2023 is underway – and with it comes a doubling down on the climate of economic uncertainty forcing businesses to carefully evaluate their budgets and reduce spend wherever it makes sense. In fact, the results of our recent survey show that nearly half of businesses are looking to reduce operating expenses by more than 20% in the next year.
Our 2023 Trends in B2B Purchasing research – which analyzed responses from more than 1,000 finance and accounting professionals in the U.S. – indicates that broken purchasing processes are leading to a host of new challenges. Spend visibility was cited as a key issue across the board; nearly 9 in 10 respondents reported that less than 80% of their organization’s spend was under management or PO-backed. That’s an alarming statistic for companies trying to get a handle on spend.
As a result of these challenges, it’s not surprising to learn that respondents are overwhelmingly eager to improve efficiency in their B2B purchasing processes and unlock new levels of vendor visibility and cost control. Let’s dive into five of the key findings from the study:
Unlike other back-office processes – which have undergone significant digitization in recent years – the end-to-end B2B purchasing process has remained largely unchanged for nearly a decade. However, amid today’s challenging economic landscape, businesses are now highly motivated to improve their B2B purchasing functions. The top purchasing and procurement priority for finance and account professionals in 2023 is to increase efficiency and team productivity, as reported by 62.6% of respondents.
Additional priorities for the coming year include ensuring compliance with financial regulations (48.7%), ensuring compliance with security and privacy regulations (48.2%), and automating procurement and purchasing processes (35.6%).
With economic headwinds ahead for the foreseeable future, many businesses are keenly aware of the need to boost efficiency and cost savings this year. With aggressive cost savings measures in store for 2023, businesses will require deeper visibility and control over third-party vendor spend than ever before.
As finance and accounting professionals take steps to achieve these priorities, many are turning to software solutions and automation for help. The vast majority (86.9%) of respondents said it would be beneficial if their company could use an all-in-one solution to orchestrate the end-to-end B2B purchasing process. Additionally, 70.9% of finance and accounting professionals believe most of their processes for initiating purchase requests and approvals for B2B software and services should be automated.
Despite the strong desire for all-in-one software solutions and automation, many businesses still rely on legacy tools and communication methods – like phone calls, texts, spreadsheets and email – to manage purchase requests and approvals. With increasingly lean procurement teams, the use of outdated tools and processes for purchasing can easily result in a broken chain of communication and unclear processes across both employees and stakeholders.
A silver lining of the 2023 Trends in B2B Purchasing research findings: Finance and accounting professionals know that modernizing their purchasing processes will help them achieve their goals. In fact, respondents reported that purchasing process improvements would allow them to contribute to several of their businesses’ top-line objectives like increasing operational efficiency (42.7%) and improving employee productivity (38.7%).
As companies brace for whatever the market may bring in 2023, we look forward to partnering with procurement and purchasing teams to modernize their processes while bringing spend and risk under control.
To see the whole picture, download the full 2023 Trends in B2B Purchasing report.
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