Picture two contrasting procurement departments: one still operating in the traditional way with email-based tenders, Excel spreadsheets, and paper contracts, while the other has embraced technology with AI-powered bid analysis, automated supplier performance tracking, and self-matching invoice systems. This stark contrast isn't a glimpse into the future – it's the reality of procurement in Hungary today.
Procurement is evolving dramatically across the globe, and our comprehensive research partnership with MLBKT reveals where Hungarian procurement fits into this transformation. Our findings highlight a mixed picture: notable advances in some areas, while substantial challenges remain in others.
The study draws insights from 77 procurement experts, primarily representing major corporations employing 500+ or 1,000+ people. What makes this sample particularly valuable is its diversity, though it's evident that manufacturing and energy sectors are leading the way in shaping industry trends.
Organizational Context and Digital Foundations
Most surveyed companies, which typically employ between 500 and 1,000 people, have taken their first steps toward digital transformation.
The survey reveals the following organizational patterns:
● 85% operate with some degree of procurement centralization
● Procurement teams typically consist of 5-15 professionals, with larger teams of up to 50 in sectors like energy, education, and construction
● 32% have fully implemented centralized procurement systems
● 43% continue to rely on hybrid approaches, combining procurement systems with Excel and email
● 6% remain committed to their current processes with no plans to adopt a procurement system
The Reality Gap in Daily Operations
The survey reveals some striking contrasts in how procurement teams actually work:
● Despite having procurement systems, 80% of teams still rely on email for managing tenders
● Phone calls remain the second most common method of communication
● A surprising 73% evaluate bids without any specialized software support
● Supplier evaluation shows room for improvement: 33% conduct no formal assessments, while only 23% utilize dedicated evaluation systems
Contract management practices reveal similar gaps: 53% lack any electronic contract management system, and among those who do have systems, merely 8% offer integrated e-signature functionality. There is a silver lining, though – 83% maintain a shared platform that allows contract visibility across departments.
When it comes to purchase order management, the picture is more encouraging:
● 81% have implemented electronic ordering systems
● Two-thirds employ in-system electronic approvals
● However, 42% of suppliers still handle order confirmations manually outside the system
● More than half operate without a procurement catalog
● Automated invoice processing remains rare, with only 11% having achieved this capability
AI and Automation: The Adoption Gap
Our findings reveal a considerable gap between Hungarian AI adoption and global standards. When compared to Deloitte's 2024 research on AI in procurement, which gathered insights from around 100 CPOs, the contrast is remarkable.
Deloitte's global research shows that 92% of procurement leaders worldwide are planning to adopt AI solutions in 2024. By contrast, Hungarian organizations trail significantly, both in their implementation plans and current adoption rates.
The global study reveals that among Chief Procurement Officers:
● 92% have generative AI implementation plans for 2024
● 38% currently leverage AI for cost and spend analysis
● 19% utilize AI in their request management processes (RFI/RFQ/RFP)
The current state of AI adoption in Hungary shows:
● A majority (56%) have not yet implemented any AI solutions
● 32% report occasional use of AI tools
● Only 10% are regular AI users
Where AI is being utilized, it's primarily for translation and communication purposes (25%), data analysis (11%), and content generation (7%).
Key Obstacles in Automation Adoption
Our research highlighted several critical areas requiring substantial development. The most pressing challenges include:
1. Insufficient workforce development, with 82% of professionals receiving no training in AI or automation
2. Poor strategic alignment, with 52% lacking defined digital transformation goals and metrics
3. Limited predictive capabilities, affecting 42% of organizations
4. Inadequate performance tracking, with 40% missing proper measurement systems
The international survey revealed additional critical challenges faced by Chief Procurement Officers:
● Internal capability gaps in IT and AI competencies, particularly in accessing and developing relevant expertise
● Poor data quality management – a challenge mirrored in Hungary, where only 42% of organizations conduct even occasional data cleansing
● Data security concerns, though these are diminishing as enterprise AI solutions mature and become more widespread
● A growing skills gap, with global competition for AI talent making it increasingly challenging to build and maintain expert teams
Moving Forward: Action Steps
Our research points to four critical areas requiring immediate attention:
1. Complete digital transformation basics: Many organizations still need to transition from manual and email-based processes to fully integrated systems.
2. Invest in workforce development: Building AI and automation capabilities through structured training programs is crucial for future success.
3. Prioritize data quality: Regular data maintenance and cleansing are fundamental prerequisites for any AI implementation - without clean data, AI solutions cannot deliver value.
4. Establish clear metrics: Organizations need robust performance measurement systems with defined KPIs for digital transformation at all levels of procurement.
Conclusion
While digital transformation is underway in Hungary's procurement sector, significant opportunities for advancement remain. There's cause for optimism, however, as the industry shows strong appetite for change, with 68% of professionals actively seeking process improvement opportunities.
It's crucial to recognize that this transformation represents both a technological and cultural shift. The data clearly shows that organizations whose procurement leaders actively engage with automation possibilities demonstrate significantly higher AI tool adoption rates.
Procurement's future extends far beyond endless email threads and spreadsheet management. Success will be built on intelligent automation, data-driven decision making, and strategic planning that prioritizes strong partner relationships.
The critical challenge ahead for Hungarian procurement organizations lies in finding the right balance between maintaining operational excellence and driving technological innovation. Success in this transformation will depend on three key factors: comprehensive training programs, robust technological infrastructure, and most crucially, unwavering leadership commitment to digital transformation.
