One thing you never want in your procurement process is chaos. Procurement has many moving parts and often involves a large number of people so there’s plenty of opportunity for things to go wrong or get out of hand. And without clear workflows in place, that is often what happens.
Instead, what you should be looking for is a process that is both seamless and predictable. It results in faster procurement and saves you a lot of headaches. The best way to achieve that is by implementing an automated procurement process. A very large proportion of tasks in procurement are repetitive in nature, making them ideally suited to automation.
But there are many other benefits that automation can provide too so read on to find out the ways in which it can help transform your procurement system for the better.
Automation provides many benefits, some immediate and others that will occur over time as efficiencies are realised.
Some of the major benefits include:
Probably the most noticeable impact of automation is establishing a uniform and streamlined procurement process. Everything from allocating requests to filling out forms can be completely automated. This avoids the chaos caused by lost forms or forgotten requisitions and significantly reduces delays. It also frees up human resources away from dealing with paperwork so you can unlock the full value of your staff.
Automation improves compliance with industry regulations. Regulations are often moving goal posts. And different people involved in the procurement process can have differing levels of attention to detail. These factors can lead to regulatory breaches - even without being aware they’re occurring. One of the great features of automation is that it can produce detailed process performance reports that can act as an audit trail to demonstrate regulatory and legal compliance.
Simply by eliminating manual tasks and digitising paperwork, having an automated procurement management system reduces costs. But there are also secondary cost reductions over time that can be realised via efficiency improvements due to eliminating redundancies and maximising the potential of staff. Another benefit that isn’t immediately apparent is that by having automated processes, it provides a wealth of historical data on every supplier, which can allow for lower purchasing costs to be negotiated.
Automating any process lends itself to improved visibility and transparency. This is because it enables you to monitor and track multiple processes and identify problems or bottlenecks as they occur. Having an automated process opens up a whole world of analytics that can be applied either real-time or retrospectively to identify issues or areas where processes can be further optimised.
Before embarking on the automation transformation of your procurement process, take the time to think about what the major issues are and how they can be fixed via automation. What currently works well and what doesn’t? Talk to your procurement staff to identify which tasks are the most repetitive or cumbersome.
Some of the most common existing issues companies run into include:
How time consuming the approval process is
Lack of accessibility or the ability to share contracts and specifications
A lack of uniformity in the supplier evaluation process due to a lack of data
A slow or complex sourcing process
Once you know which tasks are causing the greatest problems, this will help you understand what needs to be improved and what automation software will be most effective. The right automation software will additionally allow a high level of control over who has access to sensitive data. Implementing conditional access ensures that team members only have access to the data they need.
Once you’ve implemented your chosen procurement software solution, you’ll discover that you will have freed up a large amount of time and resources. And optimising your procurement cycle times will free up your team to take on more responsibilities.
Today, an automated procurement process has become a necessity. It allows you to keep up with the competition, boost efficiency, and maximise the potential of your organisation. To find out more about how implementing procurement automation or other technology solutions can transform your business, talk to FinXL.