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How to Introduce Automation Into Your Procurement Organization

How to Introduce Automation Into Your Procurement Organization

Written by – Jaclyn Enchin

The way procurement processes function now can leave room for a whole host of issues. Without online portals, rogue purchasing can occur because of lack of oversight. Information can get lost in filing cabinets, inboxes, drives and other devices and with a high number of bidders, communication can go awry quickly.

The good news is that there are technologies which are designed to enhance the procurement tools you already have and create new processes that can advance your company’s strategy and sustainability. However, a lot of organizations are either unaware or don’t have the facility to utilize these technologies. Some even say it could be laziness or acclimation to their current processes such as purchase order management, invoice processing or contract approval.

But without taking advantage of procurement technologies like cloud-based platforms, analytics, and AI processes, you are essentially missing out on a whole world of procurement advancement. The benefits of introducing automation into your procurement organization include time saved because of a decrease in cycle time, increased employee productivity, cost savings and more. However, before implementing technology into your procurement organization, it’s important to ask yourself some questions.

 

What do you look for in a procurement technological solution?

It’s 2019 and more and more procurement teams and organizations are turning to new procurement technologies and platforms. Some of these technologies are:

Cloud-Based Platforms – The basis of cloud-based technology is that it gives you the freedom to access data and programs via the internet at anytime without relying on a hard drive. In terms of procurement, these platforms provide a complete overview of all spending and services. It creates transparency between management and employees and can minimize transactions and streamline the procure-to-pay cycle. In addition to all of this, implementing these kinds of platforms will ultimately allow you to lower your costs, choose the top suppliers, enforce policy and appraise supplier risk.

Analytics – If you aren’t already on the analytics train, then your time is nye. Analytics are essential for all procurement organizations as they can expedite all aspects of procurement such as cost optimization, management reporting and process improvement. With analytics, it’s easier to make decisions, increase value and instill change within the organization.

Collaboration Software – An example of this kind of software is P2P Suites, which allows users to bridge the gap between the “administrative” and “transactional” side of procurement. Taking on a more collaborative approach to transactions will increase productivity, increase savings, make for stronger connections and will dramatically reduce risks.

Mobile Tech – With the influx of Millennial employees, corporations are steadily investing in mobile services. Mobile tech allows clients to engage with procurement functions anywhere at anytime. Having a procurement app with a highly functional user experience is vital to ensure you’re taking advantage of the mobile service space.

Automation – Automation is one of the most recent innovations in procurement platforms. These technologies automate all parts of procurement such as strategic sourcing, procure-to-pay, and vendor management. Implementing automation will free up employees from administrative duties and will let them focus on more value-driven tasks which will only add to your procurement organization.

 

How do you integrate technology into your procurement organization?

Hire the Right People – IBM’s Head of Digital Procurement, Hans Casteels says in an episode of the Spend Culture Podcast, “It’s not about technology, it’s not about process, it’s about listening and the ability to understand details.” To expand on Casteel’s point,  it’s important to remember that it isn’t the digital tools that create value, it is the people who can operate this technology, decipher the data and draw conclusions which in turn results in value. If you don’t have the right people on your procurement team, they won’t be able to perform the correct processes for the technology in place. And if you don’t have the right technology in place, you are setting up the people on your team for failure.

Choosing the right people for your procurement team is imperative. Those who understand details and who can make sense of data gathered from these technologies are some of the best candidates.

Communicate Clear Cut Policies – With the introduction of procurement platforms, communication is at an all time high, so your team should be well versed in communication with stakeholders, suppliers and other members of the team. These conversations that will ultimately draw up contracts are an integral part of the procurement process.

Providing Training Programs – Providing a training program for your employees is also important to ensure that both the user and the buyer are informed, allowing for seamless communication across both groups.  

 

What technology is right for my procurement organization?

Access your company’s needs – Although it can be tempting to implement as many programs and software as you can onto every aspect of your organization, it’s best to start with a few technologies to prevent everything being on automation which serves its own host of problems. Being moderate in how we introduce technology to our workspace will only ensure its lasting success. You need to consider your needs as an organization. If you are looking to improve data analysis within your team, then introducing an analytics software would be a good idea.  

Access costs – Remember that a lot of procurement software can not only be costly to purchase but also costly to install and set up. On top of that, regular maintenance needs to be performed on most procurement technologies, whether it’s an update or replacing certain programs, you will run into extra costs down the road with the implementation of any of these technologies. If after the consideration of the cost and training requirements and consideration for the need, you deem the technology viable for your business, then it is probably the right one for you.

 

Do I need to implement technology into my procurement organization?

Procurement is a type of space where it’s still possible to perform tasks the “old-school” way. The Business Development Bank of Canada says that traditionally, communication in procurement offices is done face-to-face or on the phone, and data can be stored on paper in filing cabinets. Procurement officers can have conversations with long time buyers who purchase at fixed prices. However, procurement technologies allow you to cut costs and save time by expediting communication.

For example, a regular approval process would usually take a week to complete. But with automation implemented, conversations are faster and the processes can be completed in a fraction of the time. Automation is quickly becoming commonplace not only amongst procurement teams but amongst buyers as well. Many procurement organizations see it less as a revolution and more as an evolution. In other words, it could very well be in your best interest of your business to take the plunge and invest in some of these innovative technologies.    

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