As CFOs continue to grapple with the challenges fintech and SaaS products have brought into their workflows, new research indicates finance teams not only have different challenges surrounding implementation, but also in purchasing the technology itself.
Findings from software developer ZIP’s Trends in B2B Purchasing report reveal that not only do more than three quarters (79%) of companies face challenges in the actual purchasing process of new B2B software and services, but nearly a third (32%) say the overall B2B purchasing process is broken.
ZIP surveyed 1,056 U.S.-based finance and accounting professionals to identify their top B2B purchasing challenges and how businesses can improve procurement and accounts payable.
When pursuing a purchase in some type of new tech for B2B transactions, many respondents reported using “legacy” forms of software to manage the initial purchase request process. Calls and texts were the most popular tool (60%) for managing communication processes for initial outreach for approvals.
By contrast, it was email (49%) that was the most popular form of communication when it came to the actual approval of the purchase itself.
“Over the last several years, the digitization of back-office processes has allowed businesses to achieve greater operational efficiency, better positioning them to weather current economic headwinds,” said Rujul Zaparde, co-founder and CEO of ZIP.
“However, the end-to-end procurement workflow is one process that remained stagnant for over a decade. It is becoming ever more critical given the renewed focus among finance leaders to reduce costs and mitigate business risk,” Zaparde said.
Most acknowledge there are challenges facing finance teams when it comes to purchasing new tech. The data shows that just over a third of respondents chose both the need for change in employee experience (36%) and their internal purchasing processes (34%), while over a quarter (29%) identified communication issues and friction between employees and purchasing teams as a challenge in their purchasing processes.
The end-to-end procurement workflow is one process that remained stagnant for over a decade. — Rujul Zaparde, CEO of ZIP
Just over a fifth (21%) of respondents told surveyors they were not looking to make any changes in the process and identified their work process as going “very well.”
The internal process must be clear and concise for those who evaluate, test, and ultimately decide whether or not certain technology is right for their organization. Despite nearly three-quarters (71%) of respondents telling ZIP they have a uniform process to make a purchase request or renewal, over a third (34%) of those respondents said their employees are largely unaware of that process.
“Finance and accounting professionals report that they are having a hard time keeping up with inbound procurement requests due to broken processes,” Zaparde said. “Purchase requests are stacking up and getting lost in long, convoluted approval workflows.”
Modernizing procurement processes can have a significant positive impact on the business — from improving operational efficiency and productivity to addressing the heightened concerns of controlling costs and mitigating risk. — Rujul Zaparde, CEO of ZIP
Level of transparency within these purchasing processes should be analyzed if leaders want to put their teams in the best positions for technology investment. The problem may lie in its layers, as 48% of respondents said their company requires six or more approvals in order to complete a new software or vendor purchase.
More than half (58%) of respondents said that at their company, more than 50 new purchase requests are made for B2B software or services at their company on a monthly basis, and almost three quarters (70%) believe the process for initiating purchase approvals and requests for B2B software and services should be automated.
“The research found that modernizing procurement processes can have a significant positive impact on the business — from improving operational efficiency and productivity to addressing the heightened concerns of controlling costs and mitigating risk,” said Zaparde.