound this figure, people around the globe expect their standard of living to fall especially in European countries namely Hungary, Poland, Belgium, and Great Britain as an effect of the equally growing number of unemployment rate.
21. ISM Predicts Procurement Professionals to be Data Security Experts by 2030
Cyberattacks and data breaches will emerge in the next few years, targeting rising start-ups and other big companies for fraud and corruption. These breaches are caused by inadequate protection that allows third parties and suppliers access to the entire supply chain network.
Thus, along with the rise of the cybersecurity threats mentioned in this article, the Institute for Supply Management forecasts that procurement experts will need to be data security experts to counter the emerging threats by 2030.
22. North America Records as Having the Highest Fraudulent Transaction for Over 42% E-Commerce Fraud
Globally, as Juniper Research found, the total cost of the global e-commerce fraud will reach more than $48 billion by the end of 2023. 42% losses on e-commerce online payment fraud is recorded in North America today, followed by Europe 26%. Thus, it is predicted should this fraudulent activities increase in number, the cumulative losses to online payment fraud will exceed $343 billion by 2027.
These alarming figures shed light to the vulnerability of e-commerce that highlights the risk factor of data breaches around the world. Since the market is digitized and online, it is less secure and prone to cyberattacks. So, although the business industry keeps up with the world’s modernism, it also attracts a lot of cyber security threats and disruptions.
23. In 2023, Cost Savings Remain as the Top Priority for 46% CPOs Globally
One of the key factors for an efficient procurement process is ensuring cost-savings. By reducing expenses, procurement helps companies to maintain and manage profit, gain a competitive edge, and allocate funds in areas that need growth. However, when the COVID-19 pandemic hit, it triggered an unexpected surge in inflation rates which forced companies to cut and reduce costs.
So, in light of the unexpected huge supply chain disruptions, a research conducted by Ardent Partners found that CPOs have found the importance of saving costs to ensure business continuity. Thus, in 2023 and for the next years to come out of the 341 CPOs and other procurement professionals, 46% of them prioritizes saving costs.
24. Driving Operational Efficiency for Procurement Functions Highlighted the Importance of ESG Principles in 2023
As part of the sustainable movement of the world, many companies and organizations in the business industry have adopted sustainable practices. In addition, Sustainable Procurement emphasizes the incorporation of Environmental, Social, and Governance principles in procurement processes and regulations to make sure that companies adhere with corporate social responsibility (CSR) strategies.
With that, the Deloitte Global Chief Procurement Officer Survey 2023 found that out of 350 senior procurement leaders in more than 40 countries, 72% responded that they have enhanced their ESG efforts to maintain operational efficiency. That figure is a notable increase compared to 2022’s result of only 68% CPOs finding ESG strategies important.
What is Procurement Statistics?
Perhaps one of the reasons why procurement managers do not like talking about procurement statistics is because it’s a whole new world full of mysteries. And numbers. And the numbers game tends to be very boring, especially for procurement managers who are more familiar with the negotiations and sourcing part of procurement.
Simply put, procurement statistics, also known as procurement analytics, is the process of collecting and analyzing procurement data to form meaningful insights. It also helps in effective business decision-making.
Back in the day, it is very easy to talk about procurement statistics because everyone had to deal with it at some point. Back then, procurement managers need to learn how to read data and analytics about procurement and sourcing. Nowadays, it’s all changed though. Procurement teams can simply buy or invest in procurement programs that analyze all data in a matter of seconds. Suddenly, procurement data is transferred and analyzed in just a fraction of a second; try explaining or talking about that part of the process!
The Definitionof a Procurement System
One of the key factors to understanding procurement statistics is by studying the procurement system.
To put it in simple terms, a procurement system is a detailed and automated process of buying goods for the company. The procurement system is also responsible for maintaining the inventory system of the company. These days, it is a program designed and bought specifically to help the company in how it spends its budget for procurement as well as managing the supplies that were bought.
Some of the other processes that a procurement system takes care of automatically are as follows:
- Generating purchase orders
- Sending purchase requisitions
- Approving delivered services/goods
- Selecting/managing vendors
- Reviewing invoices
The E-Procurement SystemDebunked
The e-procurement system may look intimidating and too advanced to people who are not very good with computers and other technical stuff, but to be honest, it’s not. The e-procurement system is the same as most procurement systems; its main function is to assist the procurement manager in automating and making complex tasks that would normally take normal person days or even months to finish.
Most e-procurement systems have automated programming that allows them to do market research, sourcing tasks, and other data-relevant work that is important for the success of the procurement process. As such, it is now the job of the procurement manager or analyst to make sure that the company gets a good federal procurement data system that can really help with automating the procurement process while following important company standards.
There are many e-procurement systems available today. All you have to do is figure out which procurement system works for your procurement process!
What are procurement statistics?
Also known as procurement analytics, procurement statistics are data gathered for procurement usage.
What is procurement analytics?
Procurement analytics is the study and collection of data needed for a procurement process to work.