The goal of automation in procurement should be to speed up processes and free employees from repetitive time consuming admin. This will enable staff to focus on higher value tasks.
In procurement a high percentage of jobs and processes are repetitive or similar which makes them ideal for automation.
So how can you automate procurement effectively? Here is our top 5 of things you need to focus on to get you started.
The first step in automating procurement in any organisation is understanding the requirements of the expert buyers. What are the problems and concerns your procurement experts face and how can they be fixed by automating the process? How would they like to be able to evaluate bids, enforce processes, analyse data and manage their suppliers? Where does the process work and where does it need to be made more efficient?
Get started by defining your procurement process. Flowchart software such as Gliffy can be used to map out the process from end to end and help you focus on 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 constistent and repeatable as possible. However, it is also important to identify areas where you need to retain flexibility.
Common problems in the procurement process that can be fixed by automation include:
- the approval process is manual and time consuming
- there are no standard or consistent processes
- contracts are not accessible or shared
- the sourcing process is too slow and difficult
- evaluating suppliers is a subjective process, relying on intuitions rather than data
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? The data you have enables you to measure where you are at now so that you can track any improvements that are acheived by the automation process. You might also need to gather data about the procurement process, even if it is a difficult manual process, to justify the need to implement automation.
Some of the common problems data collection might highlight include:
- inconsistent track records of suppliers
- inconsistent prices from the same suppliers
- a maverick buying problem
- failure to enforce compliance
- not able to recognise when volume discounts could be applicable
- identify areas where cost savings can be made
An efficient sourcing process can only be acheived if the suppliers are on board so make sure you get their input. Automation can be a benefit for you and your suppliers as it should ensure more effective real-time communication and reduced manual workload for both parties. If automation is done right 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 which can be used to evaluate your most effective suppliers.
Technology is the enabler that will allow you to automate your procurement. But making the right choice is key, making the wrong choice could result in your business being stuck with an inflexible process and limited buy in from staff. Choosing the best fit for your organisation is important. The right fit is the solution that will encourage a positive uptake from staff, improve process efficiencies and lead to cost savings which will demonstrate significant ROI.
Solutions designed to automate procurement vary from downloadable or cloud based software to fully integrated platforms which integrate with your existing systems and the capability of these solutions differ hugely.
Evaluating solutions can be tricky but any technology you consider should at least have the following features:
- User Friendly – look for solutions with an intuitive user friendly interfaces as this minimises the time needed for staff training and encourages staff buy-in.
- Cloud Based – a cloud based solution is important for any company with multiple offices and home based workers as it enables workers to have 247 accesss to realtime data from the system accessed via the internet from anywhere.
To find the best fit for you consider the size of your company, the type of spend you are targetting and your spend categories. Software designed for small companies wouldn’t be a good fit for a large company who would be better served by an enterprise level platform designed to integrate with the more complex needs of large organisations. Similarly solutions designed to tackle direct spend may well leave indirect spend not dealt with.
Once you have lined up a shortlist of potential technology providers then contact them all and request a one to one personalised demo to help you establish whether the solution is a good fit for your needs.
Automate procurement with Claritum
Claritum’s enterprise level cloud based spend management platform streamlines the buying and selling of complex products and services. Buyers, suppliers and experts collaborate in the cloud to improve spend visibility and control, achieve cost savings and efficiencies and to reduce risk and waste. For more information about Claritum contact us to book a demo to find out whether our platform if a good fit for your organisation.