5 things you need to automate procurement
Procurement automation should speed up processes and free employees from repetitive time-consuming administration. Enabling staff to focus on higher-value tasks. In procurement, a high percentage of jobs and processes are repetitive which makes them ideal for automation.
So how can you automate procurement effectively? To get you started, here are our top 5 things to focus on.
The first step in automating procurement, in any organisation, is understanding the requirements of the people within your organisation who actually instigate the buying process – the users within departments throughout your organisation.
Get started by defining your procurement process. Focus on the areas which need to be accelerated or highlight where administrative tasks are the most cumbersome. In order to automate processes, it is important to make your processes as consistent and repeatable as possible. However, it is also important to identify areas where you need to retain flexibility.
One of the benefits of automating procurement is that if you do it right you should have access to better more reliable data. Such as order history, supplier profiles and contracts.
But the data you have available to you already should be your starting point. What story is your data telling you? Current data you have enables you to measure where you are so that you can track any improvements achieved by the automation process.
To justify the need to implement automation, even is this is difficult to obtain, you might also need to gather data from the current procurement processes.
An efficient sourcing process can only be achieved if the suppliers are on board. Make sure you get their input.
Automation can be a benefit for your suppliers, as it should ensure more effective real-time communication, prompt payments and reduced manual workload for both parties. If automation is effective, then suppliers should be able to respond to bids more quickly and have easy access to contracts and important order information. Buyers should be able to track orders more effectively and an automated system should also enable records of orders to be kept. These can be used to evaluate your most effective suppliers.
A poor choice could result in your business being stuck with an inflexible process and limited buy-in from system users.
Technology is the enabler that will allow you to automate your transactional activity. However, making the right choice is key.
A poor choice could result in your business being stuck with an inflexible process and limited buy in from system users.
The right choice is the solution that will encourage a positive uptake from staff, improve process efficiencies and lead to cost savings which will demonstrate significant ROI.
How to Use Automation to Optimize Procurement Processes
The goal of procurement automation should be to speed up processes in order to free employees from repetitive and time-consuming tasks, allowing them to focus on more business-critical operations. Let’s consider some key areas of focus.
Purchase Requests and Approvals
The first step will be to understand and document the current challenges that your procurement teams face, and how they can be addressed by automation. The objective will be to identify which areas need to be accelerated, and which administrative tasks are currently the most repetitive and cumbersome.
Sourcing and Evaluating Suppliers
The data that you already have should be your starting point, but know one of the greatest benefits of automating procurement is that you will begin amalgamating better and more reliable data as time goes by – data such as order history, supplier profiles, and contracts.
Invoices and Payments
Keeping good relationships with key suppliers is of course one of the most important responsibilities of any business. As such, having complex internal processes that slow down or delay payments isn’t the way to go if these good relationships are to be maintained.
Automating payments will ensure that all suppliers are paid the correct amount on time, every time, and that they remain happy and excited to continue doing work with you.
Choosing the Right Technology
Of course, technology remains the enabler that will allow you to automate your procurement. When considering your options, you need to make sure that the solution you choose is the best-fit for your business, that it will encourage a positive uptake from staff, as well, of course, that it is capable of engendering all the process efficiencies that will lead to more valuable purchases and long-term cost savings.
Beyond Robotic Process Automation (RPA)?
Source: CFB Bots
Behind this charming name, RPA is a type of software that imitates the activity of a human carrying out a task within a process. The term is derived from the idea of a “software robot,” an application that replicates the actions a user takes through the user interface of a computer system.
In other words, RPA records anything a user does through clicking on a screen or typing into a keyboard and then repeats those actions as directed. Software robots can complete tasks such as opening emails, completing forms, and recording.
What’s the difference with AI?
To put simply, an AI can learn from data and become better with time. RPA will remain the same. You will probably rely on some Machine learning models. It uses statistical analysis to “learn” from reams of data and teach a software application, using these lessons to make highly accurate predictions about specific types of data. Artificial intelligence allows software
to learn and interpret information, such as text through natural language processing, so that an application can communicate with and act in place of the user.