Procurement transformation 2025: Why invest in procuretech and how to make the case – Tipalti

In readiness for our Q1 2025 theme of Procurement Transformation, which will include how to even start your digital journey, how to make the case for it, how to shape your digital roadmap and how to survive it, we have received input from some solution providers on their own customers’ journeys.

Ruth Orenstein, Senior Director of Product Management at global finance automation specialist, Tipalti, shares what their customers are looking for from their digital procurement investment.

The ROI and efficiency metrics companies prioritize when investing in procuretech

Our customers focus on several critical ROI metrics and efficiency gains when evaluating procurement technology solutions. First, employee adoption rates are a top priority, especially in today’s hybrid work environment. With teams distributed across locations, having a solution that people actually use is crucial for maintaining proper review processes and avoiding last-minute rushed approvals that can lead to compliance issues. In addition, our customers track the percentage of purchase orders backed by approved spend. This metric has become increasingly important as organizations deal with complex subscription models and misaligned budgets and billing cycles. Strong budget controls help prevent overspending and ensure better financial governance.

Approval lead time is another important metric. In the hybrid work environment, companies strive to route approvals to the correct approvals quickly and answer questions promptly without sacrificing audit quality.

Lastly, customers measure annual dollar savings to demonstrate tangible financial returns. This aligns closely with the need for real-time visibility and analytics capabilities so that they can integrate procurement data with their other financial systems to enable data-driven decision making.

How customers justify procuretech investment to stakeholders

Our customers typically justify procurement technology investment through three areas that resonate with stakeholders. First, hard dollar savings that directly impact the P&L, such as negotiated supplier discounts and reduced maverick spend. Second, risk-reduction metrics, such as enhanced compliance tracking, audit trails and better budget control, are increasingly critical, especially for companies operating in global environments where each market has different requirements. Third, operational efficiency metrics like reduced PO processing costs and faster approval cycles.

The prioritization of these metrics often varies based on an organization’s procurement maturity. Companies currently relying on manual processes tend to place higher value on risk-reduction metrics, as they often deal with compliance gaps and control issues. In contrast, organizations looking to upgrade existing procurement technology typically emphasize hard dollar savings, focusing on demonstrating incremental value through improved employee adoption and stronger spend controls.

The biggest challenges customers face in transitioning to procuretech

The transition to procurement technology presents several significant challenges for organizations. A primary hurdle is employee resistance to new procurement systems and policies, often stemming from concerns about added complexity in the requisition process. This adoption challenge can be addressed by implementing employee-friendly solutions with intuitive intake tools and user interfaces that minimize training needs and integrate seamlessly with employees’ day-to-day communication tools.

Adding to this complexity is tool fragmentation, where organizations struggle with multiple systems for different spend management tasks. For instance, many companies use separate point systems to manage employee expenses and purchases, creating adoption friction and data fragmentation. With a single, unified tool, employees accustomed to using a tool for their expenses will find it easier to use the same tool for their purchases as well.

The challenge is further complicated by disjointed teams developing their procurement workflows, leading to inconsistent processes across the organization. This fragmentation makes it challenging to maintain standardized procedures and creates obstacles in spend visibility and control. Implementing procuretech needs to ensure a smooth transition from these disjointed processes. The solution needs to provide flexibility for each team to customize their own workflows, making their work easier and smoother rather than forcing them to compromise their needs, while enabling the overall organization to maintain a centralized process.

Industry trends and regulatory shifts driving urgency for procuretech investment

As the macroeconomic environment stabilizes and company spending increases, procurement teams face mounting pressure to make purchases strategically and cost-effectively. This requires greater visibility and control over spending patterns and advanced tools to evaluate vendors, negotiate terms and identify cost-saving opportunities across the organization. The growing competition between workplace tools and SasS solutions creates opportunities for the procurement team to leverage vendor competition, benchmark pricing and conduct cost-saving analyses to achieve cost savings through strategic vendor selection. Furthermore, the surge in usage of AI tools has intensified procurement complexity, as these solutions require extensive security, compliance and risk reviews. This heightened scrutiny demands more sophisticated procurement processes to manage vendor evaluations while maintaining proper due diligence efficiently.

Many thanks to Tipalti for sharing this insight with us.

Members can read our in-depth analysis of its solution here.

As always, reach out to discover how Spend Matters can help with your procuretech ambitions.

Consult TechMatch – our tech selection tool that helps procurement and finance technology buyers quickly explore the market and identify best-fit solutions.