How Procurement Automation Increases Organizational Efficiency
Your procurement organization is an important contributor towards a healthy bottom line, but if your processes aren’t optimized, you may be leaving money on the table. Smooth, efficient procurement processes are absolutely essential to maximizing your organization’s competitiveness.
Manual workflows within your procurement function are not only tedious and unfulfilling for valuable employees to spend time on, but they also reduce efficiency. Even with the most skilled staff, small errors and delays can add up to opportunities missed and capital wasted.
Leveraging the advantages of technology to craft a digital procurement solution, where automated processes handle the most essential tasks saves you money and opens up your staff to work on more critical and fulfilling problems.
What Is Procurement Automation
Procurement automation focuses on making frequently repeated, labor-intensive steps more automated to increase efficiency and reduce error. While automation isn’t going to replace human oversight or insight, tedious tasks can be massively accelerated and performed much more reliably through automation.
Individual or multiple parts of your procurement processes can be automated to suit your needs. Even for automation that only saves staff a few steps, how many times will it make their work more efficient?
Small boosts to efficiency add up to a healthier bottom line in both your staffing and procurement costs, even if they’re only incremental. Most people will find, however, that procurement processes and the value your procurement team can bring to the organization are greatly enhanced through thoughtful automation.
Procurement Steps to Automate
While the entire source-to-pay process is usually ripe to increase efficiency through automation, there are specific parts of the process that many companies will prioritize automating to increase efficiency and improve workflows.
Managing procurement and vendor contracts certainly becomes routine in many procurement ecosystems, but that doesn’t mean it’s efficient. There are times when contracts have real issues that need the nuanced work of an expert worker, but much of the time spent on contract management and approval in procurement systems is tedious.
Back-and-forth approval processes for contracts can easily be verified and auto-filled by automation. Manual approval of procurement contracts often may feel like you’re being more cautious with the process, but humans make mistakes that automation doesn’t, especially in such tedious and repetitive tasks.
Having a smooth process for approving and managing invoices from suppliers is critical, but it can often eat into your procurement team’s time. During times when you have a high volume of incoming invoices, your accounting department could easily get bogged down with invoices when their time would be better utilized on other revenue-generating tasks.
Getting invoices approved promptly is key to maintaining good relationships and workflows with suppliers, and you need a consistent and reliable solution to ensure the overall health of your procurement system. This is why so many companies choose to employ invoice approval software or otherwise automate their invoice approval process.
Purchase Order Practices
Even tried and tested purchase order systems still have inefficiencies that can lead to costly issues. Automating your purchase order process with Robotic Process Automation (RPA) can allow you to automate your entire purchase order flow to improve your team’s efficiency and make sure every purchase order is accurately and quickly filed.
The Role of RPA Bots
All of the processes above play a crucial role in procurement automation as a whole, but they can often be achieved with the help of a standard Procure-to-Pay (P2P) system or Contract Lifecycle Management (CLM) software.
However, RPA bots do what these basic pieces of software can’t, ultimately automating the most time-consuming yet necessary tasks within procurement. What’s more, these RPA bots are becoming more and more adopted throughout procurement times, and now is the time to take advantage of the following benefits before it’s too late:
- Spend Analytics and Category Playbooks — RPA bots can automatically pull data and provide insights into spend that are necessary for improved category management. By automating spend analysis reports, RPA bots allow procurement teams to work smarter and create category playbooks to identify savings.
- eSourcing — RPA bots automate the supplier sourcing process to improve supplier relationship management. Within eSourcing, RPA bots can assist with supplier risk management, follow-up communication, strategic supplier sourcing, and much more.
- Automated Notifications — For procurement teams working with multiple pieces of software — i.e. info security, P2P, and CLM — you understand the need to streamline notifications and tasks. RPA bots integrate seamlessly with multiple tools to push notifications as certain steps are completed, ultimately speeding up the end-to-end process.
Procurement Automation and Improved Efficiency
Investing in procurement automation is the first step to improving organizational efficiency. While procurement automation can seem like a simple fix for a few tedious steps in a workday, it can have ripples throughout your entire organization.
Not only will automated processes ensure higher accuracy and efficiency, but they also give your team time back to work on more pressing and fulfilling issues in your organization. This creates a healthy workflow throughout your entire company.
Here are three overarching ways that procurement automation improves efficiency in your organization:
Reduce Manual Work
Your team is a collection of experts with varied personalities, strengths, and skills. Why should they be spending their time on data entry and repetitive processes and redundancies in your procurement system rather than applying their skills to innovating and improving the company?
If your team is wasting a significant part of their day on processes that a computer program could handle more efficiently, you’re neglecting the true value of one of your organizations’ most important resources.
Reduce Manual Error
Even your sharpest, most detail-oriented employees will still make a mistake from time to time on repetitive forms and processes. Automation doesn’t get distracted because the work isn’t engaging; it will accomplish tasks how it’s programmed to every time.
Rather than getting frustrated by employees making mistakes on a task that isn’t in line with their strengths, give your technology the tasks that it’s suited to so that your team can avoid the busy work that leads to demotivation, morale loss, and mistakes.
No matter how efficient your staff is, they simply can’t perform repetitive tasks as quickly as a computer. Your team’s talents are better spent on problems that computers lack the creativity to solve, while automation handles the tasks that it excels at.
Automating the procurement process cuts down on time spent waiting for forms to be submitted and approvals to go through so your team is never slowed down.
Utilize Technology for Healthier Procurement Processes
If increasing efficiency and reliability in the procurement process is important to you, automating all or parts of your procurement process is a practice that you can’t afford to overlook.
Not only does automation ensure that tedious but essential processes are quickly and accurately completed, but it frees your staff from work that isn’t engaging or suited to their talents and expertise.
Each organization is unique in how it needs its procurement process to run, but every organization is similar in that they need procurement to run smoothly. Here at Acquis Consulting, we believe customized procurement automation solutions are the best path to a more productive workforce and a more efficient business.
Embracing the role of technology in the modern workplace means letting that technology work for you. If you’re interested in how we can help you craft a strategy to improve your procurement efficiency and the workflow of your whole organization, contact us today for a consultation.